UNIVERSITIES AND POLYTECHNICS (Percentage of students taking tuition fee loans)

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UNIVERSITIES AND POLYTECHNICS:

(Percentage of students taking tuition fee loans): 15.

Mdm Halimah Yacob asked the Acting Minister for Education (a) what is the percentage of Singaporean students studying in the local universities and polytechnics who have taken up loans to finance their education; (b) whether this number is increasing or decreasing; (c) how many have difficulties paying back

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the loans after graduation; and (d) what other schemes are available to help needy students.

The Acting Minister for Education (Mr Tharman Shanmugaratnam): Mr Speaker, Sir, for Academic Year 2002/2003, about 32% of Singaporean students studying in our local universities took up a tuition fee loan to finance up to 80% of their cost of university education. 5% of them also took up an additional study loan to finance the remaining 20% of the cost of university education and living allowance. The additional study loan is available to students whose family income is within the MCDS' means-tested income limit for public assistance.

For polytechnic students, about 6% took up the tuition fee loan, and 0.1% took up the additional study loan in Academic Year 2002/2003.

Between 2000 and 2002, we have seen a slight increase in the number of students taking up a loan to finance their higher education. The number of students taking up tuition fee loans increased from 8,903 to 9,000 at the university level, and from 2,356 to 2,650 at polytechnic level during the period, ie, from 2000 to 2002. The number of students taking up an additional study loan increased from 860 to 1,376 at the university level, and from 32 to 51 at the polytechnic level.

As at 30th June 2003, the number of university graduates with outstanding loans was 15,854. About 1% of them, ie, about 150 graduates, have had difficulties in paying back their loans. Amongst polytechnic graduates with outstanding loans, who number 4,674, about 3%, ie, about 135 graduates, have difficulty repaying their loans.

Other schemes available to help needy students include the University and Polytechnic Bursaries granted by the CCCs, Mendaki Tertiary Tuition Fee

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Subsidy, as well as the bursary schemes and loan schemes that are administered by the universities and polytechnics themselves.

Mdm Halimah Yacob: Mr Speaker, Sir, I have two questions. With regard to those students in the universities and polytechnics who are not able to pay their loans within the time prescribed, are they given some flexibility to do so beyond the time prescribed? Secondly, are there on-going assistance programmes or counselling service provided to students who have financial difficulties throughout their period of study?

Mr Tharman Shanmugaratnam: On the first question, students who have difficulties in repaying their loans can discuss with the banks for a restructured schedule for repaying their loans. But the maximum period remains unchanged, which is 20 years. It is quite a long period. So far, that has not itself been the problem for the small number of students who have had difficulties in meeting the payments on schedule. But rescheduling the payments so that they pay a little more later rather than earlier is possible, and they have to discuss that with the banks.

What is your second question, please, Mdm Halimah?

Mdm Halimah Yacob: My second question is: does the Ministry have any on-going counselling service or assistance for the existing students?

Mr Tharman Shanmugaratnam: Yes, there is a range of schemes. Besides the MOE-funded schemes which I mentioned, ie, tuition fee loans and so on, the universities and polytechnics themselves have their own bursary schemes. These are quite apart from what is provided by the community.

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Mdm Halimah Yacob: Sir, does the Minister consider 30% of students in the university not being able to pay and having to take up loans a high figure? Is that comparable to what many other countries in the world have, that 30% of students have to take up loans? How does that compare with five years ago, for instance, instead of just with 2002? And how will these have a bearing, if university fees continue to increase, as I think the full extent of the subsidy increase has not been met, in accordance with MOE's previous statements?

Mr Tharman Shanmugaratnam: 30% taking loans is not a high figure. There are countries where the figure is significantly higher. It varies internationally, depending on the rate of subsidy of university education. MOE is doing a thorough review of the financing framework for universities, looking at sources of funding, how the universities should spend their money, how much of an undergraduate and postgraduate education should be subsidised by Government, how should students themselves finance themselves, should they obtain loans, should they work during vacations, for instance, which is quite common in many countries. We are looking at it comprehensively.

My sense is that, over time, the percentage taking loans would go up, not come down. 30% does not indicate that students are in distress. This is in fact part and parcel of tertiary education. You expect to earn income after you graduate. You take a loan and, after you graduate, you use a small part of your income to repay that loan. It is quite common internationally, and I think we want to move increasingly in that direction, rather than upfront subsidies in a hefty fashion, for tertiary education. Certainly, for university education.