FY 2008 Committee of Supply Debate 2nd Reply by Minister of State RAdm on University Education

Expanding and Enriching ’s University Sector

INTRODUCTION

1. I thank Dr , Dr , Mr , Mr Michael Palmer,

Mr Alvin , Mr , Ms and Mrs Jessie Phua for their comments and all related questions on changes in our university landscape.

2. During his National Day Rally Speech last year, PM announced a commitment to increase the number of publicly-funded university places for

Singaporeans. And by 2015, 30% of each cohort will benefit from a subsidised university education.

3. A Committee was formed to determine how best to provide the additional places and also to sketch out what Singapore’s longer term university sector landscape could be like. Before I provide an update on the preliminary recommendations of this Committee, I would like to touch briefly on the plans of the three Autonomous Universities.

OUR EXISTING UNIVERSITIES

4. These three AUs are the cornerstone of our university sector. NUS and

NTU have grown and matured over the years and today they enjoy an enviable international reputation. They were corporatised in 2006 and this has given

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them a higher degree of independence in staffing, academic and financial matters and will position them well to further grow the quality and the spectrum of their programmes to benefit their students. SMU is a young institution but has already established a distinctive niche and has delivered on its brand promise to produce graduates who are confident, resourceful and strong team players.

5. Our universities will continue to build up their quality in undergraduate education, and seek to develop new peaks of excellence. In the medium term,

NUS and NTU have indicated that they wish to maintain the size of their current undergraduate intakes, improve the quality of their undergraduate programmes especially by improving student to faculty ratios, and further develop their postgraduate and research programmes. SMU would like to expand its annual undergraduate intake gradually to about 2,000 students from about 1,500-1,600 where it is today through additional programmes, while enhancing its postgraduate education offerings and further strengthening its research capabilities.

6. Let me first address Mrs Jessie Phua’s question on student athletes in our tertiary institutions, and I will confine my response to what is happening in our AUs. First let me say that sporting achievements are taken into consideration in the discretionary admission frameworks of NUS and NTU.

SMU considers sporting achievements as part of its broad-based admissions process. And since 2000, SMU alone has admitted about 40 applicants whose exceptional performance in sports was the key factor in their admission. After admission, they compete for courses based on merit. The Deans of the various

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faculties in our universities work closely with student athletes to balance excellence in their sporting and academic pursuits. And student athletes do have some flexibility, though not as much as they would like, to adjust their academic timetables to accommodate training and competition schedules. I will say a little more about this when I come to the 4th university.

7. Mr Lim Biow Chuan asked how values are taught in the universities. Our universities recognise the need to and believe strongly in nurturing well- rounded graduates.

8. They take a holistic approach towards the inculcation of values in their students. Because they are largely dealing with adults, they encourage students to take the lead to find meaningful ways to contribute to community and voluntary organisations. This is aimed at cultivating in students a greater consciousness of service to community and country. A number of them also have the opportunity to participate in humanitarian projects outside Singapore with some support from the universities.

9. To strengthen their sense of belonging to Singapore, the universities engage the students through multiple avenues on broad trends and challenges facing the country, and encourage them to reflect on the roles they can play to help build a better Singapore.

10. Before I proceed to elaborate further on the preliminary findings of the

Committee, let me first touch on two issues that are of immediate interest to university-going students and their parents. These are firstly, the number of university places that we will be offering in the next few years, and secondly the

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recent fee increases implemented by our universities brought up by Mr Lim

Biow Chuan, Ms Sylvia Lim, and Dr Lily Neo.

PROVISION OF SUBSIDISED UNIVERSITY PLACES TILL 2010

11. In recent years, we have increased the number of places in the three autonomous universities to provide more students with a subsidised university education and we will continue to do so judiciously. I am pleased to announce that MOE has worked closely with our three publicly-funded universities, to achieve the target for 25% of each Singaporean Primary One cohort to receive a subsidised university education by 2008, ahead of the original target that was set of 2010.

