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Education and excellence through a fairer Tuition Grant program

Posted by theonlinecitizen on September 13, 2007

By Pin-Quan Ng

In his National Day Rally address, our prime minister suggested the possibility of developing a fourth public university to meet the increasing demand for university education, perhaps in response to the recent controversy over the number of foreign students admitted to our local universities, and its underlying sentiments that Singaporeans are being treated like second-class citizens when it comes to university admissions.

A new university is a necessary but insufficient measure to address these concerns, as current university tuition subsidies are both unfair to citizens and harmful to the long-term competitiveness of our education industry, and must be reformed even if a new university is introduced.

Through the MOE Tuition Grant program, the Singapore taxpayer subsidizes up to 75% of undergraduate tuition fees at NUS, NTU, and SMU (our ‘flagship’ universities), as well as polytechnic diploma and degree programs.

Almost all of these subsidies are available to foreign students, conditional on their working in Singapore for 3 years post-graduation. Enforceability issues aside, it is no surprise that most foreign students at these schools do not pay full fees, as someone considering studying in Singapore is also likely to be considering working here. Yet the same benefit is not extended to the taxpayer himself, if he chooses to pursue his degree at any other local institutions, like SIM, SIC and MDIS, or overseas in Australia, the UK and the US. This is surely counterproductive to PM Lee’s declared aim of providing more educational opportunities for our citizens.

Some argue that since only wealthy Singaporeans choose to study elsewhere without a government scholarship, this is a non-issue. This is untrue. As PM Lee noted, more Singaporeans are qualifying for university, but the increase in demand for tertiary education has outpaced the growth in the supply of seats. Even if we factor out the increase in foreign students enrolled, more Singaporeans would have to attend other local institutions or go abroad anyway, which means that a broader socioeconomic spectrum of taxpayers is being unfairly excluded.

If subsidies are only offered at our flagship universities, this amounts to protectionism for these well-established institutions. These are not infant industries in need of state support: NUS is 102 years old while NTU is 51. As much as we would like to develop our flagship universities into world-class institutions that compete on a global scale, this should not come at the cost of crowding out other local institutions and our much-desired Global Schoolhouse entrants, and indeed it may well already have in the case of UNSW Asia. Distorting the education market with preferential subsidies is harmful to our Global Schoolhouse strategy and our economy. Instead, by leveling the playing field, competitive pressures from local and foreign institutions will drive costs down and raise the quality of education in the industry as a whole. It is time for our flagship universities to sail on their own steam.

To do so, we must reform the Tuition Grant program. First, it should be available to all who qualify, regardless of where they enroll, which would level the playing field for all students and schools. Second, it should be means-tested by family size, income and assets to exclude those who should pay full fees, whether they are wealthy citizens or foreigners, which would make more subsidies available to needy students. A progressive means-tested system is better than the current regressive system: poorer students are more likely to be rejected by the flagship universities and lose out on subsidies altogether. Even if they enroll in polytechnic diploma courses (and are thus also Tuition Grant recipients), they still pay more relative to A-level holders if they subsequently enroll in the local flagship universities or polytechnic degree programs, and even more if they attend other degree-granting institutions instead.

Reforming the program does not mean that we should cease subsidies to foreign students. Although there is a case for focusing on competitive merit-based subsidies like MOE’s ASEAN scholarship to attract top foreign students to enrich our universities, need-based subsidies attract the majority of foreign students, who may not have qualified for merit-based scholarships but still add value to our economy. The long-term economic benefits of becoming an education hub, in terms of jobs and revenue generated, far outweigh the costs of subsidies spent to attract foreign students to our Global Schoolhouse.

Perhaps we should not limit foreign enrollment at all. If they are to succeed long-term, our universities must admit students based on the value they bring to campus, and not to meet some arbitrary quota. They will then optimize each class by making tradeoffs between candidates in terms of academics, leadership potential, community involvement, extracurricular excellence, cultural diversity and expected alumni contributions – individual qualities that are only indirectly related to nationality, which both locals and foreigners can compete on. If foreign students happen to be more competitive candidates, it provides good incentives for local students to rise to the challenge.

I too am a foreign student at the US university I attend, and have witnessed first-hand the value that international students bring to the university’s culture. But if we are to displace some Singaporeans from our universities by lifting the cap on foreign enrollment, we must make the Tuition Grant program fair to citizens and provide them with the same subsidy to attend any other school of their choice. If Singapore is to become PM Lee’s City of Possibilities, let it be one of equal possibilities for all, including our own.  

About the author: Pin-Quan Ng is a sophomore at Columbia University majoring in economics and political science. His interests are in market systems, civil liberties, and international development.

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40 Responses to “Education and excellence through a fairer Tuition Grant program”

  1. shoestring said

    Are you proposing, say 75% of fees subsidized by taxpayers regardless of where a Singapore citizen is enrolled, locally or overseas? I am all for being fair to Singaporeans students but the subsidy should not be in % terms but absolute terms. Otherwise, I can foresee taxpayers having to shoulder unnecessary additional tax burden due to the following (bear in mind taxpayers from low-mid income may have to subsidise higher income families’ students):

    1 More locals will choose to study overseas for the exposure and perhaps less stringent admission criteria of overseas universities. Knowing that they have more leeway, some may not be motivated to work hard to compete for local places.

    2 Lifting the quota for foreign students could mean more foreign students for taxpayers to support. While I am all for supporting locals, taxpayers who do not have deep pockets will feel the pinch especially when the contribution of foreign students is not guaranteed longer than they bond period.

    3 Means testing may sound like a good idea technically, but looking at our welfare schemes and proposals for healthcare, we may end up paying more for the wrong people to be subsidized.

    I do agree that overseas exposure and multi-cultural academic environments are good for our students, but they should not expect taxpayers to shoulder all of the cost for these additional benefits that local students do not have access to. Perhaps parents who choose to send their children overseas could bear the additional costs/subsidies over and above that for local students.

  2. debbie-o-rah said

    Hi,

    I do agree with you in the reforming of the tuition grant to provide more university options for Singaporeans, that’s a great idea. However, i don’t quite see how you can relate that to the influx of foreigners into local universities, relegating Singaporeans, as you have said, 2nd class citizens for university admissions.

    To me, it seems like two separate matters with a vague and unexplained connection in your article, maybe you can elaborate on your point of view on this.

    From my perspective, welcoming foreigners into our local universities does not equal to pushing away Singaporeans since we run on a system of meritocracy. I don’t have facts to back it up, but it seems to me that as long as you make the grade better than your counterparts, be they foreign or local, there is no reason why the universities won’t accept you as a student.

  3. Pin-Quan Ng said

    Shoestring: Read more carefully.

