Higher Education Ministry Details Student Loan Plan in Indonesia
Reporter
April 3, 2025 | 06:57 am
TEMPO.CO, Jakarta - The Indonesian government will soon implement a student loan to aid students with tuition fees. Deputy Minister of Higher Education, Science, and Technology (Kemdiktisaintek) Stella Christie explained that students will only be required to repay the loan after working and earning a certain wage benchmark.
"Repayments will only be made after the annual wage exceeds a certain income threshold, for example, Rp54 million per year," said Stella to Tempo in a written statement on Tuesday, April 1, 2025.
Additionally, the government claimed there will be insurance in place to reduce the risk of bad credit once the student loan is implemented. The repayment will be made through automatic deduction from the borrower's salary, which Stella said will minimize the consequences.
The ministry is planning to launch the student loan scheme in August or September 2025 through a collaboration with the Education Fund Management Institution (LPDP) and the banking sector.
Under the proposed student loan scheme, banks will provide loans to students, similar to micro business loans (KUR). LPDP will cover insurance premiums and interest payments to the banks on behalf of the students, while the Kemdiktisaintek will act as the credit manager and guarantor.
She further detailed that the loan scheme will involve interest, but students will not be responsible for paying it. “The fixed rate of interest will be paid by LPDP to the students at the beginning of the loan, to be submitted to the bank along with the installments,” she said.
This announcement marks a shift from a previous statement by Minister of Higher Education Brian Yuliarto. He had earlier indicated that his ministry was preparing to establish a loan institution specifically aimed at assisting students with tuition fees, stating that the plan was still in its formulation stage.
“So how can we engage the public to establish an institution as much as possible? This institution will provide minimal loans. Later, this institution will provide loans minimally,” he said when met at the Kemdiktisaintek Office on Friday, March 14, 2025.
Brian had also stated that students would repay the loans in installments after graduation. He expressed hope that the program would be implemented soon, as it is intended to support students facing financial challenges.
M. Rizki Yusrial contributed to the writing of this article.
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