Defaulters owe the PSD RM1.6 billion for loans disbursed between 1987 and 2004, and Mara RM198 million.
A spokesman for PTPTN said the corporation had issued more than 60,000 reminders and 2,500 notices of claim.
He said from January next year, PTPTN would require parents to have savings in the National Education Savings Scheme before their children were eligible for loans.
Under the new conditions, parents earning more than RM2,000 a month must have RM3,000 in the savings scheme while those earning less than RM2,000 must have RM500.
"We have also made it compulsory for parents or guardians to stand as guarantors," the spokesman said.
"Hopefully these new conditions will help us overcome the problem of unpaid loans."
Apart from the "Big Three", many students have also borrowed from other sources and failed to repay.
The Education Ministry and MIC’s Maju Institute of Educational Development (MiED) are owed RM50 million each, the Penang government RM24.2 million, the Pahang government RM22 million and the Selangor government RM12 million. Perlis is probably owed the lowest amount — RM41,035 due from 22 students.
Negri Sembilan and Kelantan are not making public their outstanding student loans, saying it would cause "unnecessary alarm". Other states said they did not have the exact figures.
PSD, which has recovered RM385 million, is trying to get back RM1.6 billion.
"We give borrowers between five and 30 years to repay the loans while those who excel in their studies are given a 75 per cent rebate," said PSD corporate communications head Hasniah Rashid.
"Some of our defaulters include private students who were given interest-free loans of up to RM200,000 under a cost-sharing concept to study abroad."
Under this scheme, those who pursue critical courses such as dentistry, medicine and pharmacy do not have to repay their loans if they agree to be bonded to the government for 10 years.
PSD had issued warning letters to 13,800 defaulters early last year.
"As a result, half of them began servicing their loans while another 10 per cent settled the full amount.
"Of the remaining, some have agreed to pay us monthly.
"The rest have been blacklisted or have had court action instituted against them."
Last year, the department submitted the names of 8,288 loan defaulters to the Attorney-General’s Chambers for legal action.
The department also revoked the 75 per cent discount for hardcore defaulters.
Their spouses and children have been denied loans.
Hasniah said the department was unable to trace those who had "absconded" while pursuing further studies abroad.
"There were a few cases in the past but we have no records of the figure before 2004."
To keep track of its scholars, the PSD has stationed officers in Britain, the United States, Japan, France, Germany and Australia, where the majority of its students are located.
A Mara spokesman said: "We have about 150,000 defaulters and this has become a chronic problem.
"We even published their names in newspapers and their children have been denied admission to Mara institutions of higher learning.
"The sad part is that many of these defaulters are financially sound and there is no reason why they cannot repay their loans."
The spokesman said these people were irresponsible and selfish.
"We have appealed to them to pay as little as RM100 per month. This will at least keep the fund going.
"By not paying, they are robbing others of the opportunity to study."
MIC president and MiED chairman Datuk Seri S. Samy Vellu said: "Those who are not paying are preventing thousands of Indian students who want to study from doing so."
He said if the more than 3,000 defaulters were to repay their loans, another 11,000 students would benefit.
"What upsets me is that some of these defaulters have since become successful lawyers and doctors, earning up to RM10,000 a month.
"Words cannot describe their selfish attitude," he said. "When they come to us for loans, they come with such a sad face and beg us to help them. Now, they don’t even bother about others."
The Mara spokesman said many of these defaulters had taken loans to study abroad.
"After finishing their studies, they do not return. Not only have we lost the money, but also the expertise they would have brought back to the country."
According to figures from the Higher Education Ministry, the number of Malaysian scholars who remain abroad has dropped from 117,297 in 2000 to 56,609 in 2005.
This was attributed to the efforts of the government to woo these students back by offering them incentives.
"It does not make sense," said the spokesman. "First these students took money from us to study, then they did not repay their loans, and now the government has to ‘beg’ and offer them incentives to come back."