    “Are you proposing, say 75% of fees subsidized by taxpayers regardless of where a Singapore citizen is enrolled, locally or overseas?”
    Read para 7. Means-testing means the amount of subsidy depends on financial need. The poorer you are, the greater amount of subsidy, and vice versa. How much would be determined by family assets and income, relative to the needs of all other recipients.

    “More locals will choose to study overseas for the exposure and perhaps less stringent admission criteria of overseas universities.”
    Read para 4 and 5. It is precisely to allow Singaporeans who did not get into subsidized local universities to have a chance to get a degree elsewhere with that same amount of subsidy.

    “Lifting the quota for foreign students could mean more foreign students for taxpayers to support.”
    Read para 8. I refer you to EDB’s estimates of economic benefits from the global schoolhouse project.

    “Means testing may sound like a good idea technically, but looking at our welfare schemes and proposals for healthcare, we may end up paying more for the wrong people to be subsidized.”
    Read para 7. We are already subsidizing the wrong people. It doesn’t matter how rich or poor you are at NUS, you get the same subsidy there. And poorer students are less likely to be admitted to NUS.

    “Perhaps parents who choose to send their children overseas could bear the additional costs/subsidies over and above that for local students.”
    Read para 7. They already do, and my point is that is unfair. Remember that poorer students are more likely to have to go elsewhere for their degree.

    Deb: Read more carefully.

    “as you have said, 2nd class citizens for university admissions.”
    Read para 1. I make no such statement. I merely paraphrase what is said by others over the controversy. However, I do believe some Singaporeans are unfairly treated when it comes to university subsidies, and that is the point of this article.

    “To me, it seems like two separate matters with a vague and unexplained connection in your article”
    Read para 4. Tuition grant is available to both Singaporeans and foreigners, and addressing the former must inextricably involve the latter.

    “From my perspective, welcoming foreigners into our local universities does not equal to pushing away Singaporeans since we run on a system of meritocracy.”
    Read para 9. That is precisely my point.

  4. Fowler's Un-Modern English Usage said

    Shoestring…

    You number your paragraphs??!!!

  5. shoestring said

    Fowler’s Un-Modern English Usage,

    Why not? This is not an English examination paper so there is no need to be anal about paragraphs, formats and points.

    Pin-Quan Ng,

    “Read para 7. Means-testing means the amount of subsidy depends on financial need. The poorer you are, the greater amount of subsidy, and vice versa. How much would be determined by family assets and income, relative to the needs of all other recipients.”

    My question is whether the subsidy is in percentage or dollar terms. Means-testing, as mentioned, works in theory but, in practice, there are loopholes. There are many ways students can circumvent the financial need criterion unless you cover all grounds in which case, like our welfare schemes, can be so stringent and tedious, people simply give up or slip through the cracks.

    For instance, bursary applications. On paper some students desperately need the funds but, in reality, they own handphones, eat at restaurants, shop often and wear branded goods. How can they afford that? By applying to many funds/ charities and leave out strategic details. But we can conduct checks, right?

    Sure, but if you were to spend time getting every single detail verified and backed up by paperwork, it would take ages. Then the applicants begin to complain about waiting, backlog piles up, those who really need it, but for various reasons do not have the required documents or need more time to prepare them, finally give up or are cut off by the deadline. Do all the needy ones get their subsidies? Ever wondered why there are bankrupts who can still afford to bask in luxury?

    “Read para 4 and 5. It is precisely to allow Singaporeans who did not get into subsidized local universities to have a chance to get a degree elsewhere with that same amount of subsidy.”

    Please read the second part of point 1. It’s a question of motivation and the human tendency to take the path of least resistance. When confronted with competition, more often than not, our students will complain and expect to be given preferential help instead of facing the challenge head-on. It is not difficult to predict what will happen if you dangle an overseas carrot before them. Will they be motivated to work harder to enter a local university knowing there are more lifelines? Instead of sending more students overseas, we can meet demand with additional local universities.

    “Read para 8. I refer you to EDB’s estimates of economic benefits from the global schoolhouse project.”

    I am highly skeptical when it comes to forecasts and estimates. Why was the CPF retirement age revised? Didn’t the EDB scholars project their estimates diligently for UNSW? Why do we keep losing money on foreign investments? And what happens if the government decides to welcome more foreign baby manufacturers? Even our MM had miscalculated the number of babies needed.
    “Read para 7. We are already subsidizing the wrong people. It doesn’t matter how rich or poor you are at NUS, you get the same subsidy there. And poorer students are less likely to be admitted to NUS.”

    So what difference does means-testing make? Same problem but with more work. I was a very poor student but I landed a place in NUS.

    “Read para 7. They already do, and my point is that is unfair. Remember that poorer students are more likely to have to go elsewhere for their degree.”

    It is not unfair. If one is poor and still does not want to work harder but choose to go overseas, he pays. I was a very poor student, but I landed myself in NUS and an overseas university without government aid.

    My point is, a 4th (or even 5th) university is an equally plausible alternative. It may or may not help the locals. The key is self-motivation. The lack of it may even be why our students are losing out to foreigners. Otherwise, our pitiful teachers would not be having such a hard time trying to coax their students with “creative” lessons.

    For those who choose to go overseas, good for them. But they should not expect an additional subsidy over and above what the locals get. That’s equal opportunity and meritocracy for all, social capital aside.

    With means-testing, I foresee another messy elephant that will attract lots of complaints of unfairness (What happened to meritocracy? Same grades, different $$$), inconsistency (How come his dad drives a sports car but he gets more than me who survive on maggi mee?), waste of money subsidizing the wrong people (this one’s from me) etc. Then we would be back to square one.

    So why create more work and problems when we can have simpler solutions? Is a multi-cultural academic environment only available overseas? We already have more foreigners than we can handle. A first-hand experience in a foreign land is valuable but not indispensable.

  6. Fox said

    “…need-based subsidies attract the majority of foreign students, who may not have qualified for merit-based scholarships but still add value to our economy.”

    Why should the taxpayers subsidize foreign students who cannot afford to pay full fees and not qualify for merit-based scholarships? You can also add value by granting more employment permits. People who took their degrees in India, Vietnam, etc can also add value to our economy too if they are allowed to work in Singapore and they won’t cost the taxpayers a single cent.

  7. Fox said

    “The long-term economic benefits of becoming an education hub, in terms of jobs and revenue generated, far outweigh the costs of subsidies spent to attract foreign students to our Global Schoolhouse.”

    This is, of course, an assertion that you have not backed up with any sort of evidence. Neither do I see the logical link between becoming a Global Schoolhouse and subidizing international students.

    I mean, the whole point of being a Global Schoolhouse is to attract full-fee paying international students. I fail to see how offering subsidies to students who cannot qualify for merit scholarships and afford full fees will lead to the ‘long-term economic benefits of becoming an education hub’.

