COUNT ON ME SINGAPORE Sum of the things that make us Singaporean


These days, it seems like everyone in Singapore goes to university. As fellow kiasu Singaporeans, we get it.

But what if you can’t afford the fees?

Should you first work for 2 years at a lower salary to earn enough to pay for the fees; or take up a student loan at 4.5% simple interest and earn a higher salary later?

Let’s assume that you will earn $3,300 per month with a degree, and $2,700 without. We’ll estimate that university fees cost $7,500 a year, and will take you 4 years to complete. A final assumption – all your earnings will be channelled into paying for your fees.


Over 4 years, going to university will cost you
4 x $7,500 = $30,000.

If you work for 2 years beforehand, you will earn
24 months x $2,700 = $64,800

So the balance that you will have if you pay for university with your salary is
$64,800 – $30,000 = $34,800

Now, let’s find out how much you’ll need if you take a loan first to finance your study. To find how much your interest would add up to, we will use the formula for calculating interest.

Formula for finding simple interest

i = P x R x t

Where i is the total interest to repay, P is the principal, R is the interest rate, and t is the number of years

So if you take a student loan at 4.5% interest, over 4 years it will cost you (together with your original $30,000)
$30,000 + (30,000 x 0.045 x 4) = $35,400

If you work for 2 years after that, you can earn
24 months x $3,300 = $79,200

So the balance that you will have after you pay off the study loan with your salary is
$79,200 – $35,400 = $43,800

Weighing the two options, it would seem that taking a student loan and studying to earn a higher salary after that is the better choice, compared to working first in order to pay for school.