chapter iv results and discussion 4.1. results and...
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CHAPTER IV
RESULTS AND DISCUSSION
4.1. Results and Discussion
This chapter will present the results of the design of the student loan
framework in Indonesia, which is focused on 3 parts, the objectives, student
loan scheme, and the repayment model of student loans. The results of this study
are based on the results of interviews conducted with 2 expert informants, Mr.
Angga E Hanafie who is given the initials AH as representatives of Mandiri
Bank and Mr. Dendi Permana who is given the initial DP as a representative of
CIMB Niaga Bank. This research is also supported by regulations issued by
Bank Indonesia and OJK, and scientific journals. So hopefully this research can
be resourceful and useful for further research.
The design of the results of this study refers to interview result and scientific
journals on student loans that have been implemented in other countries which
are focused on 5 Asian countries especially China, Hong Kong SAR, Republic
of Korea, The Philippines, and Thailand and in the process will be adjusted to
the situation in Indonesia so that the design can be feasible and applicable. The
schemes used by other countries become the main source of this research so that
the schemes are known the weakness and the strength.
This chapter will be discussed in 3 points, first, the purpose of student loans
which will discuss various program objectives and the application of objectives
in 5 Asian countries. Second, the student loan scheme will be discussed
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regarding the scheme that can be used in Indonesia by taking into account the
banks and the students perspective, therefore, the scheme could be implemented
in Indonesia. Third, repayment models which will discuss models that can be
used by the public without bearing the banking risk.
4.2.The Objective of Student Loan
The purpose to form a program, of course, there is the ultimate goal of the
program. This goal is fundamental because it influences the design and
operation of the study in this student loan scheme. Student loans which are
currently not yet implemented in Indonesia must have clear objectives so that
the program can be made effectively and efficiently. Based on the experience
of other countries that have implemented student loans, there can be identified
5 objectives of making student loans, that are budgetary objectives, facilitating
higher education expansion, social objectives, manpower needs, and easing
student's financial burdens.
1. Budgetary Objectives
Public universities throughout the world and especially in
developing countries are under-financed. A tight government budget can
lead to under-financed general public universities. Based on A. Ziderman
(2004) this can be caused by several reasons. First, additional government
funding for universities may not be available so that universities do not have
the ability to maintain the level of enrolment and quality in the face of rising
costs. Second, cuts from government spending specifically to tertiary
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education will put pressure on universities to seek alternative funding.
Third, many countries have adopted policies that support basic education
rather than tertiary education which leads to the reallocation of funding from
tertiary education to funds education which has a higher social rate of return.
Tightening the budget has caused public universities to shift to
greater cost recovery, in their efforts to utilize alternative funding sources.
This may require more realistic tuition fees for the services received.
Turning to the banking system in an effort to make routine loans so as to
ease the burden of payments may not be available because the banking
sector is very difficult to lend to education. In this case, the government can
encourage student loan programs through relief in terms of interest rates so
that these loans can be done by the public and can feel higher education.
2. Facilitating Higher Education Expansion
The government responds to increased social demand for higher
education through policies that lead to an increase in the number of students
participating in education; however, due to limited public budget, the
growth in the number of student participation cannot be followed by
proportionate additional government funding. Responding to increased
social demand for education expansion will require an increase in
expenditure on the public budget, especially in higher education which is
quite large.
The step that can be considered is to encourage the growth of private
higher education. Students pay full fees at private universities, by not putting
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a heavy burden on the public budget. However, the cost of education in
private universities tends to be large and beyond the reach of society,
especially the lower middle class. Student loans may be the answer in easing
the burden of tuition fees at private universities, especially if private
universities can be open to all society classes.
3. Social Objectives
In many countries, the low participation of young people whose low
economic background in education, which is not compulsory such as
college, is a social problem; improving access to universities for this group
has become a concern in determining policies in the education and social
areas. There is a consensus that clear financial incentives need to be offered,
not only to overcome the burden of making payments and living expenses
but also to balance the ability of parents to reduce the risk of family income
and the risk that the benefits of the educational process may not be large
enough.
The traditional, and most effective, method of increasing access to
education for the underprivileged is through the provision of grants or
scholarships to cover school fees and usually living costs as well. However,
massive grants schemes are likely to be very expensive; the use of loans
rather than grants offers a method that increases access for the wider
disadvantaged group and reduces or uses less public budget expenditure in
the long run, along with increased loan payments. To be effective in
increasing access to education for disadvantaged groups, loans must be
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made with attractive packaging. Therefore, justification is made for
subsidized loans, in the case of a grace period for payments, the interest
charged below the market interest rate, and payments will not be directly
related to inflation. Loan schemes intended to help disadvantaged groups
must be designed in such a way as to reach this group, otherwise, the main
purpose of the scheme will be lost.
