Jakarta. The Ministry of Education, Culture, Research, and Technology approved the use of official online loan services for paying tuition fees (UKT) for university students, provided they are interest-free.

Sri Suning Kusumawardani, Director of Learning and Student Affairs at the Directorate General of Higher Education, said that Law No. 12 of 2012 on Higher Education, Article 76, prohibits interest-bearing loans.

"This regulation mandates that student loans must be interest-free or without monthly fees," Sri Suning told Beritasatu.com, a sister publication of the Jakarta Globe, on Tuesday.

The ministry concurs with the Business Competition Supervisory Commission (KPPU) that peer-to-peer lending companies must not charge interest on loans for tuition fees. She said that loan products with interest or monthly fees violate these regulations. The ministry plans further discussions with KPPU to address these concerns.

"The ministry is dedicated to ensuring that no interest-bearing online loans are used for UKT payments," she added.

Sri Suning also addressed the issue of state universities working with online loan companies. In February, the Rector of Bandung Institute of Technology (ITB), Reini D Wirahadikusuma, apologized for the controversy over promoting online loans from a private company for tuition payments.

"The Finance Ministry is developing interest-free loan models to support UKT payments. Our goal is to ensure these loans remain truly interest-free," Kusumawardani said.

Finance Minister Sri Mulyani plans to introduce a student loan program funded by the Indonesia Endowment Fund for Education (LPDP), inspired by a similar US model. Under this program, students can take out loans for tuition, with repayments made after graduation and employment.

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