UNIVERSITY FEES

Mr S. Chandra Das (Cheng San GRC): Mr Speaker, Sir, first of all, I would like to inform the House that many people who gave their views to the Feedback Unit do not dispute the need for the Government to reduce subsidies for universities in the long term. As rightly pointed out by the Minister, out of the total expenditure on education, 20% was spent on university education, which accounts for only 5% of the total student population. There is, therefore, a need for the Government to reduce subsidies for university education to a reasonable ratio. This will enable the Government to allocate more funds for primary, secondary and the VITB.

However, Sir, some felt that the quantum of the increase is too high and too drastic. They felt that the quantum should be smaller and more gradual. This round of increases of 35% to 50%, some felt, could have been done over a couple of years. Many also felt that the reduction of subsidies should be over a longer period of time. In fact, why such a great hurry?

Sir, it is also a relief that the ceiling for tuition loans has now, as the Minister has announced, been raised to 65% to cushion the impact of the fee increases. Some, however, fear that many poor students may still not want to take advantage of these loans. As earlier pointed out by the Minister, only 20% and 26% of NUS and NTI students respectively applied for tuition loans last year. They felt that the two universities should seriously look into the reasons why poor students are not applying for these loans and when they know the reasons, they should come out with appropriate measures to encourage more students to take up these loans which are designed to help the students. The Government's decision to make it easier for the students to repay their loans is welcomed. However, I would urge the Minister to get his officials to explore ways to help poor students cope with the fee increases. First and foremost, the loan schemes must be easily available and with minimum administrative inconvenience to all applicants.

Mr Speaker, Sir, while welcoming the Government's decision to raise the loan ceiling, some felt that the ceiling for tuition loans should be raised even further. In particular, medical and dental students, whose tuition fees are much higher than those of other students, should be given a higher loan ceiling. Some even suggested that the ceiling for tuition loans should be raised to 100% so that the financing of their education would not be a source of worry to our university students and their families.

Mr Speaker, Sir, the two universities, some felt, should also look into ways to cut costs. We are only looking at one side of the expenditure. Maybe the universities should look at ways to cut costs. They should, in the opinion of some, be frugal in their spending and should endeavour to trim their expenditure. In this respect, they could perhaps get examples from foreign universities which are able, I am told, to operate at a lower cost. In addition, they should provide more information to the public on their expenditure. The public must be assured that the increases in operating costs are not due to the inefficient management of the universities. To further ensure that their resources are well spent and properly controlled, the two universities should seriously set up audit committees. Public-listed companies are now required to set up audit committees. Maybe the universities should also set up audit committees and review their expenditure policies.

Mr Speaker, Sir, some have noticed that foreign students in our universities are not paying as much for tuition fees as Singapore students in foreign universities. They propose that foreign students studying in Singapore universities be required to pay more for their tuition fees. This, to some extent, will reduce the burden on our own students, as this is the practice in many countries.

Sir, all those who gave their views to the Unit felt that there is a need for the two universities to look into ways of generating revenues themselves, as the Minister mentioned in the statement. They share the Minister's confidence that our universities should be able to set up their own endowment funds, just like Princeton, Cornell and Harvard Universities. In this respect, I share the Minister's view that the university alumni will respond favourably to the universities' call for support and, as the Minister has called on Members in this House who are, like myself, former students of the universities, we would definitely support such a call. As beneficiaries of the educational system, I am sure my other colleagues will feel that we have a stake that the universities succeed.

Sir, the universities also need to boost their image to facilitate their efforts in seeking financial support from the public. To do this, the universities should carry out more public relations activities to promote public awareness of their schemes. This will definitely help them in soliciting for financial support. The Government could consider some incentives for corporations and individuals to donate generously to the universities.

Sir, there were many other suggestions on how the universities could generate additional revenue to meet the increasing costs. The universities could expand on their research and development projects with the private sector. They could also provide consultancy services to the private sector. These are carried out by many reputable overseas universities.

