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MOE said only 1% of foreigners ‘intentionally’ defaulted study loan repayment – but how many ‘unintentionally’?

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In a statement issued yesterday, Workers’ Party took the Ministry of Education (among other Ministries) to task, and charged that more than half of the scholars selected by the AGO for test-checks failed to fulfil their scholarship obligations to Singapore. It was referring to the lapses in the Ministry of Education (MOE) highlighted in the AGO report.

MOE responded to WP late last night in their Facebook and said that WP’s claims were incorrect. It said:

“The “half” that AGO flagged out were for delays in sending them letters of reminders to update their status. They are not in default. Over the last three years, 1% of such foreign students had intentionally defaulted and MOE is taking action to recover the liquidated damage and impose penalties on them. There have been delays in sending them the letters because most of the cases that AGO flagged out were from earlier graduation batches, before the enhanced measures were fully implemented.”

WP had also flagged the $511.49 million of tuition fee loans and study loans given out to students of institutes of higher learning and are outstanding as at 30 June 2015, in its statement. Responding to this, MOE said that “it Is natural for loans, especially those of a long repayment period, to be outstanding.”

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MOE’s statement did not address two other important points related to the Ministry in WP’s statement.

  1. “In 2010, the AGO flagged out the formula used to calculate fees payable to the banks for perversely incentivizing the banks not to reduce outstanding loans. MOE said that it would review the formula and provided targets to do so each time the AGO followed up since 2010. But the review has still not been completed as at March 2016.”
  2. “Another worrying trend is the pattern of lapses in procurement, tender, and giving preferential access to a Related Party across several institutions. The AGO found lapses at the Institute of Southeast Asian Studies (ISEAS) in 2012, Ngee Ann Polytechnic and Republic Polytechnic in 2013, and now Nanyang Polytechnic too.”

MOE further clarified that only 1.4 percent of graduates have defaulted in loan repayment and so the monies may be unrecoverable. The vast majority of graduates it said, “service their loans and make regular repayments.”

Although the Ministry did highlight that 1 percent of foreign students intentionally defaulted loan repayment, the statement did not give any indication about the percentage of foreign students who unintentionally defaulted the repayment of such loans.

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