    In fact, to become a Global Schoolhouse, we should do what Australian state governments did in the late 1980s: that is, to cut off all subsidies to international students. As a result, Australian universities were forced to compete for the dollars of international students and provide competitive educational services. Today, twenty years later, the educational industry in Australia has taken off and full-fee paying foreign students contribute billions of dollars to the Australian economy today. I don’t think that would have been possible if the Australian state governments had not stop the subsidies.

  8. debbie-o-rah said

    Hi Pin-Quan,

    Thanks for dissecting my response, perhaps i wasn’t clear enough on my previous entry.

    I didn’t see how you can relate 1. the PM’s solution of opening a 4th university in response to, what you have wrote or paraphrase (if you like to call it), “underlying sentiments that Singaporeans are being treated like second-class citizens when it comes to university admissions” TO 2. The need for fairer University tuition grants.

    How do you connect in plain English, the fact that we don’t have tuition grants at 75% subsidies that are applicable to students who wanted to do private or go overseas, to, Singaporeans feeling like 2nd class citizens with the foreign students’ entry? I don’t see how your proposal of a fairer grant scheme can serve as a solution to the threat of admissions, unless you’re saying if you feel threatened by the influx of foreigners into local unis, you can choose to go abroad or go private because you can’t take the competition?

    When I say vague and unexplained, I mean: How does Fairer tuition grants = Less threat from foreign students’ admissions?

    Writing this reply to your reply, it suddenly struck me that you are right. i didn’t read close enough, and that perhaps you never meant to concoct a solution to the unfairness in university admissions but focused solely on unfairness in university subsidies?

    In which case, i don’t see how on this level it is unfair to Singaporeans, if you’re comparing Singaporeans versus foreign students. I believe, Singaporeans and foreign students alike, correct me if i’m wrong, have the same benefits for grants. Both are not provided grants with subsidies at 75% cut to private universities like SIM, nor studying abroad.

    If you’re Not comparing Singaporeans versus foreign students in terms of university grants, then what are you comparing? On what basis is it fairer? Fairer to Singaporeans who want to go overseas or go private, as opposed to those Singaporeans in local unis, I understand. But if the latter’s the comparison, I don’t think you are making any sense to me when you write:

    “A new university is a necessary but insufficient measure to address these concerns, as current university tuition subsidies are both unfair to citizens and harmful to the long-term competitiveness of our education industry, and must be reformed even if a new university is introduced.”

    Since ‘these concerns’ in your 2nd para 1st line would refer to the concern that Singaporeans have over the entry of foreign students into the local university arena.

    Hope i made sense to you, thanks for replying anyway, i haven’t had an argument in a while, this is fun 🙂

  9. Pin-Quan Ng said

    “Why should the taxpayers subsidize foreign students who cannot afford to pay full fees and not qualify for merit-based scholarships? You can also add value by granting more employment permits. People who took their degrees in India, Vietnam, etc can also add value to our economy too if they are allowed to work in Singapore and they won’t cost the taxpayers a single cent.”

    Agreed. Note that attracting foreign students and foreign workers are not mutually exclusive.

  10. Pin-Quan Ng said

    “This is, of course, an assertion that you have not backed up with any sort of evidence.”

    I refer you to EDB projections that justify the global schoolhouse project.

    “As a result, Australian universities were forced to compete for the dollars of international students and provide competitive educational services.”

    While I agree that ideally there should be only merit-based subsidies for foreign students, I should note that the large majority of foreign students are attracted here by the broad subsidies extended to all students at the 3 flagships, and the experience of UNSW Asia may show what the demand is like when they pay full fees.

    I do not know what happened in Australia, but if it is as you say it is, I suspect that the continued demand for full-fee places by foreign students post-subsidy-cessation may have had more to do with opportunities (whether real or imagined) to remain in Australia and enjoy the standard of living in the Australian welfare state.

  11. Fox said

    “Agreed. Note that attracting foreign students and foreign workers are not mutually exclusive.”

    In that case, since the economic benefits can be replicated by just approving more EPs, you don’t really have an economic justification for subsidizing foreign students, do you?

  12. Pin-Quan Ng said

    You do not seem to understand the distinction between the benefits derived from foreign labor and foreign students, nor do you understand that they are also cumulative. Of course there is an economic case for subsidizing foreign students even if we increase the supply of foreign labor. There is an optimal point to be reached and we are far from that point. Granted, the costs to taxpayers are immediate and the benefits accrue over time, so there is an intertemporal discounting that should be done.

    You also seem to think this is some kind of radical new idea. It is not. We have blanket subsidized foreign students for the duration of the Tuition Grant program. I argue that this is unfair to taxpayers who don’t get the same benefit. Now I move from an equity perspective to an efficiency one, where it makes sense to invest in people who might not otherwise have even considered being a part of Singapore. It’s not a zero-sum game.

  13. Pin-Quan Ng said

    “My question is whether the subsidy is in percentage or dollar terms. Means-testing, as mentioned, works in theory but, in practice, there are loopholes. There are many ways students can circumvent the financial need criterion unless you cover all grounds in which case, like our welfare schemes, can be so stringent and tedious, people simply give up or slip through the cracks.”

    It is not my intention to focus on implementation issues because I have focused on this as an equity issue to taxpayers, so this is the extent that I will discuss it:

    When I argue that means-testing means the subsidy amount is based on need, then it is neither a fixed percentage or a dollar amount but a variable sum that depends on an individual’s family size, income and assets, as well as budgetary constraints for that year and the relative needs of other recipients. If your concern is about differential costs of tuition, then what I imagine is that the subsidy amount for two individuals who attend universities that charge different tuition prices, ceteris paribus holding financial need constant, is the same dollar amount, which provides an incentive for students to spend wisely.

    Also, a progressive means-tested system, however flawed or gameable, is better than no system at all, which is undoubtedly regressive. Of course there will be problems with implementation, no system is perfect, but that is not a sufficient reason to believe that it will not be beneficial. A good system would also design incentives against gaming the system into tuition subsidies, such as post-graduation (possibly zero-interest or income-contingent) loans or a work-study component.

    “Will they be motivated to work harder to enter a local university knowing there are more lifelines? Instead of sending more students overseas, we can meet demand with additional local universities.”

    My proposal extends subsidies to needy students wherever they choose to enroll, whether it is abroad, or a institution in Singapore that is not currently included by the TG program. They are not mutually exclusive. If local supply increases, that is great too, however I also point out the distortions caused by preferential subsidies to particular universities. Even if these preferential subsidies are increased (by increasing the number of those preferentially subsidized ie more public universities), the market is still distorted. Perhaps it may be better to let the market decide.

