Guys, can one of you enlighten me, in your loan agreement documents, does the agreement allow the lender to change the repayment terms?

Thanks bro for the clarification.

And ouch that's harsh, so what they're doing is perfectly legal, the borrowers agreed to it.

Yup it's a contract between 2 consenting parties, nothing can be done.

I would say it's crazy to sign a contract like that, but I understand sometimes money for education can be desperate..

Hahaha yeah, the bank is more interested in having a guaranteed stream of income over a fixed period.

It actually irritates them when you make early settlement, so some banks charge penalties..

Hmm, your idea intrigued me, so I did some research.
After that research, I agree, EPF deductions should be part of the 'package' of loan recovery methods.

Outstanding PTPTN loans are RM39b as at Aug 2018, let's assume 50% of that is recoverable from EPF.
That's RM20b. EPF assets as at end 2017 are RM791.48b, so it's barely 2.5% of EPF NAV.

But the government fears any selldown, because the EPF already props up Bursa Malaysia and the bond market - MGS is 1/4 of the EPF holdings!
Any repayment in this manner would only be enabled by the EPF selling either stocks or bonds, thus possibly triggering a selldown in either market.

Sources:
https://www.thestar.com.my/news/nation/2018...t-through-1mdb/
http://www.kwsp.gov.my/portal/en/web/kwsp/...an-tahunan-2017