FY 2008 Committee of Supply Debate 2nd Reply by Minister of State RAdm Lui Tuck Yew on University Education Expanding and Enriching Singapore’s University Sector INTRODUCTION 1. I thank Dr Lily Neo, Dr Amy Khor, Mr Teo Ser Luck, Mr Michael Palmer, Mr Alvin Yeo, Mr Lim Biow Chuan, Ms Sylvia Lim 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 1 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 2 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 3 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. 4 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 5 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 6 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.