Foreign student defaulters face work and residency ban

Foreign students who received generous scholarships from the

Singapore government could be banned from living and working in

Singapore if they deliberately default on their ‘bond’ obligations, a

senior education ministry official said this week in the wake of

revelations that a number of students were in default.

The latest report of Singapore’s Auditor-General released late last

month showed some 27 foreign students who benefited from

scholarships to study at Singapore’s two top universities had

defaulted on Ministry of Education loans.

According to the auditors’ report, unpaid loans by former foreign

students at Singapore’s main universities, National University of

Singapore or NUS and Nanyang Technological University or NTU –

which both rank highly in Asian university rankings – amounted to

around SG$228.04 million (US$170 million) to 30 June 2015.

The total default by foreign students from all institutions in

Singapore amounted to SG$511.49 million (US$380 million), the

auditors’ report said.

Bond conditions can vary according to the kind of scholarship, but

foreign students receiving Ministry of Education tuition grants must in

addition work for a Singapore-registered company for three years

“immediately upon graduation”.

Medicine and dentistry graduates receiving scholarships are ‘bonded’

to work for the Singapore’s Ministry of Health for six and five years

respectively.

The ministry’s Parliamentary Secretary for Education Low Yen Ling

told parliament on Monday in response to a parliamentary question

that the proportion of defaulters was low – around 1%.

“We are also in the process of contacting another 4% to determine

their bond service status. The rest – 95% – service their bonds, have

applied for deferment or are unable to serve their bonds due to

reasons like illnesses,” she said.

For defaulting students “who continue to not serve their bond

obligations” universities will proceed to recover the value of the

scholarship plus damages from students and their guarantors, she

said, “failing which, defaulters will not be able to work or reside in

Singapore”.

Bond terms

Around 16% of higher education students in Singapore are from

overseas but for science and engineering subjects at universities such

as NUS and NTU the proportion is closer to 25%, according to official

figures.

The report said the Auditor-General’s office had found the Ministry of

Education “did not maintain adequate oversight ” of NUS and NTU to

ensure recipients who failed to serve their bonds “were reminded of

their scholarship obligation” or impose damages to liquidate the bond

“where warranted”.

Instead the universities relied on the administering banks to recover

outstanding loans and they submitted lists of proposed loans to be

written off to the Ministry of Education “after recovery efforts had

been fully exhausted”, the auditors’ report said.

The report did not say which countries defaulting students were from.

However, the majority of scholarships disbursed to foreign students by

the Singaporean government are to students from ASEAN –

Association of Southeast Asian Nations – countries, which include

Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines,

Thailand and Vietnam, as well as to students from India and China.
​A recent report by the bank, HSBC , found that Singapore ranked

alongside Australia, the United States and United Kingdom as one of

the most expensive countries globally for foreign students to obtain

an undergraduate degree once the high cost of living in the city state

is taken into account.

But Acting Education Minister Ong Ye Kung told parliament on 15

August that the rate of default on student loans was not high,

pointing to student loan default figures of “about 40%” for the UK

and 10-20% for the US. Foreign student access to such loans is

“deliberately made easy to help as many students as possible”, he said.

“This was never meant to be a commercial operation, but part of our

policy to help students with their education, and it also serves a social

objective,” he said.

The Ministry of Education had said in an earlier statement in response

to the auditors’ report that it “will continue to work closely with all

the universities to tighten and enhance the processes in monitoring

and enforcing the scholarship bonds”.