Debt Ptptn

Topics: Debt, Loan, Credit Pages: 10 (2175 words) Published: December 3, 2014
Debt Composition of University
Graduates and Their Attitude towards
Education Loan
Nor Rashidah Zainal and Norlia Ismail
Faculty of Business Management,
Universiti Teknologi MARA, Shah Alam 40450, Malaysia
norrashidah@salam.uitm.edu.my

ABSTRACT
A worrying trend in the Malaysian higher education environment is that students graduating not only with diplomas or degrees of their disciplines but also with debts. Graduates with debts becomes a serious issue when OCP[ QH VJG ITCFWCVGU HCEGF FKHſEWNVKGU KP TGRC[KPI PQV QPN[ VJGKT GFWECVKQP loan but also other debts that they create since entering the job market. This paper examines the debt composition of 186 graduates and their attitudes towards education loans. The education debt-to-income ratio is found to be in the range of 1.8 percent to 12 percent; where a ratio beyond 8 percent is deemed unsafe.

© 2012 Published by Elsevier Ltd. Selection and peer-review under responsibility of Centre for Environment-Behaviour Studies (cE-Bs), Faculty of Architecture, Planning & Surveying, Universiti Teknologi MARA, Malaysia

Keywords: graduate debts; education loan; debt-to-income ratio; higher education; attitude to education debts.

INTRODUCTION
The Malaysian higher education sector has expanded rapidly during the past decade, with increasing number of students enrolling in both public and private universities and colleges. A driving force behind the expansion was believed to be the large provision of student loans. Study loans provided by

JOURNAL OF ASIAN BEHAVIOURAL STUDIES, VOLUME 2, NUMBER 6, JULY 2012

the the National Higher Education Fund Corporation (PTPTN) was the most FQOKPCPV UQWTEG QH ſPCPEKCN CKF HQT UVWFGPVU GURGEKCNN[ KP RTKXCVG JKIJGT education institutions (Nor Rashidah et al., 2009). Since its establishment in 1997, PTPTN had given out RM24 billion to around 1.3 million students in the country. However, up to last year, only RM2.3 billion was collected in loan repayment despite various reminders issued to the borrowers (Bernama, 3/2/2011).

6JKU UKVWCVKQP TGƀGEVU C YQTT[KPI VTGPF KP VJG JKIJGT GFWECVKQP environment where students graduating not only with diplomas or degrees of their disciplines but also with some levels of debts. Debts seem to be a norm; part and parcle of college experience. Graduates with debts become C OQTG UGTKQWU KUUWG YJGP OCP[ QH VJG [QWPI ITCFWCVGU HCEGF FKHſEWNVKGU KP repaying not only their education loan but also other debts that they create since entering the job market.

This paper intends to explore the question of whether the Malaysian ITCFWCVGUŏ GFWECVKQP FGDV NGXGNU CTG OCPCIGCDNG ſPCPEKCNN[ CPF GOQVKQPCNN[ by looking at their debt composition and their attitude towards payment of education loans.

RESEARCH DESIGN
Data and Sample
The data for this study was collected using a self-administered questionnaire survey. The survey population consisted of graduates who were Malaysians and holding diplomas or degrees from public and private higher education institution, either locally or abroad. The survey managed to get a sample of 186 respondents staying or working in Klang Valley. Instrument and Variables

26

The instrument used in this research was a questionnaire which consists of 4 sections; Section A was on the general particulars of respondents’ demographic characteristics, Section B was about their debt composition, Section C asked about their attitude towards education loan, and Section D was on respondents’ parents’ socio-economic status.

Zainal, N.R. Ismail, N.

DEBT COMPOSITION OF UNIVERSITY GRADUATES AND THEIR ATTITUDE TOWARDS EDUCATION LOAN

The questionnaire includes general questions regarding respondents’ EWTTGPV ſPCPEKCN RQUKVKQP CPF FGDVU EQORQUKVKQP CPF URGEKſE SWGUVKQPU QP their education loan debts such as the amount of loans received, the duration period, and the monthly instalments.

A set of “Attitude to education loan scale” were constructed to capture and measure how respondents...

References: Baum, S. and O’Malley, M. (2003) College on credit: How borrowers
perceive their education debt
Bertola, G. and Hochguertel, S. (2005) Household Debt and Credit.
Curtis, S. (2004) Fun at the debtors’ prison: Undergraduates’ university
experience
Curtis, S. and Klapper, R. (2005) Financial support systems: the student
experience in England and France
Elistina Abu Bakar, Jariah Masud and Zuroni Md Jusoh (2006) Knowledge,
Attitude and Perceptions of University Students towards Educational
Greiner, K. (1996) How much student loan debt is too much? Journal of
Student Financial Aid, 26 (1).
Nor Rashidah Zainal, Siti Badariah Saiful Nathan, Rohana Kamauddin,
Kamaruzzaman Jusoff (2009) Socio-economic status and parental
Norvilitus, J. M., Szablicki, P. B., & Wilson, S. D. (2003) Factors
KPƀWGPEKPI NGXGNU QH ETGFKV ECTF FGDV KP EQNNGIG UVWFGPVU
32
Price, D.V., (2004) Educational debt burden among student borrowers:
DEBT COMPOSITION OF UNIVERSITY GRADUATES AND THEIR ATTITUDE TOWARDS EDUCATION LOAN
Scherschel, P., (1998) Student indebtedness: Are borrowers pushing the
Woo, Jennie H. (2002) Factors Affecting the Probability of Default: Student
Loans in California
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Debt and Credit Card Debts Essay
  • Student Debt Essay
  • Student Debt Crisis Essay
  • Essay Student Loan Debt Relief
  • Essay about Student Loan Debt: Is it worth it?
  • Should Student Loan Debt Be Forgiven? Essay
  • Student debt Essay
  • Debt and Factoring Essay

Become a StudyMode Member

Sign Up - It's Free