Foreign students who deliberately default on their scholarship bond obligations may be banned from working or residing in Singapore, Parliamentary Secretary for Education Low Yen Ling said yesterday.

Ms Low also told Parliament that about 1 per cent of them have defaulted, and the Ministry of Education (MOE) is contacting another 4 per cent to check whether they can fulfil their bond obligations.

The remaining 95 per cent are serving their bond or have applied for deferment to pursue further studies, while a handful are unable to fulfil their obligations owing to reasons like illness, she added.

Those who show no intention of serving their bond will be made to pay liquidated damages.

"A few have started to pay back the monies and we will continue to chase the rest of the defaulters for the scholarship monies," she said.

"In the event that they do not pay the liquidated damages, they will not be able to come to Singapore to work or to stay."

Ms Low was replying to Mr Png Eng Huat (Hougang), who had asked, among other things, about the amount MOE had recovered from foreign students who are bond breakers, the number of them deemed non-contactable, the length of time taken to recover such scholarship monies and the amount written off.

The Auditor-General's Office (AGO), in its latest annual report, found that the ministry did not do enough to ensure these students were reminded of their obligations and paid the liquidated damages.

Ms Low said that in the last few years, MOE has "progressively stepped up" measures to track and ensure scholarship holders serve their bond.

These include working more closely with agencies, such as the Manpower Ministry and Immigration and Checkpoints Authority, to track the employment status of these scholarship holders, as well as informing them of their obligations when they are given their scholarship and throughout their studies.

Ms Low also said, when replying to Mr Cedric Foo (Pioneer), that her ministry's top priority is to nurture Singaporean talent. Most of the undergraduate scholarships are given to Singaporeans, she added.

Giving the big picture, she said international scholarships add diversity to campus life, offering "opportunities for Singapore students to develop cross-cultural skills exposure and global awareness".

The AGO report also found inadequate controls to ensure outstanding student loans were promptly recovered. The loans are administered by banks but the money is from the MOE.

Unpaid loans of former students of National University of Singapore and Nanyang Technological University stood at around $228.04 million as at June 30 last year. Add on the loans of those from other institutes of higher learning and the total soars to $511.49 million.

But only 1.4 per cent of the sum is in default and deemed unrecoverable, Acting Education Minister (Higher Education and Skills) Ong Ye Kung told the House yesterday.

It is not a high rate, he added, noting that corresponding figures are about 40 per cent in the United Kingdom and 10 per cent to 20 per cent in the United States.

"Write-off of loans is considered only as a last resort when the banks have exhausted all means and all efforts to recover them," Mr Ong said in his reply to Ms Denise Phua (Jalan Besar GRC).

He also said access to such student loans is "deliberately made easy to help as many students as possible".

"This was never meant to be a commercial operation, but part of our policy to help students with their education, and it also serves a social objective," he added.