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8th March 2006 FY 2006 Committee of Supply Debate 6th Reply by Minister on Tertiary Education
Providing An Affordable and Top Quality University Education
1. The Government’s objective is to ensure that our universities, polytechnics and ITE provide Singaporean students with a top quality education at affordable cost. An affordable, top quality education. Not a lowest cost, low quality education. This is in fact what our universities are providing. They are able to do so for three reasons - because the governments funds over three quarters of the costs of an undergraduate education; because they charge realistic fees; and because they provide substantial financial assistance to needy students. It allows for needs-blind admission - you get in as long as you qualify on merit, and the universities help you finance your education if you are in need. It allows for a top quality education, affordable to all university students.
2. This situation is quite different from that in most other developed countries. In the
3. In
4. We have avoided this. And we can provide an excellent university education to Singaporeans if we keep up public funding at 75% of costs as we will do, and if our universities charge realistic fees while providing every needy student with financial assistance. What we must not do is to give up on quality, give up on getting good faculty, improving teaching and keeping the labs up to date. The universities have to aim to provide the highest quality, while keeping overall costs under control.
5. Let me say something about quality. NUS and NTU are ranked within the top 50 universities in the world globally by the Times Higher Education Supplement survey. That’s well known. But what is more remarkable is that NUS and NTU are providing top-quality education to a sizeable proportion of Singaporeans, a far larger proportion of citizens than what the top universities in other countries provide. We are providing high quality to all our university students, not high quality for a few. NUS and NTU take in slightly more than one-fifth of each
6. We all have a stake in ensuring our universities provide high quality and receive international recognition for it. The high standing of NUS, NTU and SMU is in the interests of the students, alumni, donors and all stakeholders, and for University Fees 7. I think we all agree that university fees need to be revised regularly in our universities to allow them to meet their cost increases, while improving on the quality of education they provide.
8. I should clarify that the fee increases this year are not a consequence of the new funding model that the autonomous universities would have. The autonomy framework only begins in April. There is also no intention on the part of the universities to raise fees by 10% every year once they go autonomous. The universities would want to keep fees within reach of Singaporeans. And the government will ensure that this remains the case.
9. What is the record so far? Over 2000-2005, fees in NUS and NTU increased by an average of 1.8% per year. This is in fact lower than the average wage increase in
10. We will keep tuition fees within reach and avoid large increases like what we have seen in
11. Our universities are fully aware of the need to keep their costs down. They have put in place cost control measures. Specific measures include reducing administrative staff headcount, bulk tendering for goods and services, demand aggregation for electricity, outsourcing non-core activities, and leveraging on IT to improve productivity. As for the NUS University Hall which Mr Tan Soo Khoon spoke about, it was funded by philanthropic donations. Keeping Education Subsidies Equitable 12. So we will keep up a hefty public subsidy, and adjust the subsidies to keep pace with the cost of providing a high quality university education. But, what we cannot do is to increase the share of Education budget to our universities and reduce the share that goes to the rest of the education sector.
13. Overall, MOE funding for our universities constitute about 1% of GDP. This is in fact higher than what some developed countries spend on the tertiary education sector. It means that MOE currently allocates one-quarter of the Education budget to our universities, higher than ten years ago when we provided about one fifth of our Education budget to the universities. The main reason for the increase is that we now provide for a larger percentage of our students to study in our universities. I can justify our significant investment in university education as there are wide benefits to the economy.
14. But we cannot keep increasing our subsidies to the universities, because more money for the universities means less money to our polytechnics, ITE and schools. It would not be equitable to do so. Each university undergraduate already receives a much larger subsidy from the Government than a polytechnic, ITE or school student. The average Government funding per year which a university undergraduate received last year was twice that of a polytechnic or ITE student. Moreover, a university graduate is subsidised for more years of education, compared to polytechnic or ITE students. So on average, the Government subsidises a university student over the 6 years of his post-secondary education including JC, by 5 times more than we subsidise an ITE student over his 2 years of post-secondary education and 3 times more than we subsidise a polytechnic student over his 3 years of post-secondary education.
15. So it would not be fair to take more resources away from our schools, ITE and polytechnics in order to give more to university students. We must ensure that the benefits from spending our Education budget are spread fairly, and do not accrue disproportionately to a relatively smaller group of students. This is especially when university graduates are expected to have higher lifetime earnings than poly and ITE graduates.
16. What is important is that MOE and the universities are committed to two key things. Firstly, to continue to enhance the quality of university education, and secondly, to ensure that university education is accessible and affordable to Singaporeans. We will ensure that no student admitted to our universities is deprived of a university education because of financial difficulty. Financial Assistance for Undergraduates 17. MOE and the universities have substantially increased financial assistance for university students who need it. Let me mention the enhancements to financial assistance for university students.
