Education Scheme Handbook

Education Scheme

The Education Scheme helps you pay for your children's or your own local education at approved institutions.



	1.	What courses are covered by the scheme?
	2.	Why does the scheme cover only full-time courses?
	3.	Why doesn't the scheme cover postgraduate courses?
	4.	Why doesn't the scheme cover overseas studies?
	5.	How does the scheme work?
	6.	How much CPF savings can be used under the scheme?
	7.	Why must I set aside the Minimum Sum before I can use my CPF for investment and education? Will the Minimum Sum be revised annually?
	8.	Whose CPF savings can be used?
	9.	Can CPF savings be used to repay an outstanding education loan?
	10.	Does the scheme allow reimbursement of tuition fees already paid?
	11.	Is a guarantor required?
	12.	What are the responsibilities of a guarantor?
	13.	When does repayment start?
	14.	How much does the student have to repay?
	15.	If I use my own CPF savings, why must I repay the CPF savings withdrawn?
	16.	Can I use my CPF savings to repay the monies withdrawn?
	17.	Under what circumstances can I apply to waive the repayment by the student?
	18.	If I choose not to waive the repayment, what will happen to the repayments made to my CPF Account?
	19.	I would like to use my CPF savings to pay for my child's education at an approved institution. How do I apply?

1. What courses are covered by the scheme?

The scheme covers all approved full-time undergraduate courses leading to a degree at Nanyang Technological University, National University of Singapore, and Singapore Management University; and approved full-time diploma courses at LaSalle-SIA College of the Arts, Nanyang Academy of Fine Arts, Nanyang Polytechnic, Ngee Ann Polytechnic, Singapore Polytechnic and Temasek Polytechnic.

Part-time courses, postgraduate courses and overseas education are not included in the scheme.

2. Why does the scheme cover only full-time courses?

The scheme is meant for full-time students who have no income and hence are likely to have difficulties paying their tuition fees with their own savings. Most of these are young adults going straight from school or national service to the universities, polytechnics or arts colleges.

Part-time courses are generally tailored for working adults who are in a better position to pay their tuition fees as they have incomes of their own. If they do not have sufficient savings for a part-time course, they can defer it for a short period of time and build up enough personal savings to pay for their course fees later.

Part-time students can, therefore, plan ahead with greater flexibility to ensure that they can meet the tuition fees.

3. Why doesn't the scheme cover postgraduate courses?

Allowing CPF to be used for full-time studies in local tertiary institutions was a special consideration made in 1989 to help low income families support themselves or their children through local tertiary education. Students who have graduated would then have earning capabilities, which enable them to build-up their savings for further studies. Universities also have various schemes, like the tuition fee loan scheme, to help students pay their tuition fees.

4. Why doesn't the scheme cover overseas studies?

Local education at approved institutions is heavily subsidised and students should thus be able to repay the CPF loan.

On the other hand, overseas education is very costly. If the student is unable to repay the CPF loan, it would have serious consequences on the parents' or his own retirement savings.

5. How does the scheme work?

Under the scheme, you can use the CPF savings from your Ordinary Account to pay for your children's or your own tuition fees related to these courses. The student will have to repay the amount withdrawn plus interest.

6. How much CPF savings can be used under the scheme?

You can use up to 80% of your CPF balance# in excess of the Minimum Sum or the remaining balance of the Ordinary Account (after setting aside the required cash component of the Minimum Sum in the Special and Ordinary Accounts), whichever is the lower.

However, if you also wish to use CPF for investment, then the amount of CPF you can use for education will be reduced accordingly.

# This CPF balance is made up of your savings in the Ordinary and Special Accounts and the amount of CPF which you have withdrawn for housing, education and investments.

Please see example below:

EXAMPLE -
	Case1 $	Case 2 $	Case 3 $
Ordinary Account balance	40,000	30,000	40,000
Special Account balance	15,000	20,000	35,000
CPF withdrawn for housing	30,000	45,000	70,000
CPF withdrawn for investment and education	0	20,000	20,000
Total CPF balance	85,000	115,000	165,000
Less: Minimum Sum (as at 1 July 2000) ($25,000 in cash) ($40,000 in property)	(65,000)	(65,000)	(65,000)
Investible savings (CPF balance in excess of the Minimum Sum)	20,000	50,000	100,000
80% of Investible savings	16,000	40,000	80,000
Less: CPF withdrawn for investment and education	(0)	(20,000)	(20,000)
Available Withdrawal Limit (AWL) for education	16,000	20,000	60,000	(A)
Ordinary Account balance	40,000	30,000	40,000
Less: Minimum Sum Cash Component to be set aside in the Ordinary Account	(10,000)	(5,000)	(0)
Net Ordinary Account balance	30,000*	25,000*	40,000*	(B)
Amount available for education (Lower of 'A'or 'B' figure)	16,000	20,000	40,000

* This is what is left in the Ordinary Account after setting aside the $25,000 Minimum Sum cash component.

