8 Things I Wish Someone Had Told Me Before I Signed My Scholarship Agreement

by BOBBYONG on May 19, 2013, 4 comments Some of you are aware that I was awarded the Sime Darby Foundation Scholarship after my ALevels and I am currently serving my 5-year scholarship bond. A few days ago, I commemorated my 7th month on the job and I would like to spend some time writing about the things I wish I was more aware of when I was 19 years old before I inked my signature on the contract some 4 years ago.

1. The Scholarship Value is a Very Large Amount of Money

When I signed my scholarship agreement in mid-2009 to UCL, I just knew that studying in the UK is expensive. What nobody tried to put into sense to me was, IT IS VERY VERY EXPENSIVE. For my 3 years of studies in the UK, it is worth about US$150,000 (RM450,000) as it covered tuition fees and living allowances.

The scholarship value could buy a double-story detached house in the suburbs of Kuala Lumpur or a massive bungalow in one of the smaller towns of Malaysia. With starting salary of about RM2,500-3,000 per month (~RM30,000 per annum) for a fresh graduate in Kuala Lumpur, it is worth nearly 15 years annual salary for a fresh graduate to fund the cost of studying in the UK.

2. The Scholarship Bond Period is a Very Long Period of Time

My scholarship bond period is 5 years and many people will say that it is short compared to other scholarships bond period. But 5 years is a very long period of time. It represents 50% of your twenties. Being tied down to a single company in a single location for 50% of what is supposed to be the prime of your life removes a lot of freedom associated with your twenties. You cannot just simply move to a different country, company, job type or lead an alternative lifestyle because you have essentially tied down your future to that job.

3. You Will Change a Lot After Going Through University

Your interest and aspirations will very likely change after going through university,regardless of where or what you studied, with or without a scholarship. What you thought would be a perfect job or opportunity as a late teenager may differ from your point of view of a perfect job as a fresh graduate. Your horizons will broaden and your interests change and you will feel like doing a different thing post-graduation. With a scholarship bond, you will be placed in a job that requires your skills due to business demand and sometimes you may not fancy the job role, company, industry or subject matter any more after university.

4. It Does Not Make Business Sense To Sponsor A Student for Overseas Education
It costs about RM400,000 to RM1 million to sponsor a student to US, UK or Australia for studies. This does not make business sense to any organisation at all. A simple returns on investment calculation will suggest that you need to create discounted business value throughout your scholarship bond period over the amount invested on you for the investment to be worthwhile.

It is highly unlikely that any scholar could generate that much business value from an entry level position during the bond period. If it makes business sense to sponsor students abroad, all the big firms would be doing it. Besides, the risks are high as many scholars fail to perform at school and at work. That is why most scholarships are given from the Corporate Social Responsibility budget i.e. in other words, you are a charity.

5. Your Parents Want What is Safe for You, Not What is Best for You
This is perhaps the biggest revelation to me. Your parents will tell you they want what is best for you, but really, what they mean to say is they want what is safest for you. Your parents will urge you to take up the scholarship while playing down the long bond period because that is the safest option. Its an overseas education experience versus working experience tradeoff. You get immediate benefits while deferring the payoffs to a later date. You get a free US$150,000 education without having to worry about money and you are sorted with a job after graduation. That is safety to most people.

6. There Is No Free Lunch In The World

When I applied for scholarships post A-Levels, I viewed scholarship bodies as banks giving out free money for me to go study. What I definitely forgot to factor in was banks DO NOT give out free money. They give out loans and you are expected to pay back what you borrowed plus interest.

In many sense, the scholarship bond has taught me a lot about debt and its crippling effect if not used properly. When you buy a house or car on loan, the bank essentially owns the purchase because it is a collateral by itself. In a scholarship agreement, you are essentially a resource to

the organisation and can be deployed to any business unit according to the business requirements. The unfortunate part is, your deployment may or may not be to your liking.

7. You Are Very Lucky

If you received a scholarship, the first thing you should do is count your lucky stars. Do not even try to rationalise that you deserve the scholarship because frankly you dont. Winning the scholarship simply says that you fit all the criteria that the scholarship bodies are searching for. Im sure there are many other smarter people who just do not fit the scholarship criteria.

8. Pray That You Join a High-Performing Team with a Good Boss

This is probably the single biggest factor in whether you will feel happy serving your scholarship bond. Getting into a high-performing team with a great boss is really a matter of luck. If you found a good fit, you will be able to perform on your job. Very importantly, be nice to the HR personnel handling your scholarship file. They know which departments fit your personality and they know the vacancies available in good teams.

The corporate world is not created equal. Good bosses and jobs with good prospects are not found everywhere. So far, I can say that Ive been one very lucky guy to join a dynamic team in HR Systems pioneering HR Analytics in the Group. We are probably one of the earliest companies in Malaysia to dabble in HR Analytics and being a pioneer in your industry is almost always a good thing. I can only count my lucky stars every single day that Im serving this bond.

Now dont try to misinterpret this by saying that Im not grateful for the opportunity to study abroad provided by the scholarship. The fact is I cant be grateful enough for the opportunity. I would have had a very different life and would not be able to expand my horizons meeting all the interesting people in London and travelled extensively across the world had it not been for the scholarship.

At the end of the day I think the scholarship decision is really about the positives of having an overseas education versus the negatives of being tied down with a scholarship bond . I wished I was more aware of the other side of the scholarship coin so I could better appreciate my university experience. This Singapore Scholarship Guide I bumped into a few months ago is pretty useful and talks about roughly similar topic in greater detail.

