Parliamentary Speech - Government-run Student Loan Program

The Government has frequently highlighted the importance of continuing education for all Singaporeans, to upgrade their skills and increase their productivity and employability. It also provides financial assistance to needy Singapore Citizens until Junior College (or Centralised Institute) level. This is commendable. However, in this day and age, more and more employers demand education levels beyond Junior College level. Technical qualifications are also critical.

Currently, the Government provides some relief by allowing Singaporeans to use their CPF savings from their Ordinary Account to pay for their children’s or their own tuition fees. However, only full time subsidized courses at approved education institutions are included under this scheme.

For example, institutions like the BCA conduct many useful, practical courses. However, those who are not employed or who are self-employed may not obtain a subsidy or have a sponsor for their course fees. This is particularly so if they wish to switch industries and pick up new skills.

If they do not have the means to pay course fees, they must turn to commercial banks. But it is not easy to secure student loans from commercial banks. There are strict eligibility requirements. It only applies to certain designated partner institutions, there are minimum income requirements and some applicants must furnish guarantors.

For example, to be eligible for a study loan from Citibank, either the applicant or his/her guarantor must earn at least S$30,000 per annum. Even the POSB Further Study Assist loan, which has lower income requirements (applicant or guarantor must earn a minimum gross annual income of S$12,000 or S$18,000 respectively), is not applicable to all.

Furthermore, repayment terms of commercial banks are not friendly. In some cases, payment kicks in after drawdown, interest rates are high and the repayment period is strict.

Could the Minister look into the possibility of establishing a government-run student loan program to help Singaporeans of all ages improve themselves? This would be in line with the Government’s vision of a Learning Nation – a social environment that promotes lifelong learning in our people.

The downsides are limited. Frivolous cases can easily be detected and rejected and most recipients will likely pay back the loan. The upsides are however, unlimited. A better educated and trained Singaporean will be an asset to his employer and the country, and will return the investment many times over. The institution of such a facility will also be a clear message to all Singaporeans of the Government’s commitment to life-long earning, and that its determination to help Singaporeans to achieve their highest potential.