    Now, the incentive problems you describe. That is a trade-off, since I suspect you do not like a perfect meritocracy where all subsidies are merit-based only (since it is arguably regressive) nor do you like no system of subsidies at all and everyone pays full fees although our taxes are lower. So we have a progressive, need-based system, and yes, socialism always presents incentive problems. That is its price. I argue that education is worth it.

  14. Pin-Quan Ng said

    “It is not unfair. If one is poor and still does not want to work harder but choose to go overseas, he pays. I was a very poor student, but I landed myself in NUS and an overseas university without government aid.”

    Well good for you! But perhaps it is unfair if a bright, needy kid like you didn’t get a tuition subsidy to go to that overseas university while someone rich still got the subsidy to study locally.

    “For those who choose to go overseas, good for them. But they should not expect an additional subsidy over and above what the locals get.”

    I imagine that holding need constant, the subsidy amount is the same in dollar terms, so there is no “additional subsidy”.

    “The key is self-motivation. The lack of it may even be why our students are losing out to foreigners.”

    Perhaps one reason for the lack of motivation is an admissions quota at the flagship universities that shields Singaporeans from competition from foreign students. If they know that the race isn’t rigged for them, they might want to run a little faster.

  15. Pin-Quan Ng said

    “How does Fairer tuition grants = Less threat from foreign students’ admissions?”

    If Singaporean students are displaced by competition from foreign students for admissions into the local universities, then if tuition grants were fairer and extended to the citizen instead of being attached to the local universities, they would be able to go elsewhere with the same subsidy.

  16. shoestring said

    We may have wonderful sounding policies and ingenious systems and argue only from an equity point of view. For debating purposes, this is one strategy to win an argument. But we are not here to win arguments but to explore solutions that are feasible in real life and that includes implementation issues, which is where some seemingly brilliant ideas fail.

    If education is really “worth it”, we would have to go beyond the academic and take implementation issues seriously instead of sweeping them under the carpet. That, in my opinion, is why the government is rolling out policies, one after another, but they still do not seem to meet the needs of the man in the streets but instead there is more unhappiness.

    “Well good for you! But perhaps it is unfair if a bright, needy kid like you didn’t get a tuition subsidy to go to that overseas university while someone rich still got the subsidy to study locally.”

    I shared my personal experience to show that your assertion that poor students are more likely to be left out of the paper chase doesn’t hold much water and that it takes more than just opportunities.

    I would not have considered it unfair if a someone from a better background had received a subsidy to study locally because I had made a choice to study overseas knowing I wouldn’t be entitled to it.

    In any case, if you have been following closely, I proposed that more local universities be set up instead of sending more students abroad. I have never suggested that students who opt to go overseas should not get a subsidy, but that they should not expect to get more than what the local student is getting. So, if one still cannot get into a local university when supply is increased, perhaps he really isn’t made for it. But if he qualifies for a local university and chooses to go overseas, why should taxpayers shoulder the additional costs? Is it fair then?

  17. Hi everyone,

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  18. Pin-Quan Ng said

    I chose to limit discussion of implementation because my understanding of that is limited. Instead, I raise the possibility of a policy that I believe is Just, in the hope that it can be made a practical reality. If you think this was meant to be just a debate on the internet, please know I spend my time more wisely than that.

    “but that they should not expect to get more than what the local student is getting. So, if one still cannot get into a local university when supply is increased, perhaps he really isn’t made for it. But if he qualifies for a local university and chooses to go overseas, why should taxpayers shoulder the additional costs? Is it fair then?”

    There is no additional cost, as I have repeated several times in response to you and others. The dollar amount of the subsidy voucher is the same, ceteris paribus holding need constant, wherever the recipient chooses to use it. For this individual, the cost of the subsidy to the taxpayer is the same. The difference is that the money goes to the institution that the individual has deemed to provide the most value for his time and money, and the market is thus more competitive and hopefully becomes more efficient.

    I suspect you believe that the cost is higher, because preferential subsidies for local universities have distorted the public perception of their true cost of providing that education. Not simply because the preferential subsidy makes it cheaper to go there, but because market distortions inhibit competitive pressures to push down prices overall.

    “I shared my personal experience to show that your assertion that poor students are more likely to be left out of the paper chase doesn’t hold much water and that it takes more than just opportunities.”

    Unfortunately, you may be an outlier among a sea of data points. It has been empirically shown in various studies in various countries that income correlates with academic achievement, and it doesn’t take much imagination to see the causal link there, whether you believe there are developmental or environmental advantages (peer/expectation effects etc) or hereditary selected ones or some combination thereof, and even if you think the causality runs both ways. These advantages tend to more than outweigh the relatively greater incentives poorer students have to succeed. Certainly, in some cases, like you for instance, there will be exceptions – there are always outliers. But the probability remains relatively lower.

  19. Pin-Quan Ng said

    “I would not have considered it unfair if a someone from a better background had received a subsidy to study locally because I had made a choice to study overseas knowing I wouldn’t be entitled to it.”

    And this is where we fundamentally disagree. I believe you are entitled to that subsidy if you need it, wherever you choose to study. The reason why we subsidize education at all, why education is the second largest component of the budget, the whole purpose of the Tuition Grant program, is because education is a public good. It is a smart investment in human capital. It has external benefits that accrue to society. And because these benefits accrue to society i.e. you and me, it is society i.e. we taxpayers that bear the cost. But when we exclude the subsidy from a taxpayer simply because he chooses to study elsewhere, then we undermine the very purpose of education subsidies. I argue in my article above that we exclude the very people who need it most, which doesn’t make any sense from an equity or an efficiency perspective.

  20. shoestring said

    “There is no additional cost, as I have repeated several times in response to you and others. The dollar amount of the subsidy voucher is the same, ceteris paribus holding need constant, wherever the recipient chooses to use it.”

    That was why the first question I asked was to clarify whether the subsidy was proposed as a percentage of fees or a fixed dollar sum. Because the fees vary, especially among overseas universities. As it is right you, you and I seem to be on the same boat about the quantum.

    “And this is where we fundamentally disagree. I believe you are entitled to that subsidy if you need it, wherever you choose to study.”

    This is an ideal, but as members of a community, I believe we should look beyond what we are entitled to. Same applies to rights. That is one reason for the numerous conflicts in this world.

    “It is a smart investment in human capital.” Agree fully. We have to be prudent in our investments too.

    I may be an “outlier”, but I do know of many others in the same situation as I was and did much better to become scholars and prominent personalities. I have to emphasize that academic achievement is not only about opportunities but more than that. Determination, perseverance, hardwork etc. play a very important role in education, even more so than textbooks and grades. And honestly, having been to China and experienced the environment in which their students are being taught, and witnessing their eagerness to learn, I seriously think our students have taken their blessings for granted.

  21. Fox said

    “You do not seem to understand the distinction between the benefits derived from foreign labor and foreign students, nor do you understand that they are also cumulative.”

