About 4% of foreign students default on bond obligations

About 4 per cent of international students now default on their bonds, and the tuition grants given to these defaulters amount to some $5.5 million a year, said Education Minister Ong Ye Kung yesterday.

He said the Ministry of Education (MOE) will continue to recover the monies, and that the ministry takes a serious view of this small proportion of defaulters. "It is not just a matter of money, but also honour and trust."

He said MOE has taken steps to prevent those who fail to pay liquidated damages from living or working here.

Workers' Party MP Png Eng Huat (Hougang) had asked for the number of international students who defaulted on their bond obligations in the last three years, the amount in grants they received and the outcomes of recovery efforts.

Mr Png noted that as of 2016, about $30 million worth of grants had been given to international students who defaulted on their bonds.

On why the amount of grants doled out to defaulters has now come down to $5.5 million, Mr Ong said there was a backlog of international students whom MOE had still been trying to contact in 2016.

"Some were working here but didn't declare that to us, so they became a question mark. Others were indeed defaulters. We put all of them together and it came up to $30 million still being accounted for," he said.

MOE has since contacted "practically all of them" and determined that the default rate is 4 per cent, amounting to about $5.5 million a year in grants, he added.

 
 
 

"We have tightened the recovery over the last few years. It means there's no running away from calling them, giving them the right forms to fill at the right time and then having good border control."

Those who default on bonds cannot game the system and return to Singapore once the Government has their names and identification numbers, the minister added.

It is inevitable that some will not honour their bonds, Mr Ong said. "But we will try to tighten the selection, make sure we've picked the right people and make sure that they will continue to fulfil their obligations."

A version of this article appeared in the print edition of The Straits Times on August 06, 2019, with the headline 'About 4% of foreign students default on bond obligations'. Print Edition | Subscribe