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Wednesday, 10 April 2013

Studying hard to save

If a student studies hard and keeps his results consistently high, he ends up paying very little for his degree at a private institution.

Cost-saving route: With a little homework, students with good grades will be able to secure a partial scholarship at private institutions.

IT is so competitive out there that private universities and colleges are practically beating a path to the high achievers' doors to recruit them.

The better their results, the higher the “discount” in the tuition fees at pre-university level. An SPM student with 8As may get RM4,000 to RM8,000 in scholarship, depending on the institution and course.

In the words of a marketer, “we are almost paying them to study with us.”

Most partial scholarships start with 6As and above, and results like that are pretty common among urban schoolchildren. In fact, one premier private university estimates that 50% to 60% of its students enrol with six to eight distinctions.

And yet, many parents and students are ignorant of how easy it can be to secure partial scholarships if only some homework is done.

For a start, students should make their school counsellors their “best friend”. The counsellors are a gem of information and resource as they are the contact point for foreign and local institutions as well as corporations that wish to offer financial assistance. Every top university targets counsellors of premier schools!

Hence, counsellors at such schools can really make a difference. Those who are committed and passionate ones know what are on offer and constantly hound their good students to put in their applications and go for scholarship interviews.

They know, for example, that a high achiever with strong co-curricular and is able to impress at the interview can secure between RM3,000 and RM18,000 in tuition fee waiver months before he even sits for his SPM exam.

The amount may prove a significant percentage of a pre-university course that is priced at RM18,000 to RM25,000 (tuition fees only).

The best time to get cracking is when private institutions set their “school team” on the hunt in July (till September) to “lock in” the best students for their following January intake. One top university targets 300 schools during this period.

For this “early bird” scholarship, institutions take into consideration the student's first term and mid-year results. And if the actual SPM results prove even better, the university will top up the scholarship quantum. But if the results are worse, there's no refund.

So, students should make it known to their counsellors that they are on the lookout for specific scholarships and be persistent till the end. Most universities won't advertise their scholarships, as they prefer to go through schools.

However, most students only start checking out scholarships after the SPM exam, only to find that deadlines for applications and interviews have come and gone.

Perhaps one reason for their tardiness is that they are still clueless about their area of interest while scholarships are often discipline specific.

If money in the family is tight, seriously consider saving the pre-university fees at private institutions by opting for Sixth Form.

A sixth former also has the benefit of having two pathways before him: public universities and private institutions. If he chooses the latter, what is saved in the pre-university fees can go towards the first year of a private degree.

Note to undergraduates listen, listen, listen

If you've made it to pre-U with a partial scholarship, keep up your grades because that will continue to literally earn you thousands of ringgit each year.

An institution is usually more generous with its scholarship for a continuing student from a pre-university or foundation course into its degree programme, so avoid switching institutions to maximise your scholarship.

For a business degree that costs about RM80,000 over three years, the savings can be 30%, 50% or 75% per year in tuition fees if you keep an average grade of 60%, 65% or 70% respectively. Not a difficult feat, according to a top private institution, as many of their students qualify for 30% to 50% scholarship bracket.

But here's the catch: you have to reapply for the scholarship every year if you meet the grade.

If you don't apply for it, it's your loss! Many just don't realise the “reward” in store.

At one university, a student who maintains a grade average of 70% could end up paying RM26,000 instead of RM78,000, a savings of almost RM60,000 over three years.

If you're not just book smart but also streetwise, you'll find yourself in very good financial standing as a PTPTN (National Higher Education Fund Corporation) loan recipient.

As a business degree undergraduate from a middle income family with several siblings, you may qualify for up to RM16,000 in loan each year, banked into your account. If you spend all your time mugging in the library instead of mucking around and qualify for a 75% scholarship, you end up collecting close to RM50,000 in loan over three years but paying only half of that in fees!

Can you get a better deal than that?

Think what you can do with the difference between the loan amount and the fees that you actually paid. Maximise the 15-year tenure that you are allowed to pay off your loan at PTPTN's current 1% per annum flat rate.

This translates to just RM320 a month based on RM50,000 principal and RM7,500 in interest.

The 1% flat rate that the Government has been offering since June 2008 is so much better than the 3% and 4% per annum on reducing balance prior to that. The interest undergraduates were paying then worked out to be twice the amount.

The 1% flat rate works out to be an “effective” or real rate of 1.9%. Compare that to the effective rate of 5% for a car loan and a mortgage rate of 4%.

It beats any consumer loan you'll ever get and with zero collateral to boot!

So who says a fresh graduate can't have his cake and eat it too?

Note: With the SPM results just out and many still shopping for their courses and scholarships, the writer wishes them “bon appetit”! Feedback is welcome at

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