12. In 2007, we increased the number of university places significantly due to the large cohort size. For 2008, our universities will provide the same number of places as for 2007 – about 14, 700. As the size of the cohort in

2008 is significantly smaller than 2007, this will enable slightly above 25% of the cohort to obtain places this year, compared to 23.5% last year. For 2009, we will provide an additional 900 places to cater to the larger cohort in that year, in order to maintain the participation rate for the cohort at 25%. Beyond this, we will scale up the number of places accordingly as we move towards the new target participation rate of 30% by 2015.

INCREASE IN UNIVERSITY FEES

13. Let me touch briefly now on university fees.

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14. Mr Lim Biow Chuan asked the Government to increase education grants to the universities so that they would not have to increase fees. He also compared our universities with Stanford and Princeton in the US which waive tuition fees and provide large grants to some students. Let me clarify why this is not an accurate comparison.

15. Princeton and Stanford are private institutions with significant endowments. It is estimated that they have endowments of more than US$15 billion each, and they charge high fees. Their student population is small, only about 5,000 to 6,000 students each. They draw some of the best students from across the United States and the world. Students in need of financial support are funded to a significant extent through proceeds from the endowment and not from the federal, state and local government. It is a noteworthy effort, but overall it only benefits a very small percentage of students from the United

States.

16. In comparison, our three universities provide a high quality education to about 25% of each student cohort. The student population in NUS and NTU number more than 20,000 each. Their endowments are small but growing slowly. Their primary source of funding is from the government, from taxpayers. Government invests heavily in our universities and provides substantial subsidies at 75% of the cost of educating each undergraduate. We have increased the amount of financial aid available to students over the years.

Approximately $120M of financial aid comprising bursaries and loans was given to students in the 2006 financial year, compared to about $81M in 2003. The

Government has recently announced that bursaries will cover up to the 66th

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percentile of households by income. For those who are outside this income group or prefer not to take up bursaries, there are other financial schemes available. And in terms of scholarships, students do have a wide range to choose from, offered by the government, the universities and many by the private sector. I think this is evident from the countless scholarship advertisements we find in our local newspapers

17. In response to Ms Lim’s question, let me say that as the major source of funding for universities, the Government monitors carefully to ensure that fees are set reasonably. We work closely with the universities on any proposed increase in fees to assess its impact on affordability.

18. Our universities are cost conscious and fiscally prudent. They are required to put in place appropriate internal controls and procedures to ensure proper accountability of their financial resources, proper budgeting and financial reporting systems, and these are all subject to regular audits including audits commissioned by the Ministry of Education. They take active cost control measures which include reducing administrative staff headcount, bulk tendering of goods and services, outsourcing non-core activities, and leveraging IT to improve productivity. The universities are incentivised to do so and they benefit directly from such measures as they can keep the surplus and use it at an appropriate time to fund new activities.

19. The largest component of universities’ expenditure, approximately 70%, goes towards manpower costs. Our universities must pay competitive wages if they are to compete effectively against global competition to attract and retain

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top quality faculty. This is necessary in order for the universities to uphold the quality of education they provide.

20. And so from time to time, tuition fees will have to be raised in accordance with the higher costs of providing a quality education. In doing so, the universities will provide students and parents with more certainty with regard to the financial outlay required for a university education. Starting from this academic year, the three autonomous universities will adopt a cohort- based fee-setting approach which means that universities will maintain a student’s fees at the level set during his or her first year of study, for the entire duration of the programme. Students who were admitted prior to 2008 will continue to pay fees set at the 2007 level.

21. Most students entering NUS and NTU in 2008 will face a one-off fee increase of 4% and this is equivalent to an additional $250 per year compared to existing students. And because their fees for subsequent years are fixed at this level, this translates into an annualised increase of 1.6% over a four-year course of study.

22. Ms Sylvia Lim mentioned law students. This is a small number of students. They will face an increase in fees of 20% over four years, which will work out to about 7.5% annually.

23. I would like to reiterate that the Government and the universities remain committed to ensuring that admission to university remains needs-blind, and that no able student will be denied a university education because of cost.