In Economics, it is a basic assumption that people optimise their utility (happiness) subject to their constraints. This is not always the case in real-life because the rationality and perfect information assumptions do not always hold true. I can safely say that in my case, there is no way I can optimise any further with my career so far.

Anonymous on May 19, 2013 at 6:11 pm

I agree with some of the points here but I think a lot of this is based on your experience. This was my experience:

- Its an overseas education experience versus working experience tradeoff: Disagree, my working experience is much better because of my academic experience. If I did not take the scholarship, I would not be where I am

today in the working world.

- It does not make business sense for companies: Debatable. Companies get tax incentives/savings and companies who know how to spin it well also get good PR. The company that gave me my scholarship is doing great because they have really good talent in their firm now unlike the competition. Hard to put a dollar amount on all these soft benefits, but I for one just made a critical decision that saved the company a few million dollars, and Ive worked less than 5 yrs.

- Your parents want what is safest not best: Your parents gave you the best academic experience, it is up to you to capitalize on it. I studied in the US and have friends who did extremely well in school with their scholarship. They were able to get six figure (USD) jobs. They paid off their bond in 2-3 yrs. Within 5 yrs most of them

have gone on to triple their salary. If you are not as lucky as them, you could still at least score a decent 5 figure salary (USD) job. Many bonded scholarships give you the option of breaking your bond and paying back a discounted portion or a fixed monthly amount. In the end there are many ways you could have used your great education to get a better job / pay back ur bond.

Reply

Adrian on May 20, 2013 at 12:06 am

Hi Bobby,

Nice article, however some comments.

2. The Scholarship Bond Period is a Very Long Period of Time. Yes indeed it is a very long period of time [Depending on what you do during those years]. For those stuck in a single entity company then it probably is true that they cant shift around, at most in different departments. But in a conglomerate, at least there are different fields to choose from, and although they are owned by Sime and have Simes culture in then [to a certain extend]. And you can move to another country, if that entity wish to hire you, its not impossible but highly unlikely cause its easier for them if they hire one of their own.

4. It Does Not Make Business Sense To Sponsor A Student for Overseas Education. This I have to disagree. Under INCOME TAX ACT 1967 (ACT 53) Part 1 Paragraph 23 - Any sums paid by way or in the nature of a scholarship or other similar grant or allowance to an individual, whether or not in connection with an employment of that individual. are tax exempted. So technically, to a certain extend [cause this just reduces the taxable income and not the taxable amount] the company isnt paying that much. It is more costly to steal someone from a different organisation to fill in a particular role, with the company paying the resignation cost, for immediate transfer, re-train them and instills the companys culture to them. As a scholar, attending various camps and trainings, we have the culture drilled into us, moulding us into the ideal human resource for the company.

Of course they are investing for the later stage [in which they hope you will stay after you have finish serving your bond], and thats where their return really comes in exponentially. [Of course within the first 5 years, you would have contributed to somewhat of the invested value].

All in all, I hope people reads this more before deciding on accepting a scholarship. The question then [after deciding to accept the scholarship] will be, which company can actually benefit me most during my bond years? Theres no free lunch, however I believe we can eventually turn it into a win-win situation for both parties.

Reply

massive_attack on May 21, 2013 at 12:51 pm

Hi Bobby I can feel your emotion writing this article but allow me to share with u some of my thoughts. First of all, I am a post A-Levels student too. Maybe u think that this scholarship is not the best choice that u had taken. Perhaps u think that holding an A-Levels cert, u should have opt for better opportunities, but let me mind u, I think it iwill be acceptable to say that A-Levels itself is a very competitive level of study, lots of

fabulous people are doing A-Levels. To get a sponsorship, I would say is 50% performance & another 50% rely on luck. So, be grateful that u are capable enough to convince others to offer u a scholarship. Secondly, studying overseas will definitely be expensive. Maybe u are complaining because of the financial burden that your family needed to face for your study. But the most valuable thing was the opportunity to study abroad, can u buy that even if u are rich? Do u think that the huge amount of money debt that u are tied to doesnt worth u going abroad? Again, be grateful that u had the chance, and to be honest, that 5 years bond is not really much. My advice to u is dont take it as a bond & u will leave after that, might as well try to discover if u can develop your career from there in the future.

Lastly, I read your complaints about the university life & working now. Im currently an undergrad studying abroad too. Like u said, our interests change when we enter university, that Im doing a field that I never expected, it is not my interest as well, but thats life, u cant always get what u want, instead, we should just accept whatever that comes & see how we can turn it around into our own favour. Having said that, I do feel sorry for u if the company was trying to make u their assets through the study cause I find that unacceptable too. About your current working life, I can tell it will be hard, again, thats life, its part of learning. At least u got a job now when the unemployment of fresh grads is quite high out there right now. At the end of this, my view is that life is about balancing the gains & losses. We cant always hope that things work the ways we wanted, accepting the unwanted is how we learn. Like u said, there is no free lunch in this world, u gain benefits from the oversea study, now is time for u to face the losses. I took A-Levels too but Im noy good enough to gain a scholarship, yet after my study, whether or not I can get a job after my study is another question. So take a look at yourself, someone helped u to study abroad & now u got a job, u are on the right track my friend. Have u ever asked yourself where will u see yourself right now if u didnt accept that scholarship? Look at the good sides & think less about the bad sides, thats the way for people to move on & be happy. What will come in the future? We dont know, so just do your best in whatever u are doing now & hope that your hardworks will pay off someday. Good luck my friend. =)