4. Manpower Needs
Student loan schemes can be specifically aimed at providing support
for students who are willing to study in a department or special expertise
that is being prioritized by the state due to the need for expertise or work for
the benefit of the national or other social projects
5. Easing Students Financial Burdens
This goal is more directed towards developed countries. Although
the burden for tuition fees is minimal, it is not impossible that the student's
family faces another heavy financial burden. Such expenses may occur due
to potential income or even those that fixed income lost during the study
period, a large educational burden due to studying in locations far from
home both outside the region, islands, or abroad. Financial pressures, which
may have a negative effect on learning outcomes student, can be reduced by
the wide availability of student loans. Such a burden may be more on the
less capable group, but the point is that this loan can be available to all
students both for the able and disadvantaged groups. Even so, there needs
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to be an adjustment between the able and disadvantaged groups so that the
use of subsidies to ease the financial burden will not be wrongly targeted.
A clear division can be made by dividing goals number 1 and 2 as well as
goals from numbers 3-5. The goals of the first group, number 1 and 2, prioritize
university income due to tight funding from the government and in order to
increase social demand in higher education. Whereas in the second group's goal
number 3-5 it is not specifically concerned in university funding, but a broader
approach that is social perspective.
“Kalau ada metode jaminan yang tadi (tahan ijazah dan deposit) benefitnya
apa buat kampus? Ini lower admin fee dan fresh money dengan syarat ada
jaminan.” -DP.
With the existence of fresh money as a result of the implementation of
student loans, the campus can use these funds for development purposes or to
increase the ability of the university to social demand from the society. So that
the society's need for universities will be more fulfilled let alone supported by
funding that helps students access tertiary education.
Most of the student loan schemes use high amounts of subsidies, especially
in developing countries. However, the existence of these subsidies cannot be
sufficiently justified because the purpose of the loan is full loan recovery. Loan
schemes aimed at people who cannot afford to be made an exception as a way
to facilitate particular manpower shortages. It is noted that for purposes number
1 and 2 must be limited to students enrolling in public universities unless this
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loan is made specifically for private universities. However, to achieve goal
number 3-5, loans must be available to both public and private students in the
context of equality.
From the experience of Asian countries, the purpose of their student loans
varies depending on their needs for the program and the conditions of their
country. Based on the experience of 5 Asian countries that have implemented
student loans, the following are their main objectives and secondary objectives.
Table 4. 1. Major and Secondary Objectives of Student Loans in 5 Asian Countries
Case Studies Major Objective Secondary Objective
China (GSSLS –
subsidized scheme)
Social: Aimed at
students from poor
families
Budgetary: facilitated
introduction of tuition
fees; funding burden
shifted from the
government to the
banking system
China (GCLS –
Commercial Scheme)
Student Assistance:
Loans are not means-
tested
Budgetary:
Facilitated
introduction of tuition
fees; funding burden
shifted from the
government to the
banking system
Hong Kong (LSFS –
subsidized scheme)
Social: aimed at
students from poor
families
Hong Kong (NLS –
non-subsidized
scheme)
Student assistance:
loans are not means-
tested
Republic of Korea
(MOE)
Social: aimed at
students from poor
families
Budgetary: funding
burden shifted from
the government to the
banking system
Republic of Korea
(MOE – Engineering)
Manpower: Loans and
scholarships for the
engineering students
Student Assistance:
loans for engineering
majors
Republic of Korea
(GECP- Government
Employees’ scheme)
Student assistance:
loans for families of
government officials
Philippines (all
scheme)
Social: aimed at
students from poor
families
Manpower needs:
loans restricted to
students in “priority
courses”
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Thailand Social: aimed at
students from poor
families
University expansion:
subsidized students in
private institutions Source: A. Ziderman (2004)
Figure 4. 1. APK Based on Economy Household and Education Level
Source: BPS, 2017
“Program ini dapat meningkatkan angka pemenuhan pendidikan bagi para
generasi muda negara sekaligus menurunkan biaya anggaran yang awalnya
disalurkan melalui subsidi pendidikan. Program ini akan sangat membantu
memakmurkan negeri dari segi peningkatan kualitas sumber daya manusia
Indonesia.” -AH
Thus it can be concluded, that the objectives to be achieved are social
objectives. Taking into account that the level of participation for tertiary
education is still low, far below compulsory education in Indonesia, which in
its realization in 2017 according to BPS was only 25% while the gross
participation of high schools was around 82.84%. Economic factors that might
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be a barrier for prospective students are evidenced through low participation
from the lower middle class which is explained through figure 9 above.
Implementation of student loan may help to boost the participation rate for
tertiary education in particular for who are facing difficulities in economy.
4.3.Design of Student Loan Scheme
After the goal has been made, the next step is how the student loan system
is used. The system in question such as loan requirements and the amount or
scope to be used and questions that arise such as whether students pay the
burden of education while studying, whether private universities are allowed
into the scheme, whether financial assistance in reducing financial burdens for
university access is available both publicly and private sector, etc. This can be
answered if the design for student loans has been made. To make a good design,
of course, it must be adjusted to the conditions of Indonesia as well as taking
into account feasibility and applicable for Indonesia.
The combination of institutions to divide responsibility for different
administrative functions might leverage the outcome of the program.