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24. Let me now move on to provide Members with more details on my

Committee’s deliberations thus far. Apart from developments in our existing universities, we have looked into how the university sector should be expanded and positioned in the long term.

EVOLUTION OF THE UNIVERSITY SECTOR TO MEET FUTURE CHALLENGES

25. The university sector has served our economy and people well. The graduates they produce are held in high regard, find gainful employment both at home and abroad and make meaningful contributions to the country both economically and socially.

26. Our economy is growing well and the demand for university graduates is expected to grow across all sectors in the years ahead. Our companies have taken up the clarion call to expand their footprint overseas and this will bring new opportunities and challenges. We need graduates who have strong academic fundamentals, yet are bold, prepared to take calculated risks and possess an entrepreneurial spirit. They must be adept at operating in new and unfamiliar environments, able to seek out and exploit new opportunities.

27. In terms of demand for university education, more students aspire to do so. As they continue to benefit from improvements we have made to the

Primary, Secondary and post-Secondary education system, more will be equipped to benefit from a university education. And hence, there is a need to grow the university sector, but carefully and judiciously, to provide more students the opportunity for a high quality, high value university education here in Singapore.

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28. With an expanded university sector, we can also afford to take in more outstanding foreign students to pursue their undergraduate and postgraduate degrees in Singapore. Some of them will remain after their studies, sink roots, contribute to our society and eventually add to our population as Citizens and

Permanent Residents.

ENHANCING ACCESS TO UNIVERSITY EDUCATION

29. To provide for an increase in target participation rate from 25% to 30% by 2015, we will need approximately 2,400 additional university places each year.

30. As Dr Amy Khor and Mr Michael Palmer have pointed out, the

Government had previously considered establishing a fourth university. The decision was eventually taken to leverage on the reputation of NUS and NTU, and expand these to meet the additional university places required to increase the participation rate then from 21% to 25%.

31. The situation then was different. First, NUS and NTU still had the capacity to expand. NTU for example did so by broadening its disciplinary coverage to become a more comprehensive university. Today, NUS and NTU are large, even by international standards. Going forward, it would be detrimental to expand the undergraduate intakes for NUS and NTU much more as we risk eroding the quality of their programmes and the experience in university for our students. SMU plans to gradually increase its undergraduate intake by about 500 but this will not be sufficient to meet the additional places required. That is the first reason.

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32. The second reason is that SMU was then a fledgling institution. Set up as an independent university, it had its own mission and governance, charted its own course and we now know that it has successfully become a well- regarded institution within a few years of its establishment. As Dr Khor has rightly observed, the experience with SMU shows that it is possible for a new university to build up its reputation, and to be accepted by the public and employers within a reasonable period of time.

33. All these factors taken together tell us, and give us confidence, that a new university will be a viable and well-received addition to our university sector. Setting up a new university that is independent of our existing universities offers the best chance of creating an institution that will develop its own unique identity, character and model of education to add real diversity in educational approaches. Doing so will also limit any dilution of management focus at NUS and NTU at a time when they are determined to move up in quality and standing.

34. With the increase in the number of university places, we can provide proportionately more polytechnic students with subsidised university places than is the case today. The number of students with good O-Level results choosing a polytechnic education has increased over the years. At present, fewer than one in six polytechnic graduates proceed to one of our Autonomous

Universities. Over time, this can improve to better than one in five.

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INCREASING DIVERSITY IN THE UNIVERSITY SECTOR

35. In providing more subsidised university places, we will also make our university landscape more diverse, providing our students with more pathways that encourage and allow more peaks of excellence to emerge.

36. To achieve this, my Committee envisages two new institutions, a new publicly funded university and a small liberal arts college that will add new options and diversity to our overall university landscape. On this note, I would like to thank Dr Amy Khor and Mr Michael Palmer for providing their views on the new university and the liberal arts college, much of which is aligned with what we are thinking about.