Finally, I would like to state that there is no strong objection to the Government's move to reduce subsidies for universities. Many appreciate the Government's commitment to education and agree with the need for reducing subsidies for universities so that funds can be used for other areas. But, however, quite a few believe that this objective could still be achieved in a less painful manner. More information should be given to the public and relevant bodies, like the students' union, and the students' union should have been consulted, and I hope that the Minister will consult them before further fee increases are announced in the future.

Dr Ong Chit Chung (Bukit Batok): Mr Speaker, Sir, I wish to thank the Minister for his reassuring statement and for this opportunity to speak on the issue.

Sir, no one in his right mind would quarrel with the necessity for a fee increase. With rising costs and inflation, you cannot just freeze the fees. Neither would one dispute the need to reduce the universities' dependence on the Government for grants. No self-respecting universities should be completely tied to the apron strings of the government. They must flourish on their own.

But the fee hike is simply too steep and too drastic. We have three big hikes in the last four years. If you use the 1986-1987 fees as the base-line, the fees have risen by 192% for non-laboratory based faculties, 263% for laboratory-based faculties, and 731% for Medical and Dental Faculties. This is too much; too soon. University education may become less and less affordable.

Sir, one must also bear in mind that university undergraduates need to pay for personal expenses, like transport, photocopying in the university, meals at the campus, not to mention hostel fees for those who have to stay, for example, at NTU. We must also consider that they need to have some allowances for dating, or pak tor, to lighten the burden on the Social Development Unit (SDU). We want them to socialise, so I am sure they need expenses. It is true that many students work as private tutors to pay for these fees. But there is a limit to what they can do, lest they become full-time tutors and part-time students and, in the end, end up at being good at neither of them.

My plea to the Minister is to spread out the fee increase, do it more gradually over a period of years. Slow, or gradual, and steady win the race.

The GPC on Education, therefore, welcomes the Minister's pledge that fee increases in the future years will be smaller, and not as large as in the last four years. This is quite reassuring to all of us. We also welcome the Minister's concessions in raising the student loans to 65% of the tuition fees, in extending the repayment period from 15 to 20 years, and delaying the commencement of repayment from one to two years after graduation. All this, I am sure, will help the students.

Most encouraging of all is the launching of the universities' endowment fund. This is a positive step in diversifying the sources of funding for the two universities, a step which I hope would make it less necessary to raise fees sharply ever again. I would, therefore, urge foundations, companies and graduates to come forward, to support the endowment fund and rally behind these two universities. Big corporations and, particularly, Government-owned companies should take the lead. The Turf Club could kick off the donation drive with a lump-sum donation of, say, $50 million to $100 million.

Graduates, who have benefitted from university education, like ourselves here in this House, should give generously to their own universities. I have a suggestion that NTU, with the consent of NUS, should transfer the names of the Nanyang University graduates to its own alumni rolls and tap on the tremendous goodwill that I think still exists for the former Nanyang University and build upon this goodwill.

I will say this: donations to this endowment fund will be money well spent. It will be an investment in Singapore's future and in the well-being of the next generation of Singaporeans. I personally would pledge support for this endowment fund. 2.00 pm

Dr Low Seow Chay (Chua Chu Kang): ( In Mandarin): Mr Speaker, Sir, first of all, I would like to declare my personal interest. I am a lecturer in the Nanyang Technological Institute. The views I am presenting today do not represent the interest of the University.

The fees announced for next year's university courses are increased by some 30-50% as compared to the previous year's fees. From the angle of the students and their parents, such a large increase is somewhat over-done. I feel that this may be difficult for our students and their parents to accept. I sympathize with these students, particularly the Singaporean students, and the parents who are affected by this increase in fees.

