Before public universities, the government also establish vocational university

Before the 1980s, there were only five universities in Malaysia – Universiti Malaya, Universiti Sains Malaysia, University Kebangsaan Malaysia, Universiti Putra Malaysia and Universiti Teknologi Malaysia, the number was more than doubled in the next decade. Today, there are 24 public universities in the country.Besides setting up more public universities, the government also establish vocational university colleges in suburban areas around the country and encourage the growth of private higher education through the introduction of the Private Higher Educational Institutions Act 1996, to meet growing demand and the need to diversify choice for higher education.By 2002, 15 private universities were established by either government-linked companies or political parties linked to the ruling regime. Since then, other private colleges have been upgraded to university status, bringing the total number of private universities to 42 today, excluding eleven foreign university campuses.In addition, a lot of private colleges and university colleges were also set up.

In fact, enrolment in  private higher education has become so higher that the recently published Malaysia Education Blueprint 2015-2025 (Higher Education) forecasts that private higher education enrolment will surpass public ones by 2025.A key factor that drove the growth of higher education enrolment, both in public and especially private institutions, is the establishment of the National Higher Education Fund Corporation (PTPTN) in 1997. With student loans made available to the public, higher education became instantly accessible to many school-leavers who previously have not been able to afford it. Accordingly, university enrolment grew aggressively from around 60,000 a year in the early 1990s to more than half a million now.PTPTN Education Financing Scheme was established under the National Higher Education Fund Act 1997 (Act 566), beginning operations on 1st November 1997.

It is for the purpose of providing education financing to students pursuing studies in local institutions of higher education. This education financing will enable students to finance fully or partially the course fees and their cost of living for the duration of their study. Thus providing more opportunities for students to pursue study at the tertiary level.Its objective is to ensure efficient financing loans provided for eligible students to pursue education at higher learning institutions in line with the government’s aspiration to guarantee no student is deprived from tertiary education due to financial reasons. With this, Budget 2010 announced that the loan holders with a first-class honors degree will now be able to convert their loan retroactively into scholarship, without any repayment obligations. PTPTN was tasked with the responsibility of distributing and administering educational loans to help poorer students finance their higher education in terms of tuition fees and living costs.

The PTPTN loan is made available to students pursing studies at all local public and private universities, as well as polytechnics. Students pursuing their diploma, first degree, master, doctorate or professional courses are eligible to apply for these loans. Though the PTPTN loans were originally intended to aid those students in public higher education institutions (IPTA), there has been a high increase of loans provided to students from private higher education institutions (IPTS) over the years. The Malaysian government began to officially recognize loan requests from students studying in IPTS largely because of the IPTS’ ability to meet excess demand for higher education, something that the IPTA could not fulfil.