Scholarship bond defaulters and the betrayal of our youth

Last week, former NTUC CEO Tan Kin Lian shared his experience with a foreign student who was given a scholarship at a local Polytechnic:

According to Mr. Tan, the foreign student in question was unable to find a job due to the minimum salary and levy imposed by the S-pass scheme. Given that no employer was willing to pay $2,600 for a fresh polytechnic graduate, she was unable to find a job and returned to her home country, implying that she had not served her bond.

$50,000 wasted?In a 2012 Parliamentary response, Sim Ann replied that each pre-tertiary student costs an average of $14,000. However, such tuition costs seem to have increased with fees costing $9,213 a year excluding additional allowances for accommodation and spending. Adjusted for inflation, this could mean $50,000 in taxpayer's monies could have been wasted in this instance.

Leaving for greener pastures?Foreign students here on scholarship leaving for greener pastures is not an unheard of phenomenon. Last year, former PRC scholars Leo Chen and Steven Liu became amongst China's youngest Billionaires after the online cosmetics retailer they founded – Jumei – was successfully listed on the NYSE. The pair had picked up computing skills during their stint at NTU but left to Stanford to pursue further education.At what cost to Singapore?While there are no statistics available on foreign scholars who have decided to break their bond, Acting Minister for Education Ong Ye Kung said in Parliament in March that "more than" eight in ten foreign scholarship recipients have either served their bonds or applied for deferment and that defaulters will be dealt with harshly.

However, official statistics seems to present a different picture as to what dealt with harshly meant. An AGO audit report earlier this year revealed that there were 16 out of 30 cases reviewed during the audit where there was no prompt action taken towards scholars who have failed to serve their bond.The report was also revealed that 1.4% of loans were deemed to be unrecoverable of the $511 million outstanding. While there was no clear indication on why such loans were unrecoverable, such loans are likely to be inclined towards foreign scholars who have left. In other words, as much as $7 million could have been lost on such cases.

What about Singaporeans?Earlier in May, political commentator Leong Sze Hian calculated that as much as 43% of the spaces our local universities could have been occupied by foreigners. This is based on an official statistic of 34% (Times Higher Education) and an assumed 13.5% of the "local" population being PRs.

Besides the numbers, the costs and social impact to middle-class families are also quite telling. In a 2008 Parliamentary session, it was revealed by then Minister of Education Dr Ng Eng Hen that approximately a third of the Singaporean undergraduate cohorts took a study loan to fund their education with the an average debt of $20,000.From a labour market perspective, the number of S-pass holders has increased by 56% in the last 5 years or so from 113,900 in December 2011 to 178,600 in December 2015. Given the costs to employer, it is interesting to see how the wages for semi-skilled Singaporean workers will be affected.

Tan Kheng-Liang

*The author is part of the editorial team @TRE but the views given here are part of his own

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