    I don’t understand that distinction because I don’t know what economic benefits – short or long term – can be obtained from subsidizing foreign labour. Perhaps, you could be more clinical and list out these benefits. These must be benefits that cannot be otherwise obtained by just simply increasing the supply of foreign labour or allow freer movement of people into Singapore.

    Of course there is an economic case for subsidizing foreign students even if we increase the supply of foreign labor.

    That’s contingent on the existence of significant short/long-term benefits to subsidizing foreign students.

    “There is an optimal point to be reached and we are far from that point. Granted, the costs to taxpayers are immediate and the benefits accrue over time, so there is an intertemporal discounting that should be done.”

    Optimal with respect to what and how did you reach the conclusion that we are ‘far from that point’?

    “You also seem to think this is some kind of radical new idea. It is not. We have blanket subsidized foreign students for the duration of the Tuition Grant program.”

    Actually, I know the Tuition Grant Scheme well.

    “I argue that this is unfair to taxpayers who don’t get the same benefit.”

    OK. Then we abolish the Tuition Grant Scheme for foreign students. That makes everything fairer.

    I am not being sarcastic here.

    Now I move from an equity perspective to an efficiency one, where it makes sense to invest in people who might not otherwise have even considered being a part of Singapore.

    That would depend on what kind of benefits Singapore gets from investing in these people.

  22. ted said

    Obviously some people really buys into the whole shebang idea of meritocracy. It’s quite useless and counter-productive to want to persuade people with such leanings about anything else as they cannot but help to see the situation based on their subjective experience. How do I put it, hmm, when you have it made better relative to the masses of bodies you came from, you tend to not want to associate with them anymore.

  23. Fox said

    Correction in post 21:

    “I don’t understand that distinction because I don’t know what economic benefits – short or long term – can be obtained from subsidizing foreign labour”

    should read

    “I don’t understand that distinction because I don’t know what economic benefits – short or long term – can be obtained from subsidizing foreign students”.

  24. Pin-Quan Ng said

    “Obviously some people really buys into the whole shebang idea of meritocracy. It’s quite useless and counter-productive to want to persuade people with such leanings about anything else as they cannot but help to see the situation based on their subjective experience. How do I put it, hmm, when you have it made better relative to the masses of bodies you came from, you tend to not want to associate with them anymore.”

    Sir, if you believe that I am uncritical of meritocracy, I suggest you take a moment to read my article more carefully for what it actually says, and not what you wish to believe it says. In particular, you should read more carefully my argument for progressive means-testing. Perhaps that might be a sufficient answer to your comment.

  25. Pin-Quan Ng said

    Shoestring:
    “This is an ideal, but as members of a community, I believe we should look beyond what we are entitled to. Same applies to rights. That is one reason for the numerous conflicts in this world.”

    You may have your own personal opinion on what you are entitled to as a taxpaying citizen, however noble it may be, but it might be a bit of a stretch to impose that opinion on the rest of the taxpayers who, I believe, are not only justly entitled to equal access to tuition subsidies, and do actually feel entitled to them as well, if the controversy on foreign enrollment are representative of public sentiment.

    “I may be an “outlier”, but I do know of many others in the same situation as I was and did much better to become scholars and prominent personalities. I have to emphasize that academic achievement is not only about opportunities but more than that. Determination, perseverance, hardwork etc. play a very important role in education, even more so than textbooks and grades. And honestly, having been to China and experienced the environment in which their students are being taught, and witnessing their eagerness to learn, I seriously think our students have taken their blessings for granted.”

    Perhaps your circles may not be representative of the population as a whole. Individuals tend to associate among their like, and your anecdotal perception of the number of poor kids doing well may be higher than normal. My assertion is based on data.

    Furthermore, certainly academic achievement is multicausal but my argument for equal access to subsidies for citizens is based on justice, not consequences. Where consequences are concerned, I refer you to my arguments for lifting quotas on foreign enrollment as an incentive towards determination, perseverance, and hard work. It is after all the competitive environment in China that has motivated its students, and perhaps we may bring that environment here with more of them here.

  26. Pin-Quan Ng said

    Fox:
    “I don’t understand that distinction because I don’t know what economic benefits – short or long term – can be obtained from subsidizing foreign students. Perhaps, you could be more clinical and list out these benefits. These must be benefits that cannot be otherwise obtained by just simply increasing the supply of foreign labour or allow freer movement of people into Singapore.”

    I begin with the assumption that most foreign students are attracted to Singapore flagship universities by the large subsidies available. I believe this to be a safe assumption given the experience of UNSW Asia – similar fee structure but no subsidies. Whether the assumption holds may depend on whether the education at UNSW Asia is fully comparable to NUS/NTU/SMU, but I think it is safe to assume that foreign students are extremely price sensitive when it comes to commoditized education (as opposed to say, educational signaling).

    From this assumption, if subsidies to foreign students are eliminated, the number of foreign students at the local flagships will decrease, and their places taken up by citizens who will be subsidized. Thus, from an expenditure perspective, this is budget-neutral and takes up the same amount of taxpayer money. Although this would redistribute back towards citizens, my proposal in the article above to extend subsidies to citizens wherever they enroll would mean that net redistribution is zero. Remember that this is a package of policies.

    Therefore from an expenditure or redistribution perspective one should be indifferent to whether or not foreign students are subsidized. Indeed, from an efficiency perspective, efficiency has been lost if subsidies to foreign students are eliminated. By decreasing the pool of applicants, the average value of each enrolled student is reduced and our universities are that much less competitive.

    Now I argue that there is an up-side when the benefits from foreign students are factored in. I shall not list these benefits here because others have done so elsewhere. But you insist that the benefits from foreign students must be specific to them. I keep telling you that the benefits are cumulative, which means that they are not mutually exclusive to the ones accrued from increases in foreign labour. It is not an either-or proposition or a zero-sum game.

  27. Fox said

    “I begin with the assumption that most foreign students are attracted to Singapore flagship universities by the large subsidies available. I believe this to be a safe assumption given the experience of UNSW Asia – similar fee structure but no subsidies. Whether the assumption holds may depend on whether the education at UNSW Asia is fully comparable to NUS/NTU/SMU, but I think it is safe to assume that foreign students are extremely price sensitive when it comes to commoditized education (as opposed to say, educational signaling).”

    No quibbles about that.

    “From this assumption, if subsidies to foreign students are eliminated, the number of foreign students at the local flagships will decrease, and their places taken up by citizens who will be subsidized. Thus, from an expenditure perspective, this is budget-neutral and takes up the same amount of taxpayer money. Although this would redistribute back towards citizens, my proposal in the article above to extend subsidies to citizens wherever they enroll would mean that net redistribution is zero. Remember that this is a package of policies.”