University/colleges/other educational institutions may be given responsibility
for selection of borrowers and commercial banks may actually provide the
loans and collect repayments. The justification for those roles is that
commercial banks may have considered as institution who expertise in the
management of loan and collection of repayment, but little knowledge of
education system, while education institution may well have equipped to make
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academic judgments, but less experienced in judging financial need, and not at
all experienced in administering and controlling loans.
In discussing this design, it will be divided into several perspectives,
especially banking and students.
4.3.1. Student Loan Perspective for Banking
OJK and BI regulations as a guide of bank performance are binding
regulations on banks and must be obeyed. This regulation is important
because financial institutions are known as highly regulated institutions
because the risks faced can cause turbulence in one country to an economic
crisis. Therefore, clear rules regarding financial institutions are needed so
that preventive and coercive measures can be made if there are indicators
that have crossed the threshold.
In the student loan program, banks become important as one of the
institutions that can disburse funds for educational loan needs, although
not all countries use banks as a source of funds because there are countries
that use the government as a source of funds. Assuming the scheme to be
used will become a mass program, great funds are needed that can
guarantee the bank can provide money to borrow but has the ability to pay
its obligations (interest rates for savings and deposits).
The use of banks instead of autonomous bodies or government
institutions is because the banks are more efficient. According to Albrecht
(1993), there are 3 good reasons to rely on the private sector to run student
loan program:
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1. The government doesn’t have to make initial capital outlays
2. Private sector efficiencies may reduce the cost of loan program
3. The government doesn’t have to create a potentially costly
administrative apparatus to operate the program
The capital which is provided by banks is coming from private investors
rather than the government. With this current system, it will reduce the
financial burden on the public budget. The government doesn’t finance the
program directly, but they try to provide the cost of guaranteeing the loans
against the default and subsidizing the borrowers and lenders. In the USA
students borrowed over $9 billion in 1985-6, but the total cost to the
Federal Government was only one-third of this, at $3.2 billion
(Woodhall,1987).
Loans are also closely related to the risk. The risk faced by the bank
besides being unable to provide funds due to a lack of funding may be the
risk of default on the loan. These risks must be mitigated by banks in
collaboration with OJK as supervisors so that these risks do not affect the
bank. The following is a student loan financial scheme both in terms of
function and institution from 5 Asian Countries
Table 4. 2. Student Loan Financial Scheme from 5 Asian Countries
Case Study Capital
Provision
Loan Subsidies
(Interest rates,
etc.)
Risk-Bearing
China (GSSLS-
Subsidized
Scheme)
State-owned
Commercial
Banks
Government Banks
China (GCLS-
Commercial
Scheme)
Commercial
Banks
None Parental Asset
(Collateral)
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Hong Kong
(LSFS-
Subsidized
Scheme)
Government
Budget
Government Government,
Parents
Hong Kong
(NLS-Non-
Subsidized
Scheme)
Government
Budget
None None: Risk factor is
incorporated in the
interest rate
Republic of
Korea (MOE)
Commercial
Banks
Government Government,
Students/Parents
Republic of
Korea (GECP-
Government
Employees’
Scheme)
Government
(previously,
government
employees
pension scheme)
Government Government,
Parents
Philippines
(Study Now Pay
Later)
Government
budget
(previously,
government
financing
institution)
Government Government
Philippines
(Region 5)
Government
Budget
Government Government
Philippines
(Centres of
Excellences)
Government
Budget
Government Government, Co-
Signatory
Thailand Government
Budget
Government Government,
Parents Source: A. Ziderman (2004)
Thus in this point, there will be some discussion on the perspective of
student loans for banks including, the first, function of OJK supervision of
banks which will be discussed about OJK supervision and regulation of
banking activities, especially in the health level of bank and risk
management. Second, the banking cash flow scheme which will be
discussed regarding the system of cash inflow and outflow from a banking
perspective.
4.3.1.1. OJK Supervision Function on Banks
The Financial Services Authority (OJK) is an institution
that functions as a provider of an integrated regulation and
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supervision system for all activities in the financial services sector.
One of the financial services sectors that are regulated and
supervised by OJK is banking. This task was initially under the
authority of BI but after the issuance of Undang-Undang number
21 /2011 the authority was transferred to OJK while BI was more
focused on the monetary sector.
According to Kasmir (2014), as an institution that carries
out regulation and supervision in one of them, especially banking,
OJK has several authorities, especially
1. Regulations and supervision of bank institutions
which include
a. Permits for the establishment of banks, opening
bank offices, statute, work plans, ownership,
management, and human resources, mergers,
consolidations and acquisitions of banks, and
revocation of bank business licenses
b. Bank business activities, including sources of
funds, provision of funds, hybrid products, and
activities in the service sector
2. Regulations and supervision regarding bank health
including
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a. Liquidity, profitability, solvency, asset quality,
minimum capital adequacy ratio, maximum lending
limit, loan to deposit ratio, and bank reserves
b. Bank statements related to bank health and
performance
c. Debtor information system
d. Credit testing
e. Bank accounting standards
3. Regulations and supervision regarding bank
prudential aspects, including:
a. Risk management
b. Bank governance
c. “Know your customer” principle and anti-money
laundering
d. Prevention of financing terrorism and banking
crime
4. Bank inspection
In its authority, OJK issued several regulations concerning
bank health that must be followed by banks as stated in POJK No.4
/ POJK.03 / 2016 concerning the evaluation of the health of
commercial banks and described in more detail in OJK Circular
Letter Number 14 / SEOJK.03 / 2017 along with the attachments.
