Category: Education

Categories
Economics Education

[2279] Of PTPTN exacerbates its problem

Not all borrowers are the same. Some are goods borrowers who repay their loans mostly on time. Others do not.

Under typical market operations, the good borrowers get to pay lower rates as compared to the bad ones. This mitigate the risk of default and it discourages too many bad borrowers from borrowing. If everybody pays the same rate, then too many borrowers will likely default. That is happening to the National Higher Education Fund Corporation (PTPTN) in Malaysia, essentially.

PTPTN is having a serious loan recollection problem. As stated earlier, RM22 billion worth of loans have been lent out since 1997 but only 9% of its have been paid back.

Now, here comes something outrageous. PTPTN is waiving loans given to top performing students.[1] The intention is noble and it does provide students with an incentive to perform, provided that they know a waiver is possible.

Unfortunately for PTPTN, good students are likely to be the ones who are good at repaying their loans. I do not have the data to back this up but it is a reasonable assumption to make. Good students excel partly because they have good ethics. They are disciplined given all else the same. Paying back one’s loan is always good ethics. On time repayment requires discipline. Bad students have less discipline and maybe, less ethics as well.

At the same time, good results will likely allow good students to land some good jobs with good wages, which makes them all the more capable of paying back their loans. The same might not be true for the bad ones.

So, if the good students are left off the hook to leave PTPTN with bad borrowers only, then PTPTN will exacerbate its situation.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

[1] — TEMERLOH: The National Higher Education Fund Corporation (PTPTN) has written off RM59mil in loans to 2,162 students who obtained Class One Honours from January to July. [PTPTN writes off RM59m loans to top students. The Star. November 24 2010]

Categories
Economics Education

[2272] Of PTPTN’s gapping fiscal hole

The Malaysian government-setup National Higher Education Fund Corporation (PTPTN) is apparently in trouble. It finds itself in a big fiscal hole. With a mandate to provide Malaysian students at local tertiary institutions with cheap source of education financing, PTPTN lends at 1% to students but borrows at much higher rates from financial institutions, according to The Malaysian Insider.[1] If things keep going on its current path, something disastrous ought to happen.

Not only is the rate differential outrageous, borrowers are not paying back their loans. Talk about double whammy. The same report paints a scary picture: since 1997, RM22 billion worth of loans have been made but only 9% of it has been paid back.

PTPTN’s way of doing it is not working. The financial loss if left unmitigated will leave PTPTN unable to fulfill its role in the future. But it is unlikely that the government will let PTPTN fail. So, the whole setup is a recipe for a large bailout in the future.

Before it hits us all in form of yet another government bailout, a solution has to be found.

One solution to this ugly situation is for PTPTN to increase its lending rate above its borrowing rate. No brainer, right? This might create a problem though: if it charges a rate higher than market rates, what would its raison d’être be? Potential borrowers might be better off borrowing directly from the very institutions that PTPTN obtains its loans. But maybe, due to PTPTN’s size and the implicit guarantee it enjoys from the government, it can borrow at a lower cost from the market, as compared to what individual borrower can. That may make a hike not to necessarily remove PTPTN’s purpose.

Even if a hike is only logical, politically, it is very hard for PTPTN to raise its lending rate. The current government will receive a backlash from the hike, especially since the Prime Minister has given signals that the national election might be held soon. Nevertheless, the government has proven that it is willing to increase fuel price. If the government is willing to face voters’ wrath with respect to fuel price, how much larger wrath, with respect to PTPTN, can rate hike be?

Another potential solution is for PTPTN to borrow directly from the government if it has not done so, rather than borrowing directly from the market while relying on explicit or implicit guarantee from the government. The government can typically borrow at a much lower rate than anyone else can in the market. Once the government obtains the funds, the high lords in the Treasury can probably lend a soft loan to PTPTN at a very generous rate. This might lower down the repayment burden of PTPTN by lowering its borrowing cost. This of course works better if PTPTN raises its lending cost as well, assuming collection is not a problem. Having the government involved in this way is really no different from the way it is currently done. If PTPTN fails, the cost will likely be borne by the government anyway. As a result, the level of government intervention is unlikely to change.

The first two solutions have one problem unaddressed however and that is recollection. I do not know why it is a problem. The financial institutions obviously face the same problem but they do not suffer it nearly as badly as PTPTN. Something about government bodies, I guess.