According to a report in Lianhe Zaobao on 30th April, Mr Er Kwong Wah said that Dr Tony Tan had indicated that he would consider making future increase in university fees more gradual rather than a one-time large increase. This report implies that the Minister for Education has, in principle, agreed that the increase should be done gradually in reaching its target. I feel that if the Minister for Education is serious about what he was saying, it is still not too late. If we can reduce the margin of increase by half, and spread it over two years to attain its target, then I believe the students and their parents would support and accept it.

When announcing the increase in fees, the Minister for Education as well as the Vice Chancellor of NUS and the President of the Nanyang Technological Institute gave the assurance that no student would be deprived of a place in the university because of his parents' inability to afford the university fees. This same assurance was given when the concept of independent schools was introduced. The Ministry of Education was very quick in announcing that 50% to 100% subsidies in school fees would be given to students who came from poor families, depending on their income.

I would like to ask the Minister: If the students, despite the loans either from the university or from CPF, are unable to pay for the remaining portion of their fees, then will they be subsidized in the way that it was done in the independent schools?

In announcing the increase in fees, Professor Lim Pin also mentioned that there are some 10-14% of our university students who come from ASEAN countries. Based on my estimation, about 2,000-3,000 of them are occupying places in our university. This figure is much more than what I had imagined it to be. Under the present circumstances, there are many of our local students who qualify for admission to the university, but cannot find a place there. Those who can afford will go to other countries to further their studies. I feel that the Ministry of Education should consider reducing the number of places given to foreign students so that our local students, particularly those who cannot afford to go overseas, can have a chance to complete their university studies in Singapore.

At a time when our Singaporeans are unhappy with the increase in university fees, we find that thousands of these ASEAN students are almost unaffected by this present fee increase. By this, I mean those who are doing courses other than medicine and dentistry. This is quite contrary to what an ordinary citizen thinks it should be, because it is one of the State's duties to provide subsidy to a certain extent for its citizens to pursue their education. Is the State obliged to give these foreign students such heavy subsidies? This is one question which deserves our careful study. In the present circumstances, our local students are gravely affected by this large increase in fees, but the ASEAN students are not affected. Under such circumstances, it is no wonder that many local students and their parents have misunderstood the Government's policy, and feel that this round of fee increase seems to favour these foreign students. In fact, a friend of mine told me very bluntly that it seems to be better to be a foreigner than to be a Singaporean.

In the letter written by the students to our Members of Parliament, they have introduced some 10 recommendations and I am very glad to hear from the Minister that some of the recommendations have been accepted. I am very grateful to him for this. I believe some students will be happy to benefit from the increase in the quantum of the loan available to them, thus alleviating some of the effects of the present fee increase.

Among the recommendations, there is one which I feel warrants our support, ie, if the students' parents do not have sufficient CPF savings to pay for the fees, whether the CPF savings of the brothers and sisters could be used for this purpose. I feel this recommendation will be of great help to those students who come from poorer families. In fact, there is already precedence in this arrangement in our Medisave scheme. More importantly, when the student graduates from the university, he would still have to repay the amount borrowed back to the CPF account. I feel that this recommendation can be acceptable to the Minister for Labour and I hope that he would seriously consider the suggestion.

Mr Choo Wee Khiang (Marine Parade GRC): ( In Mandarin): Mr Speaker, Sir, the recent announcement by the Minister for Education to increase the university fees has caused unhappiness to many people and everybody seems to be talking about it because the margin of increase is very high. However, everyone seems to be concentrating on the margin of increase and has neglected the actual reason for such an increase.

In principle, I support the Government's policy to gradually reduce its subsidy on university education so that the fees may be able to more accurately reflect the cost of providing university education. However, there should be a very important condition attached to the said policy, ie, the Government should ensure that our Singaporean students should not be deprived of the opportunity to complete their university education simply because they could not afford the fees.

