Trend for Average Annual Government Spending on Foreign Students over Past 10 Years

Mr Speaker, Sir, given the Member's considerable interest in Government spending on international students, I will give a more comprehensive reply today and I will make three points.

The first point is that the core objective of our education system is to serve the needs of Singaporeans and no Singaporean is ever displaced from an Institute of Higher Learning (IHL) because of an international student. This is because we plan the number of IHL places with Singaporean students in mind. Each IHL sets standards for admission. This ensures that students can cope with the rigour of the curriculum, the IHL continues to be held in high regard, both locally and internationally and students are valued by employers upon graduation and they can secure jobs. When all Singaporean students who meet the standards have been admitted, the IHLs then raise the bar by a few notches and then admit a small minority of international students, over and above the local students. Because of this method, no Singaporean student is ever displaced from an IHL because of an international student.

The second point I want to make is that the education budget – about $13 billion every year – is overwhelmingly spent on local students, to make education affordable. Beyond the heavy Government subsidies available to all Singaporean students, there is also financial aid, in the form of assistance and bursaries, to ensure that fees remain affordable for lower to middle income families.

To answer the Member's question, such financial aid is for Singapore Citizens only. The Member also asked for the trend of annual Government spending on international students in terms of scholarships and tuition grants. This has fallen by about 50% over the last 10 years.

MOE recently stated in a reply to a written question by the Member that the total Government spending on scholarships for international students in our schools and Universities comes up to around 1% of our annual education budget, or $130 million a year. Unfortunately, immediately after we issued the written reply, I see online reports with a fabricated and inflated number of over $300 million.

The real cost, actually, is well below $130 million per year, because $130 million is the worth of the scholarships to the students, not the cost to the education system as a whole. Let me use an analogy. Let us say a restaurant gives a $100 voucher to a customer. The voucher is worth $100 to the customer, but the incremental cost to the restaurant to fulfil the voucher can be much less. Why? Because the cost of rental, utilities, service staff, management and so on, are more or less fixed already, whether the customer turns up with the voucher or not. The same logic applies to our Universities.

You imagine, if tomorrow we send back all our international students on scholarships, how much of our education budget do we save? I think it would be much less than $130 million, because that is the worth of the scholarships to the international students, not the expenditure incurred by the system. Overhead costs such as the buildings, the laboratories, the equipment, the management, manpower, faculty will still need to be incurred anyway.

Instead, if we send back all our international students, what we will lose, are the opportunities for Singaporean students to build bonds and bridges with students from other countries and expand their network of friends. This is an increasingly important aspect of education because we are all working in a globalised, multi-cultural world.

We will also lose a catchment of people who can contribute to Singapore, potentially. Today, international students in IHLs who are awarded scholarships are required to work in Singapore for at least three years after they graduate. Many eventually sink roots, take up Permanent Residency or citizenship and raise their families here. Even if they decide to leave Singapore after fulfilling their obligations, they can be part of our valuable global network of fans and friends, who can speak up for Singapore from time to time and forge collaborations with Singapore.

The third point I want to make is that because of the reasons above, every reputable IHL all around the world admits international students and provides them with some form of financial support. The best universities around the world – Oxford, Yale, Ecole Polytechnique, Technical University of Munich and so on – all have a diverse and international student body, far more than our IHLs in fact. In fact, there are top US universities like Yale, MIT, Princeton, who have needs-blind admission system. So, they do not admit you based on whether you can pay; so long as you meet their standards, you are admitted. If you cannot pay, there will be some form of donations, financial assistance to help you pay. Singaporeans students must have entered those schools on that basis before as well.

Because of that, Singaporeans studying overseas benefit from subsidised fees or scholarships from overseas universities as well. In fact, many European universities offer free or heavily subsidised education to all foreign students. There are around 400 Singaporean students currently studying in French and German universities and they benefit from highly subsidised tuition fees there. So, we give some and we also take some. And our IHLs cannot depart from this international practice norm and has to be part of this global education network.

I thank the Minister for his comprehensive reply. I just have a few supplementary questions. Firstly, the Minister clarified that the figure given for scholarships is, so to speak, if I can use a phrase, "a nominal figure" and it does not reflect the actual costs. I appreciate that response for the $130 million for scholarships. I would like to ask, what would be the nominal figure for tuition grants, that was also asked or implied in my first question – written question – so I would like to ask that. I do appreciate that, that is also likewise, probably going to be a nominal figure for the reasons that the Minister shared. So, that is my first question.

My second question is relating to comparisons with other countries. In the original Parliamentary Question reply last month and also as the Minister has clarified, there is some element of reciprocity, so Singaporeans students also benefit from aid. I think some of the cases, the Minister cited are aid given by universities rather than aid given by governments and states. Some of the universities that the Minister mentioned have large endowments and they provide funding to international students who need it, including Singaporean students. So, given this point of reciprocity and being part of the network, can I ask if the Ministry tracks or does the Ministry knows, what is the comparable amount of governmental spending that other developed countries actually provide to foreign students studying in their countries proportionately as a percentage of their education budget. Is that something that is looked at? So, that is my second supplementary question.