Third possible solution is for the government to provide free tertiary education for those the deserve it. The government will borne all the cost. The repayment comes in the form of higher tax revenue that may come from increased economic activities due to higher average education level of the public in the future. At the moment, given PTPTN’s weak recollection mechanism, PTPTN is effectively giving these former students free money anyway.

The fourth is for the government to cut its potential loss and close down PTPTN. Let that market do it instead. This is my preferred solution, for the obvious reason. Declare PTPTN bankrupt and have the lenders take over PTPTN’s assets and liabilities. They will collect what PTPTN cannot.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

[1] — KUALA LUMPUR, Nov 12 — The National Higher Education Fund Corporation’s (PTPTN) practice of borrowing money from financial institutions at higher interest rates to lend to students at very low interest rates has led it to its current deficit crisis.

The Malaysian Insider understands that PTPTN admitted to taking out 10-year loans from financial institutions to bankroll students who then have up to 20 years to repay them when it briefed the Public Accounts Committee on Tuesday. [Interest rates mismatch ails federal students’ loan provider. Yow Hong Chieh. The Malaysian Insider. November 12 2010]

Categories
Education Liberty

[2112] Of a return to basics

One simply cannot overestimate the power of education in shaping a society. It has an awesome capability of influencing a person’s perspective towards the world by impressing certain mind frame, especially to young, whose mind is naively free of skepticism. A liberal society will require an education system that removes that naiveté and develops critically minded skeptical individuals. In an ideal world, that is the function of early formal education. Our world, and certainly our society, is less than ideal, where the agenda of individual empowerment gradually yields its space to other agenda that does not empower individuals but rather seeks to cow them into certain mold that erodes individuality.

By skepticism, it means not a society full of cynics, where each person somehow deep in his or her heart holds on to extremely pessimistic view of human nature and in doing so, distrusting the other person in all places at all times. By skepticism, it refers an independent mind that is capable of evaluating a proposition critically and not merely accepting it blindly. This is the truest and the greatest agenda of individual empowerment. Without this agenda, the path towards liberty is an overly arduous one.

It is for this reason that I prefer for primary and to some extent, secondary level of formal education, to focus primarily on aspects that encourage skepticism. These aspects hark back at the foundation of all knowledge: grammar, logic and rhetoric. It is a demand for a person to think for his or herself by demanding proofs for all propositions. It is a culture of questioning without fear of tradition and its biases. Only when the young truly grasp the basic tools of an independent mind will they then be free to explore areas that may interest them, and effectively at that.

Even if one speaks of holistic formal education that seeks to formalize everything to the point of suffocation to seemingly robs space for informal education, it is impossible to deny how a focus on grammar, logic and rhetoric is the base of any education worth of going through. Any person that is unable to write intelligibly, think critically and speak clearly up to some acceptable degree likely has failed in his or her education.

Admittedly, so basic a goal is hardly inspiring. Many are not impressed with such uninspiring goal. And so, they suggest for additional roles for schools and therefore, formal education to take up.

One that has been proposed from time to time is the inculcation of entrepreneurial spirit. For the religious, they want an education system with spiritual aspect tags included in multiple areas of education; probably, to have the fairy tale of creationism taught as part of science too. Another popular suggestion is a stress on unity. This is not merely weasel words; Deputy Minister in the Prime Minister’s Department, Murugiah Thopasamy has proposed for a course called 1Malaysia to replace moral studies, where the new course would apart from unity, encourages patriotism among Malaysians.

We live in a world of constraints and introduction of additional items to school syllabus will necessarily mean less time for foundation of knowledge found in vital courses such as language and mathematics. This concern of constraints is true at any level of education as well as within and without the realm of education.

One has to understand that formal education can only do so much. Entrepreneurial spirit, spiritualism and unity for instance cannot be taught through textbooks. Many of these additional goals necessarily belong to the realm of informal education. It is something acquired through interactions outside of schools and out of pure interest.

Granted, schools can play a huge role in prodding students toward whatever goals that one may desire, especially through after school activities. Any effort at that should not however turn the syllabus into a hodgepodge of additional goals that eventually dilutes the agenda of individual empowerment that seeks to set a strong foundation of knowledge.

