Article Search By : Mrs. Marziati Md Din, Internal Audit Division UPM

Source : Bernama

 

SHAH ALAM: Weak financial literacy among teachers is one of the main factors that causes educators to easily get caught up in debt problems and face the risk of bankruptcy.

"Although salary deductions through Angkatan Koperasi Kebangsaan Malaysia Berhad (ANGKASA) are limited to a maximum of 60 percent of monthly salaries, there are financial institutions that allow loans to be made outside the system through direct deductions from bank accounts.

"This situation gives teachers room to take out additional loans even though their actual means have exceeded the safe limit, thus increasing the risk of facing multiple debts and long-term financial problems," he told Bernama.

In this regard, Fouzi suggested that heads of departments or human resources divisions play a more active role in monitoring the financial position of educators before providing any confirmation, to prevent them from being involved in hidden loans that are not shown on pay slips.

Previously, the media reported that Selangor recorded the highest number of bankruptcy cases in the country, with teachers among the most involved civil servants.

Malaysian Insolvency Director-General Datuk Ishak Bakri said that among the main causes of bankruptcy is high personal loan commitments, besides data from the Malaysian Insolvency Department (MDI) showing that fixed-income groups are more exposed to the risk of bankruptcy.

Fouzi said that the tendency of some teachers who are interested in business and investment also makes them easily influenced by investment or loan schemes that seem profitable, even though they do not have sufficient financial knowledge.

Fouzi also referred to the loan fraud case by a financial education platform (CSA Academy) which is described as the largest case ever handled by NUTP, involving approximately 1,700 teachers nationwide including Selangor, Melaka, Kelantan and Pahang.

He said that most of the victims had debts exceeding RM100,000 each, and there were even cases involving married couples of teachers, causing the entire household income to be affected.

"The scheme promises to settle existing debts as well as high monthly returns on condition that teachers take out new loans assisted by irresponsible bank officers.

"In the early stages, some victims received payment before the scheme failed and left them with a double debt burden," he said, adding that the Malaysian Anti-Corruption Commission (MACC) had taken action on the case.

Apart from investment schemes, there were also cases of teachers getting into debt due to being persuaded by their spouses to take out loans, becoming guarantors for debts of friends or relatives, and purchasing assets such as land and houses beyond their actual means.

All of these factors eventually led to bankruptcy notices and long-term financial problems, thus causing serious emotional stress to teachers including sleep problems, family conflicts and decreased work motivation.

"In certain circumstances, extreme pressure can lead to actions beyond control, thus affecting the image of the teaching profession and the education system," he said, adding that teachers' salaries were actually sufficient to cover basic needs if managed well.

He said that new DG41 or DG9 teachers received about RM3,200 to RM3,500 a month including allowances, while teachers' spouses should be able to live a comfortable life with proper financial planning.

Regarding the higher debt levels among teachers in Selangor, Fouzi said the situation was not simply due to income levels, but rather the highest number of teachers in the state, which is 45,000, with more than 33,000 of them being NUTP members.

"When the number of teachers is too large, the probability of cases also increases. This does not mean that Selangor is more problematic, but the cases are more prominent because of its large population," he said, urging that financial literacy education be made mandatory for all teachers, including at the Teacher Education Institute (IPG) and not just made into a side course.

In an effort to help victims, NUTP is working with Bank Negara Malaysia and the Credit Counseling and Management Agency (AKPK) to restructure loans and ensure that teachers still have at least 40 percent of their net income.

He also stressed the need for psychological support to help affected teachers deal with financial and emotional stress.

Fouzi also advised teachers, especially young teachers, not to make financial decisions alone and to seek professional advice before taking out any loans to protect their income, thus being able to carry out their educational responsibilities calmly and focused.

Date of Input: 16/02/2026 | Updated: 16/02/2026 | muhammad.isam