REPUBLIKA.CO.ID, JAKARTA -- The implementation of a credit scheme that provides interest-free loans for education should not create non-performing loans (NPL). Chief Economic Minister Darmin Nasution stated the idea has to be studied carefully.

"As this type of credit gives rise to several cases of NPL, even in the United States," Nasution noted in Jakarta on Friday.

Hence, Nasution believes that the education credit system must be formulated carefully, so as to not lead to new problems that could disrupt the performance of the banking sector.

"We have to create a system that is correct, and if not, it will cause problems," he cautioned.

Earlier, Minister of Research, Technology, and Higher Education Mohamad Nasir expressed hope that education credits channeled by several banks would be able to improve the quality of education. He asserted that the education credits offer immense benefits, as they can help students facing cost constraints to complete their education.

Currently, the government is conducting a thorough study on the credit education system, so that this aid can help to improve the quality of human resources. "The government is studying the system, and if possible, as long as it is done by the state, everything can be realized," Nasir remarked.

In the meantime, in a bid to improve education, the government has set aside Rp15 trillion in endowment fund for education (LPDP), as state capital participation in the 2018 state budget, Vice Finance Minister Mardiasmo noted.

"If the endowment fund has been established, we will look at it. We have so far used gains on its investment," Mardiasmo stated after a ministerial-level meeting at the Coordinating Ministry for Human Development and Culture early this month.

He noted that the government is in the process of formulating a presidential regulation to lay down a legal basis for the realization of LPDP.

He remarked that the presidential regulation will make the management of the endowment fund through LPDP more comprehensive and applicable to the entire nation in accordance with President Joko Widodo's directives.

"We will only continue the existing LPDP by increasing the needs in accordance with proposals from each ministry or non-ministerial government institution," he remarked.

At the meeting, some participants came up with several proposals, including the use of the endowment fund for scholarships for vocational education and non-degree education and for senior foreign researchers to come to Indonesia.

"As such, LPDP will really become optimal and useful for the entire Indonesian nation," he revealed.

LPDP is currently managing trust funds worth some Rp31 trillion. It uses gains on the investment of the trust funds for scholarships.

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