This regulation explains that banks and OJK are required to
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conduct bank health assessments both consolidated and
individually. The assessment of bank health uses a risk-based bank
rating approach with the following coverage:
1. Risk Profile
2. Good Corporate Governance
3. Earnings
4. Capital
If in the assessment conducted by the OJK, in this case,
the OJK assessment will be used if there is a difference with the
results of the health assessment by the bank, the bank is required to
submit an action plan in accordance with applicable regulations.
Banks that violate rules, there are already written regulation
regarding sanctions to be taken from written sanctions to the
suspension of certain business activities.
4.3.1.2.Banking Cash Flow Scheme
One of the country's economic movements is driven by credit
growth through banks. The growth of bank credit cannot be separated
from the contribution of the growth of third party funds as the main
source of bank funding. The importance of the presence of bank credit
in moving the national economy requires funds obtained through funds
from the public collected through demand deposits, savings, and
deposits. Banks as financial institutions that have operations in the sale
and purchase of money that has the meaning of buying, especially
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collecting funds and selling, providing loans, but before it is sold, of
course, what is needed is to buy money (raise funds) first. Sources of
bank income according to Dr. Kasmir (2014) includes
1. Funds sourced from the bank itself
The source of these funds from their own capital. The
definition of own capital is the capital of its shareholders. Broadly
speaking, it can be concluded that the fundraising itself consists of:
a. Capital contribution from shareholders
b. Bank reserves, which means the reserves of profit last year that
are not shared with shareholders. This reserve is intentionally
provided to anticipate future profit
c. Bank profit that has not been shared is the profit that has not been
distributed in the year concerned so that it can be used as capital
for a while
2. Funds coming from society
This source of funds is the most important source of funds
for bank operations and is a parameter of the success of the bank if
it is able to finance its operations through this source. This funding
source is the easiest to do and is the dominant source of funds with
the condition that interest and attractive facilities for the society.
Nevertheless, this funding source is a relatively expensive source
of funds compared to other funding sources. The source of funds is
coming from:
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a. Current account (demand deposits)
b. Savings (saving deposit)
c. Deposits (time deposits)
The division of types of deposits into several types is
designed so that the depositors have choices in accordance with
their respective goals. Types of deposits such as demand deposits
are designed to facilitate payment, especially consumers who are
business people even though the interest generated is not as large
as other deposits. Savings deposits and deposits can generate large
interest. Although deposits (time desposits) have some limitation
in withdrawing funds, it generates greater interest.
3. Funds sourced from other institutions
This third source of funding is additional if the bank faces
difficulties in finding the first and second sources of funds. Sources
of funds through fundraising other institutions are relatively more
expensive and are only temporary. The funds provided are also
only used to finance or pay certain transactions. Obtaining funds
from this source can be obtained from:
a. Liquidity credit from Bank Indonesia is credit given by Bank
Indonesia to banks who are experiencing liquidity problems. This
liquidity credit is also given to financing certain sectors
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b. Interbank loans are usually given to banks that have lost clearing
within the clearinghouse. This loan is short term and relatively
expensive
c. Loans from foreign banks are loans obtained by banks from
foreign parties
d. Money Market Securities (SBPU) in this case the banks' issue
SBPU and then traded to interested parties, both financial and non-
financial companies.
After the process of collecting funds has been completed, the next
step is to distribute the funds back to the people who need them. This
activity is known as fund allocation. Allocating funds other than in the
form of loans can also be in the purchase of assets that are considered
beneficial to the bank.
Bank profits come from the difference, the difference between the
interest given from the funds received and the interest received from the
allocation of funds. So that the determination of the source of funds is
a very influential interest in the allocation of funds to be charged.
Based on the explanation above with interview results, it can be
concluded that the banking cash flow model can be drawn in figure 10
Sources of funds (funding) from the public consisting of current
accounts, savings, and deposits into the bank, then the funds will be
allocated to the form of credit or asset purchases. In the form of credit
(lending) will take the form of loans to commercial and consumer
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depending on the intended use. If it is used as business capital in CIMB
Niaga Bank, according to the DP, it can be divided again if it is aimed
at a corporation or small-medium enterprise or SME.
