28 Jan 2016

5 Ways Budget 2016 Will Affect College & University Students [Updated]

Malaysia’s Budget 2016 tabled last Friday by Prime Minister Datuk Seri Najib Razak was themed “Prospering the Rakyat“, where key areas included addressing the rising cost of living and strengthening economic resilience.

How does the Budget 2016 impact the higher education sector and students who are looking to enter tertiary education?

EduAdvisor looks at the some of the main areas of higher education that have been impacted.

1) Reduced allocation in government scholarship programmes

Overall, the amount allocated for scholarships, bursaries and educational assistance has decreased by 23% from RM3.459 billion in 2015 to RM2.647 billion next year.

The majority of the cuts came from the Ministry of Education (reduction of 55.5%) and Public Services Department (reduction of 14.3%).

Department2015 Budget2016 BudgetDifference
Ministry of EducationRM873 milRM388 mil - RM484 mil (55.5%)
Ministry of Higher EducationRM300 milRM251 mil- RM49 mil (16.4%)
Public Services Department (JPA)RM1,939 milRM1,661 mil- RM278 mil (14.3%)
Ministry of HealthRM258 milRM258 milNone

JPA scholarships are one of the most highly sought after scholarships in Malaysia, providing sponsorship for thousands of students both locally and abroad. With a budget cut of approximately RM278 million, students should expect even tougher competition for next year’s scholarships spots.

Update (8 Jan 2016): Based on the revised budget, there will be no suspension of JPA scholarships. However, the number of overseas JPA scholarships has drastically reduced, where only 20 top SPM graduates and 200 students on the special engineering programme will be sponsored for overseas scholarships. The remaining 8,000+ JPA scholarships will be at local public and private universities. More on JPA scholarships here.

Both the Ministry of Education and Ministry of Higher Education also experienced significant budget cuts in this category, totalling to the tune of RM 534 million.

It remains to be seen whether this will have any impact to next year’s KPM Bursary 2016 for SPM high achievers, as well as other scholarship and educational assistance programmes.

Update (6 April 2016): The government has announced the continuation of the KPM Bursary 2016 for students who achieved 9A+ and above for SPM 2015, although with some key changes. Learn more about what has changed here.

2) Budget cuts at 95% of public universities

Overall, the Ministry of Higher Education experienced a substantial budget cut of RM2.4 billion from 2015 (15.3% reduction), with local public universities bearing the brunt of the cuts.

With the lone exception of Universiti Kebangsaan Malaysia (UKM), 19 out of 20 local public universities experienced budget cuts, a majority of which were over 10%.

Notable universities include Malaysia’s top-ranked Universiti Malaya (reduction of 27.3%), as well as Universiti Teknologi MARA (23.7%) and Universiti Malaysia Terengganu (23.8%).

Here are the top universities that experienced major cuts:

Article header - Budget-05

Bayan Baru MP Sim Tze Tzin has highlighted that this may mean higher tuition fees next year, speculating that it may be around an increase of 20 percent to cover the deficit. However, Ministry of Higher Education Datuk Seri Idris Jusoh has insisted that fees will not be raised.

3) Continuation of 1Malaysia Book Voucher Programme

On the brighter side of things, the 1Malaysia Book Voucher Programme introduced in 2011 will continue next year.

Over 1.2 million college and university students are expected to receive RM250 in book vouchers (commonly known as Baucar Buku 1Malaysia (BB1M)), where they can be used at selected bookshops to purchase academic textbooks.

Outside of tuition fees and accommodation, textbooks can be a significant chunk of a student’s expenditure, so this can help to relieve some of the rising costs of tertiary education.

4) Increase in tax relief for parents with college-going children

Budget 2016 also saw an increase in tax relief for parents with children studying at colleges or universities.

For each child above 18 years old studying at institutions of higher learning (regardless whether local or foreign), parents will be entitled for a tax relief of RM8,000. This is an increase from RM6,000 previously.

5) National Service Training Programme (PLKN) returns

Earlier this year, the National Service Training Programme (PLKN) was suspended as part of cost-cutting measures. Budget 2016 will see a revival of National Service as part of the government’s initiative to empower the youth and community.

Budget 2016 allocates RM360 million for next years National Service, catering for 20,000 trainees. According to Defence Minister Datuk Seri Hishammuddin Hussein, the programme will see a new curriculum that will involve creative thinking and technical skills training.

To check if you have been selected for PLKN, visit the official National Service Training Programme website here.

What do you think of Budget 2016? Let us know in the comments below! Not sure what’s next after SPM? Check out this infographic: What’s After SPM: Are You Choosing the Right Course?

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