    Well, the net distribution is zero because you have contrived to keep the total number of subsidized places to be a constant in your proposal. There’s no real necessity to do so, is there? Remember, you are trying to introduce competition for our flagship universities so that they will be forced to upgrade their educational services. If you fix the number of subsidized places in our local universities, then revenue to our local universities won’t be affected by the quality of their educational services, won’t it? You will be back to square one.

    “Therefore from an expenditure or redistribution perspective one should be indifferent to whether or not foreign students are subsidized. Indeed, from an efficiency perspective, efficiency has been lost if subsidies to foreign students are eliminated.”

    Well, in that case, just fix the number of local students who are eligible for university/polytechnic subsidies. For example, if we had 20,000 subsidized students with 5,000 of them being international and the rest locals, then if you stop funding the 5,000 internationals, then you save a whole lot of money. There is no loss of efficiency because the 15,000 locals must have been as competitive as the nonlocals in the first place to secure their places before the subsidies were cut.

    I’m making up the numbers out of thin air but they are for illustrative purposes. We could possibly have the case of 5,000 locals and 15,000 nonlocals but I trust your algebraic intuition to see what I am getting at.

    “By decreasing the pool of applicants, the average value of each enrolled student is reduced and our universities are that much less competitive.”

    Well, all you have to do is to fix the number of places for locals. Then, there cannot be a reduction in terms of average value per student.

    Also, if our universities feel that having more international students has an improving effect on their competitiveness, then they should come up with their own funds to subsidize the enrollment of international students. The very fact that international students have to be subsidized distorts their true value-addition to our universities’ competitiveness.

    Secondly, the competitiveness of a modern research university is largely dependent on their research. Subsidizing international undergraduate students do not help in this.

    “Now I argue that there is an up-side when the benefits from foreign students are factored in. I shall not list these benefits here because others have done so elsewhere.”

    Show me a website, a link, a journal, a paper, anything. You keep asserting that there are such benefits in Singapore’s context and they are cumulative. What are those benefits?

    “I keep telling you that the benefits are cumulative, which means that they are not mutually exclusive to the ones accrued from increases in foreign labour. It is not an either-or proposition or a zero-sum game.”

    I never said that these economic benefits from international students are exclusive to the ones accrued from increases in foreign labour. I assert that former are substitutable by those from the latter.

  28. shoestring said

    “the rest of the taxpayers who, I believe, are not only justly entitled to equal access to tuition subsidies, and do actually feel entitled to them as well”

    Since when I have said our students are not entitled to equal access to tuition subsidies? I repeat, I have suggested a fixed dollar sum subsidy for all Singaporeans students, whether local or overseas. But, those who choose to go overseas should not expect to get MORE than what the locals are getting. That, to me is as equal as it can get.

    You on the other hand, have not answered my very first question, that is, whether the subsidy proposed is in percentage or dollar terms. The former implies that some will get more than others in dollar terms whereas the latter means everyone gets the same amount.

    I repeat, I have also supported the idea of a 4th university to meet demand instead of sending students overseas. If, with increased supply, people still cannot make it, we do not need statistics to tell us that they are either below the standard, unmotivated or simply bent on going overseas without even trying to compete. Are you suggesting that we subsidize these individuals too? Not me, I’d rather the money be spent on the needy in the streets. That is money more well spend.

    Why do you object to competition for students, when you have advocated that local universities be subject to it? If it forces local universities to buck up, it will do the same for our students.

    How is Singapore going to survive in the long term if our future generations cannot handle competition but expect to be rescued and given what they think is their entitlement?

  29. Dead poet said

    Well our Ministry of Eunuchs (MOE) has done it again, understand the top brass of one of the leading government attracted and funded Arts school have quit. Although we are hearing a lot of the usual reasons blah blah blah, grapevine has it that the Eunuch Ministers and gang were not happy about the way the white folks (top brass) were trying to make it into a University, when they have not decided who deserves to be called a University. It does not matter if the qualification given out is respected due the institutions reputation and standing over the years. Well rumour has it that tie up with two top Universities were also scrapped leaving student fuming. But we must assure the students that we have highly competent eunuch educationist leading the Ministry and the Mimistries record speaks for itself..no places for locals, short of doctors, lawyers, etc etc..that’s deserving the million dollar salary..kids the possibilities is endless..

  30. Pin-Quan Ng said

    Shoestring: Please read carefully since I am taking the time to write detailed substantive responses.

    “You on the other hand, have not answered my very first question, that is, whether the subsidy proposed is in percentage or dollar terms. The former implies that some will get more than others in dollar terms whereas the latter means everyone gets the same amount.”

    I have answered this question twice in previous comments. I repeat the relevant section here:

    When I argue that means-testing means the subsidy amount is based on need, then it is neither a fixed percentage or a dollar amount but a variable sum that depends on an individual’s family size, income and assets, as well as budgetary constraints for that year and the relative needs of other recipients. If your concern is about differential costs of tuition, then what I imagine is that the subsidy amount for two individuals who attend universities that charge different tuition prices, ceteris paribus holding financial need constant, is the same dollar amount, which provides an incentive for students to spend wisely.

    “I repeat, I have also supported the idea of a 4th university to meet demand instead of sending students overseas.”

    I did not dismiss the proposal to start a 4th university. I refer you to my first and second paragraph of the article, with particular attention to the operative “necessary but insufficient”. If your contention is that it is in fact sufficient, my response was in the same comment as above, which I repeat here:

    If local supply increases, that is great too, however I also point out the distortions caused by preferential subsidies to particular universities. Even if these preferential subsidies are increased (by increasing the number of those preferentially subsidized ie more public universities), the market is still distorted. Perhaps it may be better to let the market decide.

    “Why do you object to competition for students, when you have advocated that local universities be subject to it? If it forces local universities to buck up, it will do the same for our students.”

    I have no idea where you get this idea from because I certainly do not object to competition. Please refer to my original article’s penultimate paragraph for a clear statement of my position.

    If you believe that extending tuition subsidies to all citizens wherever they enroll is ‘anticompetitive’, in the sense that citizens need not compete as much for places at the flagship universities to obtain the subsidies they deserve, then you are right. However, I am unconcerned about this – Note that the entire point of the article is to argue that this arrangement is unfair to citizens. This is an equity argument.

    If you think “aha that is contradictory!” then I suggest you make the mental distinction between which area of competition is more important and how different the disincentives are. I believe the disincentives to citizens towards working harder in school due to equal access to tuition subsidies are insignificant, and even if they were significant, we would subsidize education anyway as a public good. I believe the disincentives to universities towards improving the quality of education due to preferential subsidies are significant, as they have been significant in every organization and in every industry that has ever received preferential subsidies.

  31. Pin-Quan Ng said

    Dead poet: Please respect the editors and readers of The Online Citizen and keep it civil. They have worked hard to make this a professional medium.