New University

37. First, let me provide my Committee’s preliminary recommendations on the new university. May I emphasise that these are preliminary. The

Committee considered the shape and needs of the economy in the years to come, consulted widely with industry leaders, parents and students and looked at possible models and approaches to university education in the US and

Europe. We have distilled the research and feedback to suggest some features for the new university that we believe will give it a distinctive character and position it to produce graduates who are well prepared for the challenges of the future. Rather than catering primarily to polytechnic students, the Committee envisions that the new university’s innovative approach to education would appeal to students of various educational backgrounds, including both A-level and polytechnic graduates.

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Approach

38. The new university in terms of its approach can consider adopting an integrated, inter-disciplinary approach to learning. Many universities currently have inter-disciplinary programmes that aim to bridge the divide between faculties. But for many of them, pre-existing conditions such as organisational structure and culture, budgeting and manpower allocation sometimes limit the extent of such programmes and how much they can achieve.

39. The new university will start with the advantage of not having to fight against such legacies. Instead of the traditional rigid boundaries around disciplines, its programmes can be formulated so that there is significant integration from the onset, in areas such as engineering and design or engineering and business. Graduates will have a sound fundamental knowledge of engineering, design or business, which I am giving as examples, but will also recognise and appreciate that it is at the boundaries of traditional disciplines that the most exciting learning will take place.

40. To bring greater focus to such learning and collaboration across disciplinary boundaries, the new university could set up inter-disciplinary centres focused around specific themes. For example, centres could be established focusing on future urban environments and sustainable development, bringing together students from disciplines like design and architecture, engineering and business to work together in multi-disciplinary project teams.

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41. Apart from emphasising integrated, inter-disciplinary learning, the new university could also emphasise real-world experience that would require students to apply their classroom learning in a practical context. They could compete for long-term internships each lasting about 6 months in a wide range of companies where they can be fully immersed in the working world. Through these experiences, all students will develop important skills like communication and teamwork, while also having the opportunity to gain a significant amount of working experience even before they graduate. CEOs we have spoken to have affirmed this approach as it will give companies and undergraduates an opportunity to size up each other, and would produce graduates who are more work-ready when they step into the work force.

42. Entrepreneurship should also be a key feature of the new university’s core curriculum. However, entrepreneurship is not something that is best cultivated and developed within the confines of the classroom. The new university could encourage this entrepreneurial spirit by offering students the flexibility to disrupt their studies for a year or two (and they can also offer this to other students) in order to start up their own businesses. Should they choose to, they can then come back to university at a future point in time to complete their degrees.

43. While elements of integrated learning, real world experience and entrepreneurship exist in our three Autonomous Universities, the new university could consider how to best integrate these elements and take them further.

These should be supported by high quality teaching and close interaction between students and faculty in smaller group settings.

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44. The new university could also focus less on basic research but more on solutions-directed research that aims to provide practical and effective answers to problems that industry and companies face in the near and medium term.

Disciplines

45. On the disciplines and academic programme to be offered, this will have to be studied and determined in due course by the management of the new university. But, it is worthwhile to share that we received feedback from students and parents on the areas they were most interested in and areas they felt were under-served. We also heard from different industry sectors on the areas they think could offer significant growth opportunities in the years to come. Feedback coalesced around the interplay between the fields of Design,

Engineering and Business, which is why I offered them as examples. This interplay of disciplines could include focus on areas of growth such as clean technology, sustainable building design, and tourism and hospitality.

46. It was felt that a combination of such programmes would support the new university’s integrated, inter-disciplinary approach and provide rich opportunities for learning and collaboration. For example, its Engineering students could practise design thinking and principles to help them come up with creative solutions and products that are attuned to users’ needs. They would also be well-versed in the business aspects of engineering that will help them develop strong project management and entrepreneurial skills.

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47. Such a combination of disciplines, brought together under an inter- disciplinary approach, has been successfully demonstrated in overseas institutions like Stanford University’s Institute of Design. The synergy between these three disciplines can also be seen at the industry level when we consider products such as Apple’s iPhone and iPod Touch because they combine superior design, sound engineering, and savvy marketing to create merchandise that unlocks new value and markets, and which a whole generation raves about.

