Chan Chun Sing: 2.6% of student loans under MOE Tuition Grant Scheme in arrears over 3 months

In a recent parliamentary inquiry, Workers Party Member of Parliament for Sengkang GRC, Ms He Ting Ru, raised critical questions concerning the financial burden of higher education on students.

On Tuesday, Ms He requested detailed information from the Minister for Education regarding the status of student loans under the Ministry of Education (MOE) Tuition Grant Scheme over the past decade.

Specifically, Ms He asked for data in each year of the last ten years on:

(a) how many full-time students in diploma or undergraduate courses in the Institutes of Higher Learning have taken up study loans under the MOE Tuition Grant Scheme;
(b) the average interest rate these students are being charged to service their loans;
(c) how many students are in arrears; and
(d) what assistance has been rendered to those in arrears.

In his written response, Education Minister Mr. Chan Chun Sing provided average annual data, diverging from Ms. He’s request for year-by-year details.

He revealed that approximately 18,800 undergraduate students and 2,300 diploma students annually have availed themselves of government loans to fund their tertiary education. This represents about 30% of undergraduate students and 3% of diploma students in Singapore’s publicly-funded institutions.

Mr. Chan highlighted a notable aspect of these loans: their interest-free status while the student is still in school, with interest commencing upon graduation or upon the student leaving the institution.

“The interest rate for existing loans is pegged to the average prime lending rate of DBS, OCBC, and UOB and is currently 4.75% per annum,” said Mr Chan.

He shared that, as of September 2023, about 500 loans, or 2.6% of the total number of loans due for repayment, were reported to be in arrears for three months or more.

Minister Chan assured that students facing difficulties in repaying their loans could appeal for a deferment of loan repayment. The Ministry of Education assesses such appeals on a case-by-case basis, aiming to provide necessary assistance to those in arrears.