  32. Pin-Quan Ng said

    Fox:

    “Well, in that case, just fix the number of local students who are eligible for university/polytechnic subsidies. For example, if we had 20,000 subsidized students with 5,000 of them being international and the rest locals, then if you stop funding the 5,000 internationals, then you save a whole lot of money. There is no loss of efficiency because the 15,000 locals must have been as competitive as the nonlocals in the first place to secure their places before the subsidies were cut.”

    The relevant comparison is not the other admitted locals but the next-best ones who were not admitted, because they are the ones who were displaced by foreign students.

    Consider 2 populations of applicants. The 1st population includes foreign and local applicants. This is larger than the 2nd population which is only local applicants. The value of individual applicants will differ, but in aggregate each population will approximate a bell curve. Assume that the selection process admits a top number (equal to number of places available) of applicants regardless of nationality. The average value of the top number is more likely to be higher in the larger population than the smaller population, simply by virtue of being a larger population.

    “Show me a website, a link, a journal, a paper, anything. You keep asserting that there are such benefits in Singapore’s context and they are cumulative. What are those benefits?”

    I refer you to a brief EDB website search: George Yeo (http://www.edb.gov.sg/edb/sg/en_uk/index/news_room/news/2003/singapore_the_global.html) and Teo Chee Hean (http://www.edb.gov.sg/edb/sg/en_uk/index/news_room/publications/singapore_investment3/singapore_investment4/0.html) both qualitatively discuss the benefits of foreign students and global schoolhouse project.

    While I could not find a quantitative assessment of the aggregate benefits of the global schoolhouse on their website – I suppose that is proprietary information – I extrapolate from their projections of UNSW Asia (http://www.edb.gov.sg/edb/sg/en_uk/index/news_room/news/2004/university_of_new.html), which was initially projected to cater to 15,000 primarily foreign students, 10% of the projected target of 150,000 for the global schoolhouse in total. UNSW Asia was projected to inject $500mn per annum, so by assuming a proportional increase, the global schoolhouse would in aggregate inject $5bn per annum.

    Granted, UNSW Asia didn’t go as planned, perhaps because of preferential subsidies to the flagships – it was meant to have full-fee paying students. Therefore, let us subtract from the projection the cost of subsidies, in a hypothetical world where students at UNSW Asia (and the rest of the global schoolhouse) did have access to means-tested subsidies, and therefore met the projection.

    In the cost-benefit analysis, the point where total costs and benefits are equal (i.e. the ‘exit the market’ point) is when subsidies cost $5bn, and this is the maximum amount we would spend. Any more and it would be a net loss. I consider the exit point first because it’s easier to quantify (we will move to optimizing profit later). Means-tested subsidies will vary according to need, but an approximation of the maximum average subsidy per foreign student is: $5bn divided by 150,000 gives $33,333.33, ~60% of full annual tuition at NUS FASS, an attractive amount. The actual total cost is likely to be less than this since it is means-tested and not all foreign students will qualify to get the maximum amount. If we consider multiplier effects from the injection and non-monetary benefits (as discussed by Teo in link above), then the benefits are even greater. Therefore, it seems that we can offer a pretty generous subsidy to needy foreign students to attract them, while still breaking even. But our goal is not to break even but to optimize profit (i.e. where marginal revenue equals marginal cost), minimizing the subsidy while retaining demand for enrollment. To calculate this I would need the price elasticities for foreign students, but that’s beyond my capacity.

    I apologize in advance for any errors or bad assumptions, except those drawn from EDB projections. This is a back-of-envelope case-interview type of model.

  33. shoestring said

    “When I argue that means-testing means the subsidy amount is based on need, then it is neither a fixed percentage or a dollar amount but a variable sum that depends on an individual’s family size, income and assets, as well as budgetary constraints for that year and the relative needs of other recipients. If your concern is about differential costs of tuition, then what I imagine is that the subsidy amount for two individuals who attend universities that charge different tuition prices, ceteris paribus holding financial need constant, is the same dollar amount, which provides an incentive for students to spend wisely.”

    Isn’t it contradictory to say the subsidy is a “variable sum” and then imagine it to be the “same dollar amount”? So which are you suggesting? Variable or fixed? I must admit that it is difficult to read your thoughts carefully when it is inconsistent or unclear which position you are advocating.

    “If local supply increases, that is great too, however I also point out the distortions caused by preferential subsidies to particular universities. Even if these preferential subsidies are increased (by increasing the number of those preferentially subsidized ie more public universities), the market is still distorted. Perhaps it may be better to let the market decide.”

    How is this relevant to the issue of whether the subsidy is variable or fixed? Whichever way the market decides, the issue remains the same. Fixed or variable?

    “I have no idea where you get this idea from because I certainly do not object to competition. Please refer to my original article’s penultimate paragraph for a clear statement of my position.”

    Double-speak again. You do not object to competition but at the same time advocate subsidies for students going overseas. Effectively, it increases the supply (local + overseas) of affordable education indefinitely, thereby lessening the competitive pressure. This is true regardless of whether there are more or less foreign students.

    “Note that the entire point of the article is to argue that this arrangement is unfair to citizens. This is an equity argument.”

    Is it equitable for all Singaporean students to get the same fixed amount or variable amount?

    “I believe the disincentives to citizens towards working harder in school due to equal access to tuition subsidies are insignificant, and even if they were significant, we would subsidize education anyway as a public good.”

    You mention “equal access”. It’s ambiguous. Does it mean equal opportunity to apply but not necessarily equal amounts disbursed? In any case, I did not disagree that “we would subsidize education anyway as a public good.”

    I have tried my best to understand what you are driving at, but with the inconsistency and ambiguity running through your answers, it is futile to pursue further clarification. It’s like beating around the bush with the PAP.

  34. Fox said

    “I refer you to a brief EDB website search: George Yeo (http://www.edb.gov.sg/edb/sg/en_uk/index/news_room/news/2003/singapore_the_global.html) and Teo Chee Hean (http://www.edb.gov.sg/edb/sg/en_uk/index/news_room/publications/singapore_investment3/singapore_investment4/0.html) both qualitatively discuss the benefits of foreign students and global schoolhouse project.”

    Both articles discuss the education industry in general – there is nothing specific on how Singapore benefits from having an increased subsidized international undergraduate population in our public universities.

    “While I could not find a quantitative assessment of the aggregate benefits of the global schoolhouse on their website – I suppose that is proprietary information – I extrapolate from their projections of UNSW Asia (http://www.edb.gov.sg/edb/sg/en_uk/index/news_room/news/2004/university_of_new.html), which was initially projected to cater to 15,000 primarily foreign students, 10% of the projected target of 150,000 for the global schoolhouse in total. UNSW Asia was projected to inject $500mn per annum, so by assuming a proportional increase, the global schoolhouse would in aggregate inject $5bn per annum.”