Case 1: $15,000 from Special Account and $10,000 from Ordinary Account

Case 2: $20,000 from Special Account and $5,000 from Ordinary Account

Case 3: $25,000 from Special Account and $0 from Ordinary Account

7. Why must I set aside the Minimum Sum before I can use my CPF for investment and education? Will the Minimum Sum be revised annually?

The Minimum Sum serves as a safety net. It ensures that you have sufficient funds for subsistence living during old age. The Minimum Sum will be revised annually as follows:

Year	Minimum Sum ($)	Amount in Cash ($)	CPF Withdrawn for Property ($)
1 July 2000	65,000	25,000	40,000
1 July 2001	70,000	30,000	40,000
1 July 2002	75,000	35,000	40,000
1 July 2003	80,000	40,000	40,000

8. Whose CPF savings can be used?

A student can use both his own CPF savings (if he is a CPF member) and his parents' (including step-parents') savings. The Board will only consider the use of a sibling's or spouse's CPF savings on a case-by-case basis. For such cases, the student is required to write in stating his reasons for his request as well as submit documentary evidence such as birth, marriage and death certificates together with the application form.

When more than one person's savings are used, the withdrawals will be deducted in the order the application forms are received and processed, e.g. the first parent to apply to use his savings will pay first. The second parent will pay only when the first parent's savings are not enough.

If the parents are paying for more than one child, the savings will also be withdrawn in the order of application, e.g. the savings will be used to pay tuition fees for the first child to come under the scheme, and then only the second child, and so on.

If during any year the savings are not enough, the student will have to pay the shortfall in cash.

9. Can CPF savings be used to repay an outstanding education loan?

No, CPF savings cannot be used to repay any outstanding education loan.

10. Does the scheme allow reimbursement of tuition fees already paid?

No, CPF savings can only be used for fees that are due. Payment will be made directly to the approved institutions.

11. Is a guarantor required?

Yes, a guarantor is required and he must:

be a Singapore citizen or permanent resident;
be gainfully employed with a monthly income of at least $500;
be between 21 and 60 years old; and
not be an undischarged bankrupt.

The person using his CPF savings to pay for the tuition fees cannot act as the guarantor.

12. What are the responsibilities of a guarantor?

If the student fails to repay the amount withdrawn and the interest, the Board will have to take action to recover the repayments from the student. If the student is still unable to repay, the guarantor will then be required to repay the CPF savings withdrawn plus the interest which the student owes.

13. When does repayment start?

Repayment will start one year after graduation or on leaving the course, whichever is earlier.

14. How much does the student have to repay?

The student has to repay the full amount of CPF savings withdrawn and the interest from the time the savings are withdrawn. The interest, the which is at the prevailing CPF interest rate, will be credited into the CPF account of member whose savings had been used. The repayment can be made in one lump sum or monthly instalments over a maximum period of 10 years. For outstanding amounts of less than $9,000, the minimum repayment per month is $100.

15. If I use my own CPF savings, why must I repay the CPF savings withdrawn?

CPF savings are primarily meant to provide for your old-age needs. The scheme allows a temporary use of the savings for education. You should therefore repay your CPF savings as though it had never been withdrawn.

16. Can I use my CPF savings to repay the monies withdrawn?

No, all repayments must be in cash. CPF savings cannot be used for repayment.

17. Under what circumstances can I apply to waive the repayment by the student?

You may apply to waive the repayment if you meet the following conditions:

1.		You are aged 55 and above, and
2.		You have set aside the full Minimum Sum.

CPF members who have withdrawn their CPF for their own education, need not apply separately for the waiver. The Board will waive the repayment upon their application for withdrawal of their CPF at age 55 provided they have set aside the full Minimum Sum.

Members who used their CPF for their children's education need to make an application if they want the repayment to be waived. The application should be made only after the student has graduated or left the approved institution and is expected to begin the repayment.

The waiver will include the total CPF withdrawn and the interest the member would have earned had he not used his CPF for education. It does not include the amount that has already been repaid by the student and the amount used for his current course of study (if any).

To apply, simply complete form AES/WI which is available at all CPF offices and return the form to the Board. The Board will notify you once your application has been processed.

18. If I choose not to waive the repayment, what will happen to the repayments made to my CPF Account?

The repayments will form part of your total CPF savings which you can withdraw if you are eligible to do so under the existing CPF rules.

19. I would like to use my CPF savings to pay for my child's education at an approved institution. How do I apply?

Application forms are available at the approved institutions. A completed form should be submitted to the institution that your child is registered with before the closing date specified by the institution.

The Board will inform you of the deductions made from your CPF Account. For subsequent semesters, the tuition fees will be automatically deducted from your CPF Account and you will be informed accordingly. An administrative fee of $10.30* is payable for each payment and will be included in the amount of CPF savings deducted.

*inclusive of 3% Goods & Services Tax.

CONTACT US

FOR ENQUIRIES,
PLEASE CALL 1800-2271188 (Code 4) (TOLL-FREE)
E-MAIL TO lnvestment@cpf.gov.sg
OR FAX TO 229 3375

Updated On 12th September 2000