Just now, a number of my Parliamentary colleagues mentioned that the increase in fees should be made more gradually, perhaps spread over a period of two or three years. To me, I would rather suffer a sharp pain than a protracted suffering. Why prolong the agony? Our undergraduates and candidates for university enrolment should realize that education does not come cheap. It is an extremely expensive long-term project. Particularly for Singapore, if we want to be competitive in the international market, to have more professionals and management experts, and to attract more well-known scholars to come over to Singapore so that our students would have better opportunity to learn the most advanced technology in the world, then our local students and Singaporeans should realize that they should take up their own responsibility in certain areas.

On this occasion, it is true that the margin of increase in university fees is rather high. Many people said that they were not expecting such a huge increase. I hope that the present and future university students in Singapore should think carefully and calmly about their responsibility to society. The responsibility that they should take is to pick up the burden of paying their fees for the education that they are provided with. Now, the Government is not asking them to pick up the full cost of their university education immediately. Government loans will be available to them. However, surprisingly, there are not many students applying for such study loans, according to Mr Cham Tao Soon. As such, the Government should conduct a survey to find out why the students did not apply for these loans.

The Minister for Education announced just now that loans could be applied for up to 65% of the fees. To a certain extent, this may not be adequate. The Government and the Ministry of Education should know that some families which are not so well-to-do may require more loan. I hope that the Minister for Education would give his sympathetic consideration in this matter.

If we want to increase the university fees and, at the same time, do not want to increase the burden of our taxpayers, then what should we do? I think the most practical and equitable measure is to make the university graduates who were given the benefit of receiving university education to bear this responsibility of repaying the loan they took from the Government, after they have graduated and have started working. I believe this will be of help in the provision of university education to the next generation of Singaporeans, because I do not believe in the Government having to continue perpetually and unlimitedly providing large subsidies to our university education. It cannot be denied that our university students are getting great benefits after their graduation from the university. Of course, if you take today's standard you may say that the university fees are expensive. But if they think of the returns that they are going to get in future, the price they are paying is indeed negligible. So, in my view, this increase in university fees is beneficial to the future development of Singapore.

What I want to emphasise is that there should be adequate loans available to the students who need them. At the same time, I would suggest that the repayment of loans should be minimal initially and it could be increased annually according to the increase in their income.

With regard to the setting up of an endowment fund, as mentioned by the Minister for Education just now, Dr Ong suggested that the large enterprises in the private sector in Singapore should come forward to support this endowment fund. I feel that the Government should be the first to help. I hope that the Government will quickly come forward to take the lead in setting up this fund.

Mr Lau Ping Sum (Yio Chu Kang): ( In Mandarin): Mr Speaker, Sir, in any vibrant society, there must be a group of people forming the backbone of the Government departments and the private sector to take the lead so that they could show the way forward. In the cultivation of talent, the university plays an indispensable role. In Asian societies, parents attach great importance to education and most of them hope that their children would be able to complete university education. Many sociologists hold the view that one of the main reasons for the "Four Little Dragons" in East Asia to have such remarkable achievements and economic prosperity is that our parents are very concerned with their children's education. We can see that in the United States, the children of many Asian immigrants achieve outstanding results in their studies. This is attributable to the parents' emphasis on good education.

We have heard the Minister for Education describe the high cost of providing university education. For the undergraduates who made up only 5% of the total student population, 20% of the total recurrent educational expenses is incurred. On the question of increasing university fees, different views prevail. Those who agree with the increase have the following reasons to think so: First, because of technological progress, more sophisticated and advanced equipment is being produced each year. In order to keep up with current developments, we have to keep on buying new equipment. The students should bear some of the costs of maintenance. Secondly, I believe the principle of "user-pays" is acceptable to most. Thirdly, we can look at the experience of other countries. For example, in some universities in the European countries, almost all the fees are subsidized by the government. In Holland, the students have six years to complete their university education. They have a good time doing little work and thus waste their country's precious resources. With the fee increase in Singapore, our students will realise how valuable university education is.

