Bandung. The Rector of Bandung Institute of Technology (ITB), Reini D Wirahadikusuma, has issued an apology for the controversy related to the utilization of online loans from a private company for tuition payments. This issue arose after hundreds of students recently protested against the single tuition payment (UKT) scheme.

Reini was surprised at the nationwide attention garnered by the UKT payment scheme. The Finance Minister Sri Mulyani and the Financial Services Authority (OJK) have also commented on the issue, which has been widely covered by the media.

"We regret any oversight that led to surprise and the increased stigma surrounding online loans. Nonetheless, Danacita is merely one of the various ways through which ITB provides financial support to students, and additional information can be found on the Directorate of Student Affairs page," said Acting ITB Secretary, Taufik Hidajat, delivering the Rector's message during a press conference at the ITB Rectorate Building in Taman Sari, Bandung, on Wednesday.

On Monday, hundreds of ITB students gathered in front of the rectorate building to protest the implementation of the UKT for financially challenged students, facilitated through Danacita's online loan scheme. 

Taufik said ITB had conducted regular coordination meetings and ongoing efforts to enhance the communication system for more effective engagement with the community.  "We have carried out awareness sessions during routine coordination meetings, and we are consistently refining the system for effective communication with the community," he clarified.

Regarding the option of UKT payment through Danacita, Taufik said ITB does not advise economically challenged undergraduate students to use the online loan scheme.

"This option may be suitable for specific student needs, such as MBA, professional programs, and others that contribute to their career. It is not intended for economically disadvantaged undergraduate students and would not pass the review by non-banking institutions," he said

In 2023, Taufik disclosed that ITB allocated an Rp 80 billion ($5.1 million) scholarship from donors, benefiting 7,900 students.

"We express our gratitude to the donors who contributed scholarships totaling Rp 80 billion for 7,900 students in 2023. We appreciate them every year during the Appreciation Night for Student Partners," he noted.

Regarding financially challenged students, Taufik said there is a 20 percent subsidy for each batch provided by the government through the Smart Indonesia Student Card (KIPK).

After several protests, ITB has granted permission for 182 regular students to continue their studies and set a deadline for settling UKT payments until March 2024.

"ITB has offered flexibility, extending the deadline until March 2024. Students yet to pay the UKT can complete a study plan form and download their student ID cards," stated Yogi Syahputra, Chairman of the ITB Student Family Cabinet, on Tuesday.

Yogi further mentioned that ITB has shifted its stance, no longer endorsing Danacita online loans as the primary option for UKT payment. It was reported that fewer than 10 students had already taken loans from this online lending platform.

ITB introduced the option of online loans provided by Danacita to pay the tuition fee, set at Rp 12,500,000 ($789.79) per semester, resulting in a total payment (after interest) of Rp 15,500,000 to be paid over 12 months. This implies that ITB students would be subject to an interest charge of Rp 3,000,000. Danacita establishes an annual interest rate of 24 percent, or 0.065 percent per day, which is below the maximum interest rate of 0.1 percent per day set by the OJK. However, students feel that the interest is too high.

The surge in online loans, particularly among millennials and Gen Zs, has raised national concerns as an increasing number of young individuals grapple with mounting debts. Around 1.23 million individuals from this age group are facing non-performing loans for 30-90 days, with outstanding amounts totaling Rp 2.27 trillion. The number of non-performing loans exceeding 90 days (TWP 90) is at 331,000 users, with outstanding loans amounting to Rp 675.14 billion as of September 2023