BANK
FUNDING LENDING
TREASURY
Current AccountSaving
Deposit
CommercialConsumer
Figure 4. 2. Banking Cash Flow Model
Source: Interview Results, Bank CIMB Niaga
If it functions as personal use, it can be divided into several products
such as mortgages, KPM (car ownership credit), credit cards, and
personal loans. The representative of Mandiri according to AH, the
division starts whether it functions as productive or consumptive. In
productive credit there are products called SME (Small Medium
Enterprise) credit, commercial credit, and corporate credit. Whereas for
consumptive products, there are KSM (Micro Multipurpose Loans),
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KPR (Mortgages), Multipurpose Mortgages, and KKB (Motorized
Vehicle Loans). According to the DP, inflows and outflows of funds are
regulated by treasury whereby if the funds collected and allocated have
reached the LFR (Loan to Funding Ratio) then if there is a request for
allocation of large funds that come in, a request to the Funding division
is needed to find ways to increase the pool of funds from the public.
Based on Bank Indonesia regulation PBI number 19/06 / PBI / 2017
regarding Fifth Amendment to “Bank Indonesia Regulation number
15/15 / PBI / 2013 regarding Statutory Reserves for Commercial Banks
in Rupiahs and Foreign Currencies for Conventional Commercial
Banks” that LFR (Loan to Funding Ratio) designate that the amount in
the LFR statutory reserve calculation is with the lower limit of the target
LFR of 78% and the upper limit of the target LFR of 92% and the upper
limit of the Target LFR of 94% with conditions set by BI so that the
treasury of each bank must ensure that the LFR is still within safe
threshold.
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Figure 4. 3. Credit Types in CIMB Niaga Bank
Source: Interview Results, CIMB Niaga Bank
Figure 4. 4. Credit Types in Mandiri Bank
Source: Interview Results, Mandiri Bank
Credit
CorporateMedium Small
EnterpriseConsumer
KPR
KPM
Credit Card
Personal Loan
Credit
Productive
SME
Corporate
Commercial
Consumptive
KSM
KPR
Multifunction KPR
KKB
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Thus it can be concluded that if the student loan program will be
implemented in Indonesia with the bank as a source of funding, the bank
needs to assess the ability to raise funds before giving loans to large
amounts of students. Banks need to pay attention to the provisions
written in OJK and BI regulations as standard regulations that
absolutely must be followed. Banks must be prepared in addition to
preparing funds, must also be ready in terms of scoring and payment
mechanisms that will be discussed later. BUMN banks as agents of
changes are demanded to support government programs but do not
forget that bank stability must be prioritized so that economic activity
runs well. Although according to AH and DP, both are agreed that
student loan only requires a fragment of credit, significant number of
default rate could lead to a failure program or put heavy burden on
banks.
4.3.2. Student Loan Perspectives for Students
Credit is a facility needed by the society where the society can apply
for credit because it requires additional funds for their needs. In the
previous discussion, it was explained that banks have several credit
services that can be used by the public for various purposes. But what
about students who still don't have jobs who want to apply for credit for
education? At this point, several things will be discussed, first the
provision of credit where credit applications have several conditions that
must be met. Second, loan guarantees which will be discussed regarding
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loan guarantees so that students can apply for credit without providing a
great risk to the bank. Third, the loan amount will be discussed how much
the loan can be given to student loan applicants.
4.3.2.1. Terms of Credit Provision
Before giving credit to society, there are conditions that must
be met by society. These requirements are required by the bank so
that the bank can find out whether the applicant is eligible to be
given credit or not. Requests for student loans will be different
compare other countries, especially in developing countries wherein
for example Indonesia, there is uncertainty that university graduates
can immediately hired so there need to be adjustments that can be
met by the public and the risk borne by banks is not large. Following
are the experiences of 5 Asian countries regarding student loan
arrangements in the income ceiling for eligibility in loans which is
described in figure 13.
According to the DP, the requirements that must be met in a
personal loan which is almost the same as a student loan are, the first
they should be Indonesian citizens, then aged 21 - 55 years when the
applicant registering is the student's parent or the party responsible
for the student, then the student's parents or guardians are working
or self-employed, after that the requirement is either, a CIMB Niaga
customer or non CIMB Niaga customer. For CIMB Niaga
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customers, they must have a payroll which means the transferred
income must be to a CIMB Niaga account
Table 4. 3. Student Loan Arrangements in The Income Ceiling for Eligibility in Loans for 5 Asian Countries
Case Study (Loans
Scheme)
Eligibility How is the eligibility
income ceiling fixed
Who provides
certification of
declared family
income
China (GSSLS-
Subsidized Scheme)
Poor Students Local Government
Poverty Line
Local Authority
Hong Kong (LSFS-
Subsidized Scheme)
Poor Students Amount of loan
offered is in inverse
proportion to family
income and assets
The applicant provides
documentation such as
salary statement,
profit-and-loss
account, etc
Hong Kong (NLS-
Non-Subsidized
Scheme)
All Students n.a n.a
Republic of Korea
(MOE)
Poor Students Ministry of Education
(Eligibility ceiling is
above the poverty
line)
Educational
Institutions; Banks
Republic of Korea
(GECP-Government
Employees’ Scheme)
Government
employees and their
children
n.a n.a
Philippines (All
Schemes)
Poor Students Official Poverty Line Parents’ employer
Thailand Poor Students Loans Scheme Office
(Eligibility ceiling is
above the poverty
line)
Government official
(Level 4 and above);
village head
Source: A. Ziderman, (2004)
“Punya payroll, payroll itu adalah misalkan kalau kamu sudah kerja
rekening gajian kamu itu ditransfer sama perusahaan ke rekening
CIMB Niaga itu namanya pakai payroll.”-DP
Then the average daily balance savings of at least 10 million
rupiah means that even though they already have a CIMB Niaga
account, customers must also have an average of at least 10 million.