Really, many of these additional goals are not educational of value, but more likely than not appear to impress on young students’ psyche to accept certain ideas. It is really propaganda. Such impression would likely be successful impact on young students who have yet to acquire the foundation. Unable to think for themselves and access any proposition effectively, young students may become sad victims of propaganda.

Advocates of holistic education especially miss and at worse ignore the importance of informal education. UMNO Youth for instance has proposed to lengthen school hours to enable implementation of holistic education. It is exactly this kind of so-called holistic education that considerably expands the possibility of role of formal education to include items of little if no educational value at all. The odds are that these items are only trying to influence students to accept certain things that might not survive inspection of a critical mind.

Even if the proposal of holistic education is purely innocent in its consequence and aimed at producing well-rounded individuals without having the potential of diluting the focus on foundational knowledge, it robs students of their time to explore not what the state what them to have interest in, but of their own interest. Such holistic education robs these students from the opportunity to undergo informal education. In fact, it robs them from living their life, to trap within school compound and oblivion that there is a whole wide world out there full of adventures that no formal education can provide. It robs them from a chance to practice their senses and deciding their own destiny.

The oft-repeated complaint that employers have against far too many fresh graduates is a lack of quality. I dare say the employability of these graduates is low because their foundation is not strong. Weak foundation affects how knowledge is received. When it is received uncritically, one will have trouble applying knowledge obtained through books and blackboard into practice.

One is tempted to solve the problem at tertiary level but it may be too late at that level. Tertiary level is the place where specialization is supposed to begin. While foundation may further be expanded and strengthened as liberal arts tries to do, this kind foundation itself will crumble without the foundation involving solid competency in grammar, logic and rhetoric that accommodate thinking process.

The problem of such employability can be solved by returning to basics and doing away all unnecessarily fluff. Focus on the grammar, logic and rhetoric as formal education and give the young the liberty to explore their life as part of their informal education.

Through this, not only we will have a competent individual, but also a free individual making up a free society.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

First published in The Malaysian Insider on November 17 2009.

Categories
Education

[2063] Of inflation breeds mediocrity; keep apex status to the best institutions

Notwithstanding the idea of publicly and privately funded higher education, I thought the idea of granting apex status to the best local university is good. That status works to focus resources into a particular university in order to drastically improve its quality. Improving quality obviously depends on how the money is spent as well as the culture of free inquiry which includes all kind of freedoms. But it is a start nonetheless.

That apex university is currently University Sains Malaysia.

Granted, it may create elitism but higher education should be about elitism.  The function of higher education is very different from primary or secondary education. Unlike in primary and secondary levels which function to educate the masses and practicing considerable dose of meritocracy while at it, higher learning institutions should be about intellectual elitism, especially so at upper levels of higher education, in whatever fields that may be. Only the best should be allowed to pass through the gates of ivory towers.

In that spirit, I was under the impression that apex status will only be granted to the best institutions in the country. Never mind the controversy of whether Universiti Sains Malaysia is better than Universiti Malaya but at least these two universities are well-regarded — along with other premiere local universities, namely, Universiti Kebangsaan Malaysia, Universiti Teknologi Malaysia and International Islamic University Malaysia in no particular order; maybe also Universiti Petronas, Universiti Tenaga Nasional and Multimedia University — within local context compared to the rest. The point is that it should only be granted to top tier local institutions.

Deputy Higher Education Minister Datuk Saifuddin Abdullah has a different idea however.

IPOH: At least three polytechnics will be accorded apex status to change the negative perception that such institutions of higher learning are second choice.

One of the polytechnics might even be alleviated to university status under the Tenth Malaysia Plan, said Deputy Higher Education Minister Datuk Saifuddin Abdullah.

”Generally, the people still feel that polytechnics are second choice; and polytechnic trainees are second-class students because they failed to enter other institutions of higher learning,” he said yesterday.

The truth was that polytechnic graduates were much sought after by companies, said Saifuddin. [Apex status for three polytechnics, says Saifuddin. The Star. August 18 2009]

From the news report, instead of basing criteria of granting the apex status on meritocracy, the government has plans to use the apex status to change people’s perception of an institution. This is not good.