    No. The EDB article doesn’t say that UNSW Singapore will inject $500m per annum. It says ‘UNSW Singapore is expected to contribute at least S$500 million per annum in direct spending to the local economy’. Anything can contribute $500 million in direct spending so long as someone comes with the $500 million. Any fool can spend $500 million dollars.

    Besides, you are talking about tertiary education which is relatively more expensive. Not all 150,000 students will be university students.

    “Granted, UNSW Asia didn’t go as planned, perhaps because of preferential subsidies to the flagships – it was meant to have full-fee paying students. Therefore, let us subtract from the projection the cost of subsidies, in a hypothetical world where students at UNSW Asia (and the rest of the global schoolhouse) did have access to means-tested subsidies, and therefore met the projection.

    In the cost-benefit analysis, the point where total costs and benefits are equal (i.e. the ‘exit the market’ point) is when subsidies cost $5bn, and this is the maximum amount we would spend.”

    No. The exit point is when the returns on the marginal spending on something else (healthcare, free university education, public infrastructure, defence, etc) exceeds the returns on the marginal spending on subsidizing international students.

    If you don’t see why you are wrong, imagine this: The tourism industry in Singapore brings in $12.4 billion a year and tourist arrival numbers are 9.7 million. So, each tourist brings injects about $1,200 into the Singapore economy. Applying the reasoning behind your ‘cost-benefit analysis’, if we want to double our tourist arrivals and their injections into the local economy, we should hand out a dozen hundred dollar bills to each tourist arriving at Changi.

    It’s a question of allocation of resources. Why should the Singapore government spend $5 billion on subsidizing foreign students when it can use that same sum of money to build infrastructure (roads, land, etc), improve public healthcare, improve education, invest, offer tax rebates, support SME’s, subsidize public transport, offer $1,200 cash to each tourist, etc? Spending $5 billion on any other needs also injects $5 billion into the economy.

    “But our goal is not to break even but to optimize profit (i.e. where marginal revenue equals marginal cost), minimizing the subsidy while retaining demand for enrollment. To calculate this I would need the price elasticities for foreign students, but that’s beyond my capacity.”

    There are other things which are clearly beyond your capacity. Like understanding what constitutes revenue or cost in your explanation of the case for subsidizing foreign students.

    “I apologize in advance for any errors or bad assumptions, except those drawn from EDB projections. This is a back-of-envelope case-interview type of model.”

    Please don’t apologize to me; apologize to the professor who taught you economics.

  35. Fox said

    In case I wasn’t clear in my previous post, I should point out a very simple fact: a $500 million injection into the economy is NOT equivalent to an additional $500 million of revenue, even if we assume no multiplier effect.

    If you still doesn’t get it, let me give a very simple example which illustrates the flawed ‘cost-benefit analysis’ Pin-Quan Ng gave in post 32.

    Suppose I pay $1000 in taxes and the government uses that $1000 to subsidize an international student who then uses that $1000 to buy a computer from me. That’s a $1000 injection into the economy. Am I the taxpayer off now that I have paid the $1000 in tax? Of course not. I’m poorer by one computer than if I had not paid any taxes at all in the first place!

  36. Roseiby said

    This article is amazing. You detail a concise and efficient solution for the aspects affecting the issue. I hope this gets implemented in Singapore.

  37. Pin-Quan Ng said

    Shoestring:

    Since all your questions start where you didn’t understand the paragraph I referenced, I will break it down for you. The subsidy amount is variable because it varies according to financial need criteria relative to other recipients and budget allocation. Based on these variables, between 2 hypothetically identical candidates (that is what ceteris paribus means) who attend universities that charge different tuition fees (whether local or overseas), the dollar amount of the subsidy would be the same. I hope this explanation is clearer to you and addresses your concerns on equity between citizens who choose to study locally or overseas.

  38. Pin-Quan Ng said

    Fox: I’ve answered all your queries in good faith, but you prefer ad hominem, which is uncalled for especially since you write behind the shield of anonymity while everyone else here writes with their name. You also do the editors of The Online Citizen a disservice since they have worked so hard to make this a civil, professional forum. You are welcome to make your own substantive response in an article for the editors.

    As I had stated clearly, the model I described is a back of envelope calculation in lieu of aggregated EDB projections, which I tried to find for you but are likely to be proprietary. I will concede your points on the model, because I know it is a oversimplification based on limited data anyway and wasn’t meant to be comprehensive. But problems with my own model should not be construed to end the debate there – I believe that EDB plans for the global schoolhouse are in place because they have calculated it to their satisfaction, and my other arguments in the comments above also stand. Even if I am convinced that need-based subsidies to foreign students are not beneficial, then it will not be part of my proposal, of which it constitutes a mere one paragraph, an afterthought at best and central neither to my proposed lift of foreign enrollment quotas nor the proposal as a whole, which are independent of it. And if you indeed feel so strongly about tuition grant subsidies to foreign students, then you may be much in agreement with the rest of my proposal.

  39. Fox said

    “I will concede your points on the model, because I know it is a oversimplification based on limited data anyway and wasn’t meant to be comprehensive.”

    The data aren’t the problem. Nor is the model. The problem is that you used the term ‘revenue’ in a very very sloppy and imprecise manner and then proceeded to fluff up your analysis with academic-sounding phrases from an economics textbook. You used ‘benefits’ and ‘revenue’ synonymously when they are conceptually distinct and then went off the deep end about ‘maximizing profit’ or ‘breaking even’. Please try to understand that you misused a very basic elementary concept in your analysis.

    “I believe that EDB plans for the global schoolhouse are in place because they have calculated it to their satisfaction, and my other arguments in the comments above also stand.”

    Whatever calculations they have made must have been based on the assumption of attracting full fee-paying students, something which you do NOT take into account.

    “Even if I am convinced that need-based subsidies to foreign students are not beneficial, then it will not be part of my proposal, of which it constitutes a mere one paragraph, an afterthought at best and central neither to my proposed lift of foreign enrollment quotas nor the proposal as a whole, which are independent of it.”

    A justification for your proposal to do away with preferential subsidies to our local universities is that, in your own words, ‘distorting the education market with preferential subsidies is harmful to our Global Schoolhouse strategy and our economy’.

    There is no relationship between subsidizing locals students and the Global Schoolhouse strategy because the latter is a strategy targeting international full fee-paying students while the former is an issue of equity between local students who study locally and those who go to other universities. These two issues are not directly related. There is no reason to believe that offering local students subsidies to study overseas will affect Singapore’s ability to capture part of the international student market. Our flagship universities obviously play an insignificant part in this Global Schoolhouse strategy since they don’t even have a substantial full fee-paying international student population.

  40. […] The uncensored version can be found here. […]

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