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“tabungan ini harus saldo rata-rata harian minimum 10 juta jadi
meskipun sudah punya rekening CIMB Niaga tapi tiap bulannya
hanya satu juta tetap saja tidak bisa”-DP
Then there is a credit card. If it comes from another bank
customer, then the requirement is to have a bank credit card. If
applicant only have a payslip, then the application cannot be
processed because it is prone to fraud. After going through these
requirements, the application will be checked from internal checking
whether there has ever been a history of fraud and money laundering
through AML. Second, conduct an external checking which will
check financial transactions through the SLIK (Financial
Information Service System) owned by the OJK and verify the status
of the house and employment status. Third, do a loan assignment
where CIMB Niaga regulations apply a DBR of 65%, which means
that the total income per month is only allowed a maximum loan
installment of 65% of income. These criteria are described in figure
14.
“Hal ini memang menjadi tantangan terbesar untuk Bank. Namun
dapat disiasati dengan manajemen risiko dengan baik yaitu:
memberikan persyaratan tertentu kepada mahasiswa: misalnya
mensyaratkan minimum nilai dan IPK.
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Indonesia Citizen
21 – 55 years old
Employee /
Entrepreneur
CIMB Niaga
Customer
Non-CIMB Niaga
Customer
- Payroll
- Minimum Average
Daily Balance
Savings at least 10
million
- CIMB Niaga Credit
Card
- Other Banks Credit
Card
Figure 4. 5. Requirements To Apply For Credit .
Source: Interview Results, CIMB Niaga Bank
Karena dapat menjadi salah satu parameter keseriusan mahasiswa
untuk belajar dan dapat berpengaruh dalam seberapa kompetitifnya
dia untuk mencari pekerjaan nantinya. Hal ini juga dapat menekan
angka peminjam yang terlalu besar dan sulit untuk dihandle. Selain
itu, mahasiswa harus berkomitmen untuk menyelesaikan studinya
maksimum selama 4 tahun, sehingga tidak memperpanjang tenor
kredit. Ini merupakan pendapat dari kita jika produk student loan
akan dijalankan, salah satu untuk do diligence adalah ada base figure
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nya. Sehingga melalui IPK bisa dijadikan parameter untuk penilaian
pembiayaan. Salah satu do diligence adalah membiayai orang yang
memiliki prospektif baik salah satunya IPK, sama halnya dalam
perusahaan yang harus berdiri minimal 2 tahun, punya neraca dan
punya kinerja 2 tahun karena kalau belum 2 tahun, belum terlihat
apakah perusahaan tersebut bisa menghasilkan profit atau hanya
perusahaan yang mencoba-coba. “-AH
According to AH, to be able to apply student loans, it needs
good credit management and might be tricked with their academics
in terms of GPA and enrollment period, and their commitment on
the loan. These may help in making parameter for the financing
assessment.
4.3.2.2. Loan Collateral
Credit before being given to the applicant, the bank must be
confident that the credit given will really be returned. This belief can
be obtained through a credit rating before the credit is given. One of
the criteria in a credit rating is collateral.
Credit according to Dr. Cashmere (2014) can be provided
with or without collateral. Unsecured loans are relatively very
dangerous to the bank's position, considering that if the customer
experiences a traffic jam, it will be difficult to cover losses on the
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credit extended. In contrast, a credit guarantee is relatively more
secure, given that any bad credit will be covered by the guarantee.
The emergence of collateral in loans such as student loans
will certainly be burdensome for students where the target of student
loans is to help students to be able to continue to tertiary educational
background. Families whose backgrounds are not able will certainly
find it difficult to provide collateral to banks because with large
amounts of loans there is no collateral owned to have a value that
can be used as collateral by the bank even if there will make the
family's position more difficult.
According to DP, the student loan program can run with
guarantees that must be met by the government, related universities,
and students.
“Ada dua misalnya pemerintah mengeluarkan deposit untuk
perguruan tinggi bisa menaruh deposito juga beserta dengan ijazah
SMA dan ijazah perguruan tinggi jika sudah lulus.”-DP
According to the DP, because guarantees cannot be
requested to families who are less able or there are no guarantees
whose value is the same as the amount of credit requested, students,
must submit their high school diploma to the university as a
guarantee that the student will attend the lecture process from start
to finish and reduce the risk of switching universities. While their
university diploma will be held until the obligation to repay credit
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has been made all. The government and universities need to send
deposits to banks as collateral so that if there are students who do
not pay, the bank has the authority to take deposits deposited to the
bank.
