COST SHARING BY UNIVERSITY STUDENTS AND FEE INCREASES

Mr Low Thia Khiang asked the Minister for Education if he will explain the rationale for the long-term target of 25% cost sharing by university students and justify the recent National University of Singapore fees hike (1992/93) by making public the details of "wage and other cost increases".

Mr Lee Yock Suan: Mr Speaker, Sir, even with the recent fee revisions, university education in Singapore continues to be highly subsidised. The Government pays the entire capital cost and about 80% of the running cost of the two universities. Students in the universities make up about 5% of our student population but consume a disproportionate 20% of the total education budget. As university graduates will earn more than most Singaporeans, it is fair that they should eventually bear about 25% of the universities' operating budget. Otherwise the universities' share of the education budget will further increase, leaving less for those students who do not make it to the universities.

The universities' operating budget for financial year 1992/93 is $517 million. This is an increase of 11% over their budget for financial year 1991. Manpower cost constitutes nearly 70% of their total operating budget and has increased by 14% in financial year 1992 over financial year 1991.

Mr Low Thia Khiang: Mr Speaker, Sir, in my question I asked for details of "wages and other cost increases", not only percentage increase.

Mr Lee Yock Suan: Mr Speaker, Sir, I was giving the general picture. I do not have the details here. But if he wants them, I can supply them. There is no problem there.

Mr Low Thia Khiang: Mr Speaker, Sir, I would like the Minister to make public my question. I am asking details of "wage and other cost increases" in 1991 for NUS.

Mr Lee Yock Suan: I think the important figure is the 14% I mentioned. He can also find out the details from the budget book, for example, or from the University's annual report. It is no secret.

Mr Low Thia Khiang: Sir, why is the Ministry still increasing the University fees in the light of the Government's conclusion that wages have exceeded productivity and there should be lesser or no wage increase? Does the Minister think that parents can afford the increase?

Mr Lee Yock Suan: In terms of affordability, I think there is no difficulty. There are a number of schemes. For example, there is a Tuition Loan Scheme whereby students can borrow from the fund set up by the universities and they can repay over a period of up to 20 years, beginning two years after they graduate.

In fact, the figure shows that only about 25% of the students are borrowing from that source. Some other students are borrowing from their parents' CPF. The increase this year has in fact been very marginal. It is only 5% to 7% as compared to the manpower cost increase of about 14%. So in that sense, the Government is in fact under-recovering the cost increase.

It does not mean that the Government is spending less. The Government is also spending more. But it is a matter of policy that the share of the students should be maintained at about 20%, eventually increasing to 25%. The reason, as I have explained, is that it is fair to do this. Otherwise, they will be eating into the education budget and leaving less for the others.

Mr Low Thia Khiang: Sir, the Minister mentioned just now about loan schemes. Does the Minister think that it is healthy for the future of Singapore if our graduates are indebted as a result of study loans, even before they enter the job market?

Mr Lee Yock Suan: I think this is no different than, for example, when the students graduate and they borrow money to buy a house. So it is the same thing. The important point is that they are enjoying the most subsidy from the Government. Of course, the students will prefer that there is no fee increase. I think they should look at it positively that henceforth, the fee increases will be very moderate, keeping up with the cost increases and slowly creeping up to a 25% share.

The students can be assured that over the next few years there will be no big sudden increase, unlike in the past few years. That is the essential point.

Mr Speaker: Mr Loh.

Mr Low Thia Khiang: Supplementary question, Sir.

Mr Speaker: Mr Loh has the floor.

Mr Loh Meng See (Kampong Glam GRC): Question No. 7, Sir.