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Student Protection Scheme
Reference from Consumers Association of Singapore (CASE) & Singapore Education
CaseTrust for Education
CaseTrust for Education was launched on 1 September 2004, aims to recognize Private Education Organisations (PEOs) that have good student welfare practices and high quality standards with the following mechanisms in place:
- Clear fee policies
- Well-defined student redress practices and systems
- Disclosure of its commitment to quality
- Assurance of well-trained academic and administrative personnel
It is a collaborative project of the Consumers Association of Singapore (CASE), Economic Development Board (EDB), SPRING Singapore, Singapore Tourism Board (STB) and the Infocomm Development Authority of Singapore (IDA).
The Student Protection Scheme (SPS) serves to protect the students' tuition fees in the event a PEO is unable to continue operations due to insolvency, and /or regulatory closure. Furthermore, the SPS protects the student if the PEO fails to pay penalties or return fees to the student arising from judgements made against it by the Singapore courts. There are two schemes under SPS - Student Tuition Fee Account (Escrow) or Student Tuition Fee Insurance (STFI).
There are two schemes under the SPS that PEOs can choose:
- Student Tuition Fee Account (Escrow) run by DBS Bank and HSBC
Tuition fees paid by the students to the PEOs will have to be left in the custody of a third party, in this case the CASE-endorsed banks, DBS Bank and HSBC, participating in the Student Tuition Fee Account (Escrow) scheme. When specified conditions for its release have been met, the banks will disburse the tuition fees on a regular basis to the PEO.
The disbursement will stop if the PEO is unable to continue operations due to insolvency and/or regulatory closure or if the PEO fails to pay penalties or to return fees to students arising from judgements made against it by the Singapore courts.
- Student Tuition Fee Insurance run by NTUC Income
The Student Tuition Fee Insurance indemnifies students for their tuition fees paid in advance to the PEO for the following events:
- when the PEO is unable to continue operations due to insolvency and/or regulatory closure or if the PEO fails to pay penalties or to return fees to students arising from judgements made against it by the Singapore courts, or
- Upon death or total permanent disability of the student.
The number of insurance companies and banks will be expanded in due course.
Student Tuition Fee Account (ESCROW)
- How does the Student Tuition Fee Account (Escrow) work?
CaseTrust and the providers of the Student Tuition Fee Account (Escrow) (DBS and HSBC) have signed a Master Escrow Agreement (MEA) which sets out the rules governing the operation of all escrow accounts opened by the PEOs with the providers. The PEOs who wish to participate in this escrow scheme will have to sign on to the MEA.
When a PEO signs on to the MEA, the bank will arrange to open a Student Tuition Fee Account (Escrow) for the PEO. The PEO is to ensure that the tuition fees of its students will be paid directly into this account. The tuition fees in the Student Tuition Fee Account (Escrow) will be held on trust by that PEO for the benefit of the students.
As part of the course application process, the student will have to sign a prescribed form (Student Escrow Confirmation - Schedule 7 of MEA) confirming that he/she agrees to be bound by the terms of the MEA and that both the PEO and the student will abide by the tuition fees payment schedule.
Thereafter, prior to payment of the tuition fees, the PEO will have to issue a prescribed form (Payment Voucher - Schedule 6 of MEA) to the student stating the details of the tuition fees to be paid for the particular instalment. This Payment Voucher is to be submitted to the bank along with the student's tuition fees payment.
The bank shall disburse the tuition fees in the Student Tuition Fee Account (Escrow) to the PEO in accordance with the payment schedule.
- Is the Student Tuition Fee Account available for local students?
The Student Tuition Fee Account is non-discriminatory to local students and PEOs can decide to cover their local students under the Student Tuition Fee Account.
- Under what circumstances will the Student Tuition Fee Account (Escrow) scheme be suitable for PEOs?
The Student Tuition Fee Account (Escrow) scheme is suitable for PEOs that want a solution to help them reconcile their student fee payments. It is also suitable for PEOs that do not qualify for the Student Tuition Fee Insurance scheme.
- What types of fees will need to be paid to the Student Tuition Fee Account (Escrow)?
Only the tuition fees have to be paid into the Student Tuition Fee Account (Escrow). Tuition fees means the gross payment (before any commission may be deducted) relating to all costs of a course paid by an international student.
Other fees such as accommodation expenses, examination fees and administrative fees do not have to be paid into the Student Tuition Fee Account (Escrow).
- What happens when there is a dispute between the PEO and the international student regarding the tuition fees paid into the Student Tuition Fee Account (Escrow)?
The PEO or the student shall refer the dispute to CASE Mediation Centre for mediation with the aim to resolve the dispute amicably.
Student Tuition Fees Insurance
- Is the Student Tuition Fee Insurance provided by all PEOs?
No. This insurance coverage is available only with PEOs that have applied and are approved by the insurance company endorsed by CASE (ie. NTUC Income).
- What is the period of insurance offered by the Student Tuition Fee Insurance?
The period of insurance will at least cover the entire duration of the course enrolled by the insured student. In certain cases, this period may begin before the course commencement date, upon approval by NTUC Income of PEO's application for insurance.
- What is the expected amount of insurance premium and how is it calculated?
For NTUC Income, the premium is calculated based on the course fees payable. NTUC applies a low premium rate of 0.15% per month multiplied by the course duration in months, and such premium rate is capped at 3% regardless of the duration of the course.
So the premium payable for a 36 month course will be:
With the 3% cap on premium rate
Full tuition fees X 3%
Without the 3% cap on premium rate
Full tuition fees X (0.15% X 36 months) = Full tuition fees X 5.4%
Premiums payments must be made before the insurance documents are issued to the PEO. Premium rates are subject to change without notice from time to time at the discretion of NTUC Income.
- How does a student make a claim?
The insured student needs to produce his/her Certificate of Student Insurance and official course fees receipts when submitting a claim under the insurance. NTUC Income will notify all insured students of the relevant claims procedures to be followed.
- Is the Student Tuition Fees Insurance available for local students?
The Student Tuition Fees Insurance scheme is non-discriminatory. It is up to the PEOs to decide whether to cover their local students under this scheme.
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