“Jaminan yang rasional menurut saya adalah adanya reference
minimal tiga orang dari orang tua, guru, keluarga atau kerabat dari
yang bersangkutan untuk menjamin karakter dan komitmen
mahasiswa tersebut. Sehingga dapat menambah keyakinan Bank
untuk memberikan student loan.”-AH
According to AH, a guarantee which according to him is
rational is the recommendation from the closest person to guarantee
that the student will pay. It could add confidence for the banks to
provide the loans.
4.3.2.3. Loan Amount
The number of loans for credit varies depending on the
intended use. According to the DP, the number of loans used for
corporations will vary.
“Biasanya TBK (perusahaan terbuka) pinjamnya ratusan miliar
kalau perusahaan biasa biasanya lebih dari 1 miliar tergantung size
nya saja.”-DP
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If it intends for consumers, it depends on their needs such as
buying a house, car, education, health, and others. Similar to student
loans, the number of loans will depend on their educational needs.
According to AH, the amount of student loan should be
limited according to tuition and books.
“Plafon kredit diberikan maksimum hanya berupa tuition fee dan
biaya buku saja. Melihat biaya SPP di beberapa universitas negeri di
Indonesia yang relative rendah, maka limitnya harus diberikan batas
maksimum untuk mengurangi risiko.”-AH
The amount of the loan will depend on the applicant's credit
background that applies to personal loans. With the calculation of
DBR (Debt Burden Ratio) tracing up to other banks, banks can find
out the burden of credit installments borne by that person. According
to DP, the number of loans can be from 5 million to 300 million, but
the DBR must be considered. DP divides the DBR according to
credit risk from credit scoring ranging from 65% low risk to 45%
high risk. Apart from the calculation of DBR, there are also other
factors such as SLIK (Financial Information Services System), and
others (the type of work, area (place of residence), workplace).
Limitation of the amount of the loan based on the bank's assessment
certainly cannot be a barrier in the student loan scheme so that the
use of the loan can be used to pay full tuition fees.
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Thus it can be concluded that to withdraw loans from banks, in general,
must go through a fairly rigorous process because there are risks faced by banks
let alone large amounts of loans. But this is where the role of the government
is to be able to collaborate between the government, universities, banking, and
students. The collaboration is needed, in particular for state-owned banks must
be ready to support this student loan program after raising funds from the
society, students need to guarantee their diplomas to the relevant university
until graduation and their college diplomas will be held until paid in full, then
the government can deposit a number of deposits to the bank as collateral if
there is indicating in default or facing repayment difficulities from the customer
so the risk of the bank will be kept to a minimum. Using IDX checking as a
tracing tool is also needed so that it can be known who is borrowing student
loans and can be a preventive measure for applying for new loans.
4.4.Repayment Scheme on Student Loan
Loans that have been agreed by both parties mean that the borrower has
accepted that there are obligations that must be fulfilled. The obligation is to
repay the loan with an agreed nominal until a predetermined period. Payment
of credit loans generally pays the principal debt that has been added to the
interest. Similar to a student loan, the applicant must pay a sum of money to
cover the principal debt along with the interest. At this point two things will be
discussed, especially, the first is about the student loan payment scheme for
Indonesia. And secondly, how to minimize defaults.
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4.4.1. Student Loan Payment Scheme Model
In student loans, the position is the same as personal credit, in which
the credit pyramid according to the DP occupies the top position, which
means it is in the lowest priority so that it has a large risk. Other loans have
collateral that makes the debtor has more obligations such as home loans
and car collateral, home certificates and BPKB. Then, credit card, if not
paid, can make debtors unable to withdraw new loans with their cards.
While on personal loan, there is no collateral to be held by banks.
Figure 4. 6. Credit Triangle Based on The Risk
Source: Interview Results, CIMB Niaga Bank
Payment of student loans must be calculated carefully because the
target of student loans is from a family background who can not afford. Thus
a payment scheme is needed that does not burden the family but at the same
time does not provide a great risk to the banking sector as a source of funds.
According to AH, student loans like abroad have never existed in Indonesia,
similar loans exist but payments are made by balloon payment where
Personal Loan
Credit Card
KPM
KPR
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payments will begin when taking studies but the nominal is small, then after
graduation will enlarge proportionally until the loan is repaid. This balloon
payment has been carried out by Mandiri Bank as a financial institution in
collaboration with the Garuda Indonesia pilot academy where pilots who
take their studies at the academy will be given loans due to expensive study
fees, even though the prospective pilot has been given an income which
have not been high but can already make a minimum installment payment.
After becoming a pilot and having a flight time, the nominal payment will
increase proportionally until the loan is repaid. But AH gave an opinion if
this method is feasible because there is already a guarantee that all Garuda
Indonesia pilots would definitely work for the airline. This certainty is what
makes Mandiri Bank sure to fund pilot studies.