18. First, from AY2006, the maximum Tuition Fee Loan quantum will be increased from 80% of fees to 90% of fees to minimise the cash outlay by students during their period of study. Currently, the Government provides the Tuition Fee Loan which covers up to 80% of the tuition fee payable by students. Needy students can also obtain an additional Study Loan for the remaining 10% of their fees, and to cover a substantial portion of their living expenses. Both have generous terms, e.g. interest-free during the period of study, minimum monthly repayment of $100 for each loan. The Tuition Fee Loan can be repaid over 20 years.
19. Second, NUS and NTU are setting aside larger amounts of funds for financial assistance. NUS and NTU are increasing their allocations for financial assistance by 2-3 times. It is not true that 1 out of 10 students who applied for the NUS bursary succeed in obtaining it. The figures cited by Mr Tan Soo Khoon referred to 2003. The numbers have been going up year by year. In 2005, 4 out of 10 applicants succeeded in getting an NUS bursary. The universities will increase their financial assistance packages whenever necessary to ensure that all students who need help do obtain it. And I agree with Mr Tan Soo Khoon’s suggestion that the universities should consider seeking philanthropic donations specifically at boosting financial assistance.
20. Third, MOE is providing a new government bursary of $800 per year to help needy university students pay for their expenses during their course of study. All Singaporean undergraduates with a gross monthly per capita household income of up to $900 will be eligible to apply for this new bursary. This group represents about the lower 50 per cent income bracket of the
21. All Singaporean students with a gross monthly per capita household income of up to $900, i.e. the lower 50 per cent income bracket, would be eligible for the new MOE bursary of $800 per year. Students who are in greater need for financial assistance because of low household income or have extenuating family circumstances (e.g. those with sick family members) may be given larger bursaries funded by the universities and other sources. This is an improvement from the past.
22. With a combination of loans, bursaries and work-study assistance, we can expect that all Singaporean students from the lower 50 per cent income bracket will be able to complete their university education without any cash outlay for tuition fee and living expenses. Example of needy student 23. Let me give an example of a needy student who comes from a four-member family with gross monthly household income of $2000 and is pursuing a 4-year undergraduate course in NUS or NTU. It is estimated that he would need over $11,000 a year to pay for his tuition fees and other living expenses like books, meals and transport. Tuition fees of $6,100 plus living expenses of about $5,500 per year – we are not economising on the estimates here.
24. He would be able to obtain a Tuition Fee Loan and Study Loan to cover his full fee expenses. In addition, he would get a living allowance under the Study Loan of about $3,600. Because of his family’s income profile which corresponds to roughly the bottom 25 per cent income bracket, he would also be able to receive a bursary of about $1,500. That would leave about $400 of living expenses to be covered. He can cover this by earning something through the work-study assistance scheme. As a result of this package, he would not require any cash outlay over his entire course of study – not just for fees but also for living expenses.
25. Even for a student from the upper middle-income or high-income families, the Tuition Fee Loan of 90% of fees plus work-study assistance would allow him to meet the full costs of his fees without cash outlay from the family. Alternatively, he could use his parents’ CPF account instead of work study. Misuse of Doctorate Title 26. A/P Low Seow Chay asked about the practice of people purchasing Doctorate degrees.
27. I know it happens. There is a market, all over the world.
28. It is the practice of many reputable universities to confer honorary degrees on distinguished individuals who have made significant contributions to the university or to society. Nothing wrong with that. Our own universities set their own guidelines for the conferment of such honorary degrees and they observe these guidelines strictly.
29. A/P Low was probably thinking of other schemes where people provide donation to a university to obtain a Doctorate degree. It is not possible for MOE to monitor or curb any such transactions between individuals and the institutions in question. The market can judge, just as A/P Low has easily been able to judge.
30. But I should add that the fact that there are people obtaining overseas degrees by donating money to the institutions is probably a reflection of our society’s reverence for education and academic advancement. Better I think than obtaining knighthoods and peerages by donation. Medical Students’ Fees (answered in Q&A) 31. Dr Tan Sze Wee asked with the introduction of new fees for medical students in NUS, how much subsidy each medical student receives per year [during the five year undergraduate programme, averaging out for those 5 years].
32. Each medical undergraduate student in NUS receives an average MOE subsidy of $64,600 per year over his 5-year MBBS (Bachelor of Medicine and Bachelor of Surgery) course.
33. The Government substantially funds the costs of undergraduate medical education. Our subsidy is 3.5 times higher than what an Australian medical student would receive at say the University of Sydney. [1]The basic problems with the universities are the same across
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