Those who object to the increase in fees feel that our university graduates are the cream of our society and education is a long-term investment. We should therefore give them full support so that every one of those students who are capable of completing their university studies could do so, and not just those who do exceptionally well or are brilliant enough to qualify for scholarship. We must ensure that no student who is capable of completing his university studies will be deprived of the opportunity because of financial reason. The second reason is that if the fees are too expensive then some students from the poor family may give up the idea of going to the university. Thirdly, the increase in fees may result in increasing the psychological pressure and burden of the parents.

Another point is that we keep hearing from the people that fee increases are too frequent and too steep. I feel that the idea of having the students bear part of the university's operational cost is accepted, but the question is how much? Should the Government's subsidy in the long term be targeted at 60%, 70%, or 80%? We should have a more thorough study. Let the people have more opportunities to air their views so that we could pre-empt some misunderstanding and doubts. If the subsidy is too high, like the Dutch Universities, the students will take their education for granted and they will enjoy life and waste time. If the subsidy is too low, then the burdens of the parents will be too heavy.

Although there is a tution fee loan scheme, some students and parents are reluctant to borrow money from the authorities because they adopt the prudent attitude of "not borrowing money before earning it".

There are three types of fees. The first is non-laboratory based. For example, the arts or social studies. The second category is laboratory-based, for example, science or engineering. The third category consists of medical and dental courses. I would like to know whether the universities have carefully analyzed the allocation of recurrent expenses. For example, arts students who are studying history and geography may not have frequent use of the computer services. On the other hand, those who are studying economics and statistics may have to use the computer very frequently. Are they charged any additional fees for the use of these computer services? The research work in the university may involve the use of expensive equipment. Will these expenses be charged separately? If we are going to strictly adopt the policy of "user-pays", then the expenses of each department or faculty should be carefully categorised in detail in order to decide whether they should be subsidized by the Government, or charged in part to the students. For example, are the depreciation and maintenance cost of the expensive equipment included in the cost? As for the NUH, how much of the expenses is incurred for research and how much is used for teaching?

Singapore is a society which provides equal opportunity for education. As long as the children have the ability to study, they should not be deprived of the opportunity because of financial hardship. The increase in university fees does not mean the end of the road for the aspiring students. We should continue to find all the ways and means to support every student so that he or she will have a complete education.

Dr John Chen Seow Phun (Hong Kah GRC): Mr Speaker, Sir, while I understand the rationale and support the principle behind the university fee hike, I would like the Minister to look into three areas to help lessen the impact of the present as well as future fee hikes on university students and their families.

First, in addition to the improved terms and conditions of tuition fee loans mentioned by the Minister, the Ministry should make it easier for students from the less well-off families to qualify for bursaries and the interest-free university study loans. This will go a long way in helping these families now that they have to pay an average monthly sum ranging from about $300 to $900.

Second, the Government should actively help the universities speed up the establishment of their endowment funds and help secure wider sources of income. One way is perhaps to match dollar for dollar any donations to the universities.

Third, since the subsidy for the universities is going to be reduced further to 60% of the operating costs in the long term, and operating costs can only go up, the Government should take another look at what expenditures constitute the operating cost. In this respect, I agree with Mr Lau Ping Sum. For example, is university R&D expenditure part of the operating cost? I think it should not be, because undergraduates should not be made to pay for R&D expenditure. In overseas universities, research is funded by national science councils or private companies or both. Research equipment and research staff expenditure are therefore paid for from the research fund secured by the academics. Even mainframe computer time for research work is charged to the research fund. This means that costs for computer resources, for example, should not be completely included in the operating costs for university teaching. And this is important because research work is a heavy user of computer resources. Universities should therefore work out an accounting system to reflect the true operating costs for teaching.

Sir, I hope the Minister will consider the issues which I have just raised.