48. My Committee envisions that the new university would have an eventual intake of between 2,500 and 3,000 students. It will take a few years to get the new university started, and the initial intake will have to be smaller, say at about

500 students. We believe that the new university will complement our existing universities and at the same time, inject a new approach and a fresh element of competition into the university sector.

Liberal Arts College

49. Let me now turn to the subject of a liberal arts college. What sets a top liberal arts college apart is a broad-based, multi-disciplinary education that may encompass the natural and social sciences, mathematics and humanities, and even engineering for some of them; and a small student intake of 200-300 each year whose calibre is comparable to the best in the Ivy League universities.

Their intake size allows for intense interaction among students and with faculty to create a stimulating environment. It is an attractive model of education that will offer a valuable and intellectually invigorating alternative for a small number of our brightest students, as well as draw top foreign students from the region.

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50. An independent, privately-funded liberal arts college which is the norm in the United States would, I believe, not be viable in Singapore at this point. As

Dr Amy Khor had rightly pointed out, such a liberal arts college is very costly to set up. As students and parents are not sufficiently familiar with the benefits of the liberal arts model of education, they are unlikely to pay the high fees that such a college would charge. Instead, my Committee’s preliminary recommendation is to establish Singapore’s first liberal arts college as an affiliate to one of our existing universities, similar for example to Barnard

College which is affiliated to Columbia University. As an affiliate, it will benefit from being able to leverage on the branding and resources of its parent university.

51. NUS has carried out an in-depth study and submitted a proposal to establish a “LAC” as a self-contained autonomous entity similar to the Yong

Siew Toh Conservatory or the NUS-Duke Graduate Medical School. SMU is also considering ways in which it could offer a liberal arts education to its students as it expands its disciplinary coverage. We will study these two proposals further before we make a recommendation.

52. On this topic, I would like to thank Mr Michael Palmer for his question on whether Government is prepared for radical views that could come out of a liberal arts learning environment. One of the purposes of establishing a liberal arts college is to develop future leaders who are thoughtful, with independent ideas and robust views sharpened through the cut and thrust of daily intellectual discourse. Tempered by the experience and mentorship of their

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professors, these students will be well placed to become leaders working for the betterment of society.

Public Funding for Foreign Specialised Institutions

53. In addition to the new university and the liberal arts college, we will increase the number of collaborations between our polytechnics and specialised institutions offering degrees in niche areas. This will allow more students across a wider selection of disciplines to benefit from the subsidies that the Government provides to those enrolled in these programmes.

54. In the longer term, beyond these collaborations, my Committee feels that we should also study the possibility of extending subsidies to a pre-defined number of students taking high quality degree programmes offered by other reputed institutions in Singapore including in niche areas such as the Arts. This would add more diversity to our university landscape and open up additional avenues for our students to pursue a subsidised university education.

Funding for Continuing Education and Training

55. And finally, as the Minister for Finance has mentioned in his Budget

Speech, we will co-fund working adults who are citizens and PRs seeking their first university degree through the Continuing Education and Training programmes at UniSIM and our autonomous universities. We estimate that about 8,000 adults will benefit from this scheme each year.

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CONCLUSION

56. Let me conclude. My Committee envisions that Singapore’s publicly- funded university landscape in the longer term will comprise two large universities, NUS and NTU, each offering a comprehensive suite of high quality undergraduate programmes and with a strong focus on postgraduate education and research. We will have two mid-sized universities, SMU and the new university, each offering a focused selection of degree programmes. There will be a number of quality institutions offering degree programmes in niche areas either independently or in collaboration with the polytechnics. And part-time degree-level CET programmes offered through local universities to provide working adults with an opportunity to obtain a subsidised education at the tertiary level on a part-time basis.

57. The increase in university participation and proposed additions to this sector will require a corresponding increase in funding for the higher education sector. And I hope you will all support this in due course.

58. Based on current estimates, it is projected that the expansion of the university sector will require an increase in the annual university sector budget and MOE’s budget of up to 0.2% of GDP.

59. With these changes and new elements, I am confident that Singapore’s university sector will be well-positioned to serve both the needs of our economy and the aspirations of our young people in the years to come.

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