TEMPO.CO, Jakarta - Indonesian Finance Minister Sri Mulyani Indrawati said her ministry and the Supervisory Board of the Endowment Fund for Education (LPDP) are preparing a low-interest student loan program. The ministry is also drafting the regulation.

“In light of issues that students still need loans [for their studies], we are discussing a student loan program with the LPDP Supervisory Board,” Sri said at a press conference in Jakarta on Tuesday, January 30.

The plan comes in response to the viral news that the Bandung Institute of Technology (ITB) offers a high-interest online loan service in collaboration with a peer-to-peer lending company Danacita for students who cannot pay their single tuition fee (UKT).

Sri stressed that access to education should be open to everyone. The student loan program will aim to provide financial assistance to young people who cannot afford tuition fees. The program's funding will come from the LPDP endowment fund.

However, she mentioned that the program must not face default, which has been an issue in the United States (US), where students are burdened with huge loans.

“We have discussed it with banks, and LPDP will formulate how to make the loan affordable so that it doesn't burden the students but also prevent moral hazard and continue to provide relief, especially to those who cannot afford it,” the state treasurer explained.

Sri Mulyani further noted that the LPDP scholarship program continues to improve as its budget dramatically increased from Rp1 trillion when it was first established to Rp139 trillion, with an additional budget of Rp150 trillion.

ANTARA

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