Inflation, Tuition Hikes, and Foreign Scholars – Are Singaporeans Getting Cheated?

Once again, tuition fees for Singapore’s universities have increased. But should that really surprise anyone? After all, we do live in the world’s most expensive city, although some suggest that Singapore is only expensive if you’re an expat. Semantics aside, no one can dispute this cold hard fact – prices on almost everything rise every year or two, due to inflation.

According to a recent Channel News Asia (CNA) article, inflation is a major reason why tuition fees were raised as high as 7.9%. That’s no small increase, especially if you’re a working-class student trying to manage your finances.

So it’s only natural to feel… a little agitated when you hear that the Ministry of Education (MOE) is paying millions of dollars in tuition fees to foreign scholars. You might even feel cheated right?

Are Singaporeans really getting cheated? Make your own conclusion from the following details:

Tuition Has Increased Regularly Since 2008

Tuition hikes in Singapore are unpopular, but consistent – kind of like a certain ex-US president we all know (the one whose last name is synonymous with “shrubbery”). How consistent you might ask? Well, that depends on your program of study, but you can expect tuition to increase by 2% to 7% annually.

But things could always be worse. You could have lived through the massive tuition increase that occurred in 1989 when the National University of Singapore (NUS) and Nanyang Technological University (NTU – formerly NTI) raised fees by as much as 85%!

To put rising tuition fees into perspective, let’s look at how much tuition full-time engineering students at NUS had to pay from 2008/2009-2014/2015:

As you can see from the example above, tuition rates for Singapore Citizens taking the MOE subsidy have risen by about 23.4% since 2008. Meanwhile, tuition for international students taking the MOE subsidy has increased by 64.6% during the same period.

In fact, foreign scholars taking the MOE subsidy pay twice the tuition fees that Singapore citizens taking the MOE subsidy must pay. Of course, this is only a snapshot of one course of study. Tuition fees will vary by university and program of study.

Scholarships and Grants for Foreigners Cost Hundreds of Millions of Dollars Annually

The subject of scholarships to international students, especially the ASEAN Scholarships offered by MOE, has become a hot-button issue among Singaporeans. Why? Because some believe that the government is paying too exorbitant a cost for foreigners to come here and study.

Just how much is being spent? According to a 2012 parliamentary reply by the Minister for Education, here is how much is being spent on foreign scholars annually:

• Pre-Tertiary Scholarships: $14,000 per year for 150 scholars, which equates to $2.1 million dollars.
• Undergraduate Scholarships: $18,000-$25,000 per year for 170 scholars, which equates to $3.1 to 4.3 million.

That’s at least $5.2 million per year. But that’s only a small percentage of the total amount MOE pays in foreign student tuition.

According to a recent parliamentary reply by the Minister for Education, MOE is spending $210 million dollars on tuition grants for international students attending Singapore’s polytechnics and universities.

That number makes sense considering that the MOE tuition grant is available to every international student who gets accepted into any of Singapore’s tertiary institutions. In fact, international students make up about 35% of the total student population at NUS according to its 2013 annual report.

So what’s the price that international students must pay for accepting the MOE tuition grant?

They must work for a Singapore-registered company for three years. Unless they’re studying to be doctors or dentists, in which case they’ll serve a bond with the Ministry of Health (MOH) for five to six years.

Are Singaporeans Being Cheated?

As to whether Singaporeans being cheated, it’s really a matter of perspective. For example, a citizen in the NUS engineering program who’s paying MOE subsidized tuition ($7,850) will pay half as much as an international student paying MOE subsidized tuition will ($15,700).

However, a citizen who’s paying full tuition ($36,650) will pay 2.3X more than an international student paying MOE subsidized tuition fees ($15,000). In cases like this, it’s easy to see why some Singaporeans might feel cheated.

But tuition is only one side of the coin. Then other side involves graduates who “take the money and run” after working in Singapore for three years.

This is something that angers many Singaporeans for several reasons:

• Wham Bam, Thank You Ma’am: Many Singaporeans believe that foreign scholars simply take advantage of MOE’s generosity and leave after their three years are up, meaning any economic “contribution” is lost after the foreigner leaves.
• More Competition: The competitive job atmosphere in Singapore becomes even more cutthroat as locals not only have to fight against international professionals, but foreign scholars as well.
• Little Integration: There’s no substantive data on how many foreign scholars continue to “contribute” to Singapore’s economy past their mandatory three years by becoming PRs or citizens.
• Take Up University Slots: Many Singaporeans believe that slots for international students should be scaled back so that more locals can attend local tertiary institutions. It makes sense when you consider that a majority of Singaporeans will contribute to the nation’s economy throughout their lifetime, while a foreign scholar might not.

If you agree with the Minister for Education’s reasoning for distributing MOE grants to international students, you might say “our $60K-$100K+ investment in each foreign graduate is returned to the Singapore economy.” You might also be right in some cases where talented graduates have boosted the productivity, earnings, and overall success of Singapore companies.

Of course, it’s up to you to draw your own conclusion. Do you think you’re being cheated?

Final Note: Remember, inflation doesn’t just make the universities increase their tuition fees. It makes the price of everything (food, housing, transportation) increase. If you’re or someone you know needs some non-Ah Long financial help to cover tuition or living expenses, visit SmartLoans.

What’s your opinion on the issue of rising tuition fees and grants/scholarships for international students? Are Singaporeans are being cheated? Tell us what you really think on Facebook! To find even more useful information on everything personal finance, visit MoneySmart today!

Images:

Choo Yut Shing