The third and last one, is really on how the impact of Singapore is measured. Does the Ministry actually look at, over time, the impact of the spending on foreign students and what are, for example, economic multipliers from retaining high quality foreigners to work in the workforce vis-a-vis an alternative such as recruiting foreigners on the open market to come and work here, without making that spending on foreign students in the education system. Thank you.

Three questions. On the tuition grant, just to let Members know, there are scholarships that we give to foreign students who are very talented and we want them to be part of our system and they have an obligation to work here. But, there are other students who are not Singaporeans, studying in our system and they may apply for tuition grants. So, we can accord them a tuition grant, but bear in mind, Singaporeans pay around 25% of the total costs of a University place. Even after tuition grant, a foreigner, will still pay about twice the amount of a Singaporean.

The Member asked for the amount spent on tuition grant. So, scholarship is $130 million, tuition grant will be about – the total, will come up to be about $238 million. So, another $108 million for tuition grant. As the Member has also pointed out, this is the nominal figure. This is the worth of the scholarships and tuition grants to the foreign students but does not reflect the cost to our education system.

The second question, the aid given by universities in other countries is from the universities, whereas for us, it is from the Government. Because, our situation is a bit different. They have state universities, they also have private universities. In our case, all our Autonomous Universities are all Government run. Therefore, the circumstances are different; ours is a much more public and centralised system.

As for whether we have numbers on how much other governments spend on foreign students, I am afraid I do not have that number. But, there is no doubt that all systems around the world use their universities to attract talent all over the world. Singapore students are also targeted. There is a fight for talent in the whole world. I think we cannot run away from that.

Has there been any study on impact of spending on foreign students? I would very much welcome the academia or our economists, please do a learned study. But, we know this has been beneficial to Singapore. Do it in the right proportion, do not overdo it, do not under-do it. Because, first, our Singapore students benefit from interacting and making friends, from foreign students, building bridges, building bonds and friendships with them. We do know, many of us, many of the colleagues we work with, actually might have come to Singapore to study at a fairly young age, sometimes on scholarships, and over time, they sink roots here, have children here, and the children serve National Service. Today, they contribute to Singapore. We see so many of these cases around us.

I recently came across an entrepreneur, a successful one from People's Republic of China. He was a foreigner thinking of doing a start-up. Then decided to go into it with a good friend, and the partner in turn has another friend, a lady, and both of them were PRCs and had studied in Singapore in Secondary school. He ended up marrying the girl. After that, the partner and the wife said that, "We studied in Singapore, it is a wonderful place, how about you start your business in Singapore?" Therefore, that was what he did. Today, his company is a unicorn that hires a thousand people, and all three of them are now Singaporeans and have sunk roots here.

So, I welcome any studies to measure the costs and benefits, but the benefits are clear, but do it in the right proportion.

Given the Member's strong interest in this subject, if I may ask back a question, may I know what is the Member's or the Member's party's position with regard to international students in our schools and our Universities. Do you advocate a zero international student policy?

I thank the hon Minister for his question. I can only speak on my personal view on this and my view would be that a certain amount of spending is certainly justified and that spending has to be calibrated based on the benefits that we receive back. That was the point of my question, to understand what that spending is.

If I recall correctly, there was one incident when the Speaker talked about a quote from former Vice President, Joe Biden, who said that, our spending is a reflection of our priorities. So, what we say about our policy goals and objectives is one thing, but our spending really concretely reflects that. So, my question was really understanding what is that spending and whether it is calibrated and whether it is the right balance point. I think, basically, every society has to find the right balance point on a question like "How much are you providing in spending for foreign students versus local students?" Now that the Ministry has provided this figure, which is nominally about $230 million, I think that comes to about 1.8% of MOE's budget, which is maybe about 0.3% of the total national Budget. Is that too high or too low? To me, it seems on the high side. But I do keep an open mind because I think if the Government can provide reasons that this practice generates, for example, economic multipliers, that we attract foreigners to stay here who would not otherwise come. If there is data on what other governments are doing, if the spending is comparable on the part of other governments so that there is reciprocity – we are doing our part as good global citizens – I would certainly keep an open mind to say that that figure and the balance point are the right ones.

I would just like to know what is the Minister's view on the prospects of converting more of these foreign students to net-fee payers because I think we can all agree that there is going to be a pool of international talent we need to compete for and we need to give them some inducement to come. But there could be other students out there who might be more than willing to come, who can afford to be net-fee payers. This is, in fact, something that a lot of universities in the UK, the US and Australia depend on – a large volume of foreign students who are net-fee payers and who, in fact, subsidise the local students. That is the situation in some other countries.

I thank the Member for that suggestion. Today, some of the students are already net-fee payers. So, although they come and attend our universities, they receive no tuition grant nor scholarship. In fact, the process is that if you apply to enter the University, you must meet the standard, which is a higher one than locals and, after you are accepted, you can then apply for a tuition grant. And some students choose not to apply for a tuition grant and they do become net-fee payers, and I think this is something we ought to discuss with the Universities.