Budget 2026: PTPTN Loans For Poor Students To Be Converted Into Scholarships

Budget 2026

Samuel Chua

13th October 2025 - 2 min read

Students from poor and hardcore poor families, identified through the national e-Kasih database, will have their National Higher Education Fund Corporation (PTPTN) loans converted into scholarships starting next year. The initiative, announced under Budget 2026, applies to student pursuing studies at public higher education institutions (IPTAs).

Support For Students From Low-Income Families

PTPTN chairman Datuk Seri Norliza Rahim said the initiative reflects the government’s concern for the welfare of students from low-income families and its commitment to ensuring inclusive access to higher education.

“This measure is expected to ease the financial burden of students and allow them to fully focus on their studies,” she said in a statement on Sunday (12 October).

When tabling Budget 2026, Prime Minister Datuk Seri Anwar Ibrahim announced free education for 5,800 students from poor families enrolled at IPTAs. The government has allocated RM120 million annually to support this measure.

Exemption For First-Class Graduates

In addition to the scholarship conversion, the government will also exempt PTPTN loan repayments for students from low- and middle-income families who graduate with first-class honours degrees from public universities.

This initiative involves an allocation of RM90 million annually and is expected to benefit about 6,000 borrowers each year.

Norliza said the exemption serves as a form of appreciation for students who have achieved excellent academic results.

“The government continues to prioritise efforts to produce high-quality graduates in Malaysia. In this regard, students are encouraged to remain focused on their studies and strive for academic excellence,” she said.

Ensuring Sustainability Of PTPTN Funds

On the matter of overseas travel restrictions for loan defaulters, Norliza explained that the government places strong emphasis on maintaining the sustainability of PTPTN funds so that future generations can continue to access higher education financing.

“PTPTN is a loan facility that must be repaid to ensure the continuity of funds for new borrowers. Therefore, targeted overseas travel restrictions will be imposed on PTPTN borrowers with outstanding arrears,” she said.

Norliza added that more information on the implementation of the new measures under Budget 2026 will be announced by PTPTN in the near future.

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