According to DP, the payment will be the same as AH already said. DP
believes that the payment when studying allows students to pay installments
to cover the interest first and will continue with principal debt after
graduated. Government intervention can be through interest subsidies and
deposits that initially should be 30% interest for personal loans (likened to
the category of student loans) can be reduced to around 13% because there
is certainty of government guarantees through deposits, not including the
reduction back through the interest subsidy program, the actual payments
tuition can ease the burden compared to the expected cost. According to the
DP, it is very important for payments to be made during enrollment as well
as to shorten the loan tenor so that the upcoming risk will also decrease.
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Months 1st
First Issuance + Repayment
Months 48th
Last Repayment
Same Payment During Enrollment
Figure 4. 7. Traditional repayment of the loan
Source: Interview Results, CIMB Niaga Bank
Months 1st
First Issuance + Repayment
Months 48th
Last Interest Repayment
Interest Payment During Enrollment
Months 49th
First Principal Repayment
Months 72nd
Last Principal Repayment
Principal Payment After Graduated
Figure 4. 8. Repayment Model for Student Loan (Balloon Payment)
Source: Mix Interview Result, Mandiri Bank and CIMB Niaga Bank
4.4.2. Minimize Default
Success for credit repayment depends not only on the performance
of the institutions that work efficiently, but there are factors in the nature
and behavior of borrowers. Failure to repay a loan can be caused by 2 things,
the first is that the borrower is unable to pay its obligations due to being in
a bad situation and the second is the borrower wants to avoid his obligations
and run away from these obligations. Following are experiences from 5
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Asian Countries related to the sanctions of the unpaid loan with the
comments from the origin researcher.
Table 4. 4. Sanctions against repayment default
Case Study (Loan Scheme) Sanction Comments
China (GSSLS-Subsidized
Scheme)
- Students’ individual credit
- Moral Pressure:
publication of defaulter
list of students and
institutions
- Denial of loans to new
students enrolled at
universities with high
default rates
- It is unfair to
penalize new
students because
previous loan
recipients have
defaulted
China (GCLS-Commercial
Scheme)
- Family Co-Signatures and
pledged assets as
collateral
- Effective, but
restricts loans to
better-off students
Hong Kong - Loan Guarantor - Serious and
prolonged
defaulters are
referred to the
department of
justice for legal
recovery
Republic of Korea (MOE) - Join Surety
- Loan Insurance
- Bar Access to Further
Credit If in Default
Republic of Korea (GECP-
Government Employees’
Scheme)
- Join Surety
- Moral Pressure:
Publication of defaulter
list
- Bar Access to Further
Credit If in Default
Philippines (Study Now
Pay Later)
- Loan Guarantors - Ineffective:
guarantors not
required to pay-off
‘bad’ loans
- Virtually no loans
repayment
Philippines (Region 5) - None
Philippines (Centres of
Excellences)
- Loan Guarantor
Thailand - Loan Guarantor
- Legal Action against
uncooperative defaulters
- SLSC reluctant to
turn to guarantors
- Currently, SLSC is
considering the use
of credit rating to
discourage default Source: A. Ziderman (2004)
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For borrowers hit by economic difficulties, the borrower can open a
discussion with the bank regarding future repayment plans. The bank has a
tendency that will open number of alternatives repayment plan in order to
have full recover loans. However, if it is intended to avoid the payment,
bank could seizure collateral or assets. But according to AH regarding the
reference from 3 relatives to give assurance the applicant will repay,
however it gives a bad impression and can make its initial purpose the social
objectives are lost if the applicant cannot make payment then the reference
would be ask for the payment.
According to Dr. Kasmir (2014) banks can do a number of things to
save bad credit
a. Rescheduling
1. Extend the credit period
In this case, the debtor can extend the credit period
for example from 6 months to 1 year so that he still has more
time to repay it.
2. Extend the installment period
In this case, the debtor can extend the installment
period for example from 36 times to 48 times, so that the
number of installments becomes smaller in line with the
addition of the amount of installment time
b. Reconditioning
This is done by changing various requirements
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1. Interest capitalization, interest is used as the principal
debt
2. Postponement of interest payments until a certain time
The point is that only interest is delayed, but the principal
debt payment must continue
3. The decrease in interest rates
The reduction in interest rates is intended to ease the burden
on customers depending on the consideration concerned.
The reduction in interest rates is expected to help ease the
customer's financial burden
c. Restructuring
1. Increase the amount of credit
2. Adding equity (cash or additional deposits from the owner)
d. Combination
Combined from the 3 things above
e. Seizure of collateral
The seizure is the last thing if the customer does not have good
intentions and is unable to pay all of his debts.
So it can be concluded that student loan payments can be made using the
balloon payment method and it is hoped that there will be government
intervention in providing deposits as collateral and providing interest
subsidies that can ease the financial burden. Repayment plan is also needed
if, at one time during the repayment period, the debtor is experiencing
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economic difficulties so that he cannot make payments, other things that have
the intention not to pay can be resolved through the party responsible for the
student and through BEI checking and SLIK the student together with his
family unable to apply for credit again because there are still outstanding
credit obligations and any necessary sanctions with consideration of the
primary objectives.