Nubeals Reports

SINGAPORE: The Student Financial Aid Unit (SFAU) at the National University of Singapore (NUS) yesterday released the financial aid application results for the next academic year, 2008-2009. The deadline for application was April 14 and SFAU announced the results after taking six weeks to evaluate the ‘need’ of the applicants. The financial aid website makes this commitment:

“NUS is committed to a needs-blind merit-based admission policy that ensures no deserving student admitted to the University is denied an education because of financial difficulty.”

This in-depth report aims to establish how committed NUS is about removing its students’ financial difficulties.

NUS offers a wide range of financial assistance schemes through SFAU, Development Bank of Singapore (DBS) and Overseas Chinese Bank Corporation (OCBC). The loan that covers tuition fees is administered by DBS and OCBC, while the sources for the other schemes are donations from NUS alumni and sundry.

The major chunk (70-90%) of the tuition fees can be covered by the Ministry of Education (MOE) Tuition Grant that is available to nearly all undergraduates. The full tuition fee varies on various factors; whether you are a Singaporean, a Singaporean Permanent Resident (PR) or an international student; whether the course you study is lab-based or not; and it also depends on the faculty you enroll in.

For example, the fee for international students in the Faculty of Engineering (FoE) who matriculated in the academic year 2006-2007 is S$22,420*, academic year 2007-2008 is S$29,120, and academic year 2008-2009 is S$31,940. The tuition fee is fixed for the tenure of the student’s degree program.

To give a real depiction of what financial aid at NUS can be like, and repayment of loans, we picked the financial aid package being received by an international student who matriculated in the Faculty of Arts and Social Sciences (FASS) in the academic year 2006-2007.

The student’s full tuition fee payable for one whole year (covering two semesters) is S$20,420. This amount is covered by the following schemes:

• MOE Tuition Grant** covers S$13,700 every year (about 70% covered)
• Tuition Fee Loan worth S$2,749.50 per semester comes to S$5,499 a year (about 25% covered)
• NUS Study Loan covers S$305.50 of the remaining tuition fee per semester that amounts to S$611 (about 2% covered).
• NUS Study Loan also gives ‘living allowance’ worth $3,600 every year (S$1,800 per semester). Though not stated clearly, the living expense amount is often used to offset any remaining tuition fee, which, in this case is S$915.50 for the entire academic year (about 3% covered and no tuition fee balance left). The student lived at Prince George’s Park Residences (PGPR) in a Type B room past year and the total fee for two semesters amounted to S$2,678.50 last year, which was settled using the S$1,800 living allowance, leaving the student with S$6. (Had the student chosen to live in a Type C room he would have been left with around S$200 or more for food and other living expenses.)

To provide further support, the student was also offered the following schemes based on the needs-assessment by the SFAU:

• Bursary worth S$1,200 was awarded that is not a loan and doesn’t need to be paid back.
• Subsistence Loan worth $2,200 was awarded that is ready cash transferred to the student’s bank account once a year to supplement living costs and sundry.
• Work-Study Assitance Scheme that enables students to supplement their finances through part-time work on-campus and helps students minimize their debts servicing burden upon graduation. (They receive a “priority consideration” letter from the school to show to prospective employers.)

The student is also in receipt of the Notebook Ownership Scheme, which is an interest-free loan administered by DBS or OCBC of up to a maximum of S$2,000 to purchase a computer notebook from the NUS Global Campus Notebook Tender. The student’s outstanding for this scheme is S$1,972.90.

When we asked the student if he had seriously considered paying off all those loans, the student replied with a levant ‘no’. “I am just focusing all my energy on graduating at the moment. Loan payments will come in later once I graduate and find a job,” he said.

So we sat down with the student and took out the terms and conditions of all his loans to enable him and others to see what kind of payments will need to be made once he starts working. The total outstanding loans (assuming that he receives/received the same package every year) for a four year course would be S$47,640. Adding in the Notebook loan brings the total amount payable to S$49,612.90.

Paying off the MOE bond is easy as long as you can manage to find a job and work in Singapore for three years. There is no payment required.

For the Tuition Fee Loan (total S$21,996) and NUS Study Loan (total S$16,844), interest computation is deffered until after graduation after which the average prime rate of DBS, OCBC and UOB applies. Minimum repayment is S$100 per loan per month to start with and maximum tenure for repayment is 20 years. At S$100 a month each, both loans could be paid off well before 240 months if there was no interest. But we must calculate interest to have a fair idea of what he will be paying off in the future. For this purpose we shall assume a prime rate of 5% and a variable rate of 7.00% (Prime Rate + 2.00%).

Given the real term of the Tuition Fee Loan, which is 20 years, the average monthly payment would be S$170.53 . The number of payments would be 240 for a total payment of S$40,928.34, of which S$18,932.34 is the interest on the loan. The cost of interest and fees per dollar borrowed is S$0.86 . The APR for this loan is 7.00%.

The average monthly payment for the NUS Study Loan would be S$130.59 . The number of payments would be 240 for a total payment of S$31,341.92 , of which S$14,497.92 is the interest on the loan. The cost of interest and fees per dollar borrowed is again $0.86. The APR for this loan is also 7.00%.

For the Subsistence Loan, it is interest-free but the repayment period varies from 3 to 5 years. For a total of S$8,800 for four years to be paid off in 5 years, the minimum repayment is about S$150 per month.

You get 30 months to repay the Notebook loan, which is also interest-free. The S$1,972.90 amount can come to a monthly payment of S$65 and you can be done with the loan in two and a half years.

We spoke to several students receiving maximum financial aid about making payments of more than S$500 every month at some point after graduation and they were shocked. We also mentioned that they may need to make Central Provident Fund (CPF) contributions as well if they take PR in Singapore. We were surprised to find out that most students didn’t realize the kinds of legal obligations they get themselves into when they accept a financial aid offer. When we asked them to share their feelings, they were skeptical about sharing their identity with us.

A student who wished to remain anonymous said, “I come from a poor family and (we) don’t have the kind of money to be able to afford an interest of S$35,000. My mother saves every penny that she can.”

Another student who also wished to remain anonymous thought that the financial schemes offered by NUS were fair and that the interest dollars were “just a token to pay for an excellent career opportunity”.

“I think the bursary is brilliant. I got S$1,500 and it will solve all my problems,” he said. We asked him to share what kind of problems he was facing and he said he needed to buy a camera so that he could join Co-Curricular Activities (CCA) to get CCA points that are used to allocate on-campus housing.

Most of the students were unaware that the bursaries were collected from organizations such as Great Eastern and were matched dollar for dollar by MOE.

There is no doubt that the financial aid schemes offered by NUS are among the best in the world to the point of covering not only every cent of the tuition fee but also accommodation and other living expenses. The SFAU has a great responsibility in ensuring that the aid goes to the people who really need it.

Some students complained about untimely disbursement of the funds because they often face a lot of problems in the beginning of the first semester. Most people in receipt of financial aid live hand to mouth but they also need to understand that processing so many forms and so much money takes time. Perhaps SFAU can work with students to place a priority to disburse funds to students who need them more urgently.

*All figures are quoted in Singapore dollars (SGD).
**Required to sign a 3-year bond to work at a Singapore-listed company in Singapore upon graduation. Bond duration may vary from student to student.