Encik Abdul Nasser bin Kamaruddin (Hong Kah GRC): ( In Malay): I welcome the statement by the Minister for Education on the increase in university fees. There are several reasons why I find the statement heartening:

1. Nothing in the statement indicates any intention on the part of the Government to abdicate its responsibility in raising the quality and standards of our children's education.

2. The statement also affirms the Government's commitment and that of corporate bodies, the private sector, and individuals, to continue to contribute towards educational excellence, which is a fundamental investment in nation building.

3. The fee increase does not involve higher cash payments, except in medicine and dentistry.

4. A higher ceiling will now be allowed for tuition fee loans and easier loan repayment terms will be provided.

5. The statement also shows the Government's desire to find a balance in granting subsidies for our students.

6. The establishment of an endowment fund will allow the universities to be self-supporting and reduce their dependence on taxpayers' money.

7. And most importantly, the statement stressed that the increase in fees will not prevent the admission of qualified students who cannot afford the fees, because the Government has given assurance that study loans would be increased.

Nevertheless, I would like to make the following proposals:

Firstly, on the increase in the maximum tuition fee loan, from 50% to 65%. I think this ceiling should be raised to 80%. We already have a parallel of this in a similar rule under our home-ownership policy, which allows loans of up to 80%. The higher ceiling would also reduce the burden of the cost of education to be borne by parents, especially those with up to four children, as advocated by our current population policy.

The use of CPF funds for education can of course reduce this burden but with the recent changes in the system, with our children's education now stretching from pre-school to university, the cost of education to be borne by parents will go up, a problem that can also affect their ability to respond to the Government's call to own more comfortable homes.

I agree with the suggestion by student leaders to extend the repayment period of loans from 15 to 20 years and to delay the start of repayment from one to two years after graduation. In this regard, I would like to suggest that the Government allows our graduates to make repayments from their own CPF accounts. This is to encourage a spirit of self-reliance and allow better use of CPF for education.

I would also like to appeal to the Government to determine a certain percentage of tax income or corporate levy meant for training, research and development to be channelled to the NUS/NTI endowment fund, besides depending on individuals and the alumni associations of each university for contributions. The universities should also strive to cut down administrative expenditure. Wider usage of computers, solar power systems, more sophisticated IT systems, etc, are examples of long-term cost-saving measures that can be exploited.

Dr S. Vasoo (Tiong Bahru GRC): Thank you, Mr Speaker, Sir, for allowing me to join in the debate.

Sir, I am pleased that the Minister has announced some measures to reduce the financial burdens of families whose children are taking tertiary education. Despite that, many parents are still concerned about the increasing financial burden for tertiary education. Sir, I have several questions in mind. First, will university education continue to be accessible? Will more loans and bursaries be made available in future? Will the criteria for loans and bursaries be less stringent? Will future fees be increased at a reasonable rate? I know that the Minister has answered some of these questions that have been bugging the minds of many parents.

Sir, I know that the Minister has been supportive and being a caring person he will probably ensure that university education will be made as accessible as possible to all deserving students and those who can be admitted into the university.

Sir, on the students' aspect, I must say that students must appreciate that with the community support, they have had this opportunity for tertiary education. They must, after graduation, contribute to our community which has given them that opportunity for tertiary education. I hope that most of the graduates will support the endowment fund which has been proposed to be established. Sir, I must say that parents are not against the fee increase, but what they are looking forward is a reasonable fee increase which they can cope with.

Sir, I hope that in future the fee increases will be reasonable. I would like to ask the Minister two questions. First, I would like to find out whether the percentage of the loan could be further increased from 65% to 75%. Second, whether more bursaries will be made available, and the criteria for granting of bursaries be reviewed so that the students who are more deserving and those from the lower income families could in fact apply and make use of such opportunities available in the university.

Mr Speaker: Order. I suspend the sitting and will take the Chair again at 3.00 pm.

Sitting accordingly suspended at 2.31 pm until 3.00 pm. Sitting resumed at 3.00 pm