Instead of becoming a tool of aiding the best rise above the noise and encourage others to up the ante to steal the honor from incumbent holder, it becomes a tool to shape perception. It is not good because it risks debasing the status’ reputation. It just kills the idea that apex status university or institution is the best institution in Malaysia.

This is not to say polytechnics are not automatically a second rated institutions. Malaysians, like what the Minister said, have bad impression of the word polytechnic, be it is applied to local or foreign institutions. Polytechnic can and indeed a great institution. After all, polytechnic is an institution that focuses on technology rather than sciences. In the United States for instance, polytechnics can in fact be universities and they do have magnificent reputation. Rensselaer Polytechnics Institute in New York is one of them. Moreover, many Malaysian forget that the highly-regarded Massachusetts Institute of Technology and California Institute of Technology are in fact polytechnics.

But, the problem is, are Malaysian polytechnics some great institutions deserving of apex status?

Let us do away with the term polytechnic and hypothetically grant all polytechnics the term universities. This is to do away the unfortunate ugly perception the polytechnics entail. Now, given current quality of these hypothetical universities, do they deserve the apex status?

The granting of apex status including, among others, grants for research. Do these hypothetical universities have the skills to do the research?

These hypothetical universities — polytechnics — are really second choice because of their quality, not the term they use.

It is because of their quality that Malaysians associate polytechnics with the idea of second choice, not the other way round. Using the apex status to change perception assumes that the reverse causal relation is true.

Granting apex status to these institutions may work for a while but if standard at these institutions do not improve after some time, Malaysians will realize that the status suffer from inflation and later, dismiss the apex status as a signal of quality altogether.

And when that happens, the whole system will suffer since the best is seen as only as good as, or rather as bad as, these polytechnics.

Any polytechnic, or any institution for that matter, should be granted apex status if and only if it has good quality. If they have the quality, so be it. If they do not, then do not grant them the status.

Categories
Education

[2027] Of PPSMI and teachers’ proficiency in English

And so, after six years of going through the teaching and learning of science and mathematics in English (in Malay, Pengajaran dan Pembelajaran Sains dan Matematik dalam bahasa Inggeris; PPSMI) in all primary and secondary public schools, it will come to an end in 2012.[1]

As I have expressed earlier, I am of two minds about the policy, with some bias towards English. But in order to continue the policy, it is important for the system to have teachers with proper English competency. Below is the first concrete data I have seen indicating that there are not enough teachers to support the policy.

Fair Use. Obtained from The Star.

I obtained the table from The Star. I reproduce the full document (actually, it is an appendix to probably another document which is not in my possession) here for your perusal.

The table indicates teachers’ proficiency in English in primary (red column) and secondary (blue column) schools. Assuming Aras 5 and 4 are classes which the teachers have respectable command of English as what I think the table is implying by separating Aras 5 and 4 from Aras 3, 2 and 1 with a thick line, it suggests that the policy of PPSMI needs to stop. It can only continue if the number of teachers with good command of English improves dramatically.

I once had to sit through a couple of classes led by an instructor who was incapably of conversing in English intelligibly while at Michigan. Having an instructor like that proved to be a painful experience for me. So, it certainly did not help me in acing the course. If I remember correctly, I stopped attending the instructor’s session to attend another session instructed by a native English speaker.

I could imagine that the same difficulty I faced could be repeated in Malaysian public schools with one crucial difference: the students cannot switch classes, unlike me. They do not have a choice, if the teachers suck.

And a whole lot of those teachers, as the table shows, suck.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

[1] — KUALA LUMPUR: The Cabinet has decided that the medium of instruction for Maths and Science will revert to Bahasa Malaysia in national schools and mother-tongue languages in national-type schools from 2012 onwards.

The reversal of the Teaching of Math and Science in English (PPSMI) policy will be done in stages, Deputy Prime Minister Tan Sri Muhyiddin Yassin said on Wednesday.

He however added that there will be greater emphasis on learning the English language.

English literature will be re-introduced, as will subjects on grammar and composition.

Beginning 2012, students in Year One and Year Four in primary schools, and Form One and Form Four in secondary schools, will learn Math and Science in Bahasa Malaysia.

The change will not affect those in Form Six and Matriculation.

The two subjects will be taught in two languages until 2014 for other students, he said.[Math and Science back to Bahasa, mother tongues. The Star. July 8 2009]