Implementation of Student Loan Asset-Backed Securitization...

IMPLEMENTATION OF STUDENT LOAN ASSET-BACKED SECURITIZATION IN MALAYSIAN HIGHER EDUCATION. (A STUDY CONDUCTED AT MALAYSIAN ECONOMY IN THE ASIA) Paper no.60 ABSTRACT The research is to investigate the alternative financing in Malaysian Higher Education by introducing student loan securities as a type of asset-backed securitization. It will analyse and consider possible effects in order to relieve the pressure currently imposed on the Government Budget. The aim of this research is to identify the outstanding systems financed by capital market and banking systems in the United States and Chile and suggest how a similar system can be adopted to improve the National Higher Education Fund Corporation (PTPTN) as main corporation†¦show more content†¦This research considers the role of government as a guarantor without burdening its financial capacity. However, the private capital markets and banking systems will become key players to provide financial resources to students. My study confirms the promising trend in Malaysia after the introduction other types of asset-backed securities such as lease, auto loans, credit cards receivables and commercial mortgages. This advanced financial techniques instruments had help to minimized the risk and reduce part of the social problem. Though only spanning over sixth years, the securitization process and its continuous innovation have contributed to resolving and risk managing problems in Malaysia. SCOPE AND LIMITATION OF THE STUDY The scope of this research particularly focuses on the student loans problem, which has not been involved yet in Malaysia. The work considers the characteristics of National Higher Education Fund Corporation (PTPTN), suggests a structure for student loans securitization, and study the potential of the asset-backed securitization process in resolving the student loan problem. A limitation for this research is that we will able to focus only on the United States and Chile student loans systems, as that process is not yet implemented very broadly worldwide. The United States has implemented the federal Family Education Loan Program (FFELP) to provide funds for students.