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CPF Education Loan Repayment: The Complete CPF Payment Scheme Guide

CPF Education Loan Repayment
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Singapore’s CPF education loan scheme provides Singaporean parents and retirees funds for education. They can use any amount in their CPF Ordinary Account to pay for their education. Alternatively, they can use it with their permission to fund their spouse or children’s education loan needs.

Today, any CPF member can use their savings to buy a new home or fund anyone’s studies (on a case by case basis) with their permission. Using CPF funds as a tuition loan is like borrowing from banks. It requires borrowers to pay interest over any CPF Ordinary Account repayments. 

Here is everything you’ll want to know about using the CPF education loan scheme to pay for your tertiary tuition fees.

What is the CPF Education Loan Scheme?

The CPF education loan scheme allows CPF members to use their CPF funds to pay tuition fees. Alternatively, members can use the education loan scheme to pay for their spouse or children’s education. Then, the CPF board reviews individual non-member CPF education funding applications.

All members must pay back their CPF ordinary account tuition fee loan. The CPF board imposes an accrued interest on all unpaid amounts. The interest rates urge all borrowers to pay back all CPF Ordinary Account debt to ensure the CPF member receives their CPF funds’ full retirement pot.

Who Can Apply for a CPF Education Scheme Loan?

Singaporeans who fulfill the following requirements can use the CPF education scheme to their benefit. All CPF members must have:

  • Have enough CPF Ordinary Account savings to pay for tuition fees
  • Are using your CPF monies to pay for your own tuition fees
  • Are using the CPF education scheme for their children or spouse’s benefit
  • The member/student is studying a full-time diploma/degree course among the Approved Educational Institutions list
  • The member/student has a government tuition grant for taking their course

Which Schools Are Eligible For The CPF Education Scheme

You can find the complete list of the Approved Educational Institutions eligible for the CPF education scheme below:

  • National University of Singapore
  • Nanyang Technological University
  • Ngee Ann Polytechnic
  • Singapore Polytechnic
  • Temasek Polytechnic
  • Nanyang Polytechnic
  • LaSalle College of the Arts
  • Nanyang Academy of Fine Arts
  • Singapore Management University
  • Republic Polytechnic
  • Institute of Technical Education
  • Singapore Institute of Technology
  • Singapore University of Technology and Design
  • Singapore University of Social Sciences

How Much Can You Spend From Your CPF-OA?

You can only use 40% of your cumulative CPF-OA savings. CPF only approves member applications whose 40% retirement savings can pay for a full course’s total tuition. 

Any CPF members 55 and above must have saved the Full Retirement Sum & have set aside enough CPF-OA cash for the education scheme.

CPF members paying for their spouse, children, or relatives’ tertiary education fees can only pay the following amounts for their relatives.

  • 50% of Tuition Fee: If CPF approved your CPF education scheme application for a relative, you could only use it to pay 50% of their tuition fee.
  • 25% of Tuition Fee: You can only use 25% of your CPF retirement account funds for the CPF education scheme for any relative studying a Technical Engineer Diploma (TED) course or a Technical Diploma in Culinary Arts at ITE.
  • 10% of Tuition Fee: CPF members can only provide 10% to a relative studying at an Approved Educational Institution

How To Apply For a CPF Education Scheme

Here are the steps members have to take to apply for a CPF education scheme.

  1. Log into your CPF account
  2. Look for My Requests
  3. Apply for a CPF Education Scheme
  4. Wait 14 days (or more) to receive your application results
  5. If successful, you can use your CPF savings to fund tertiary tuition fees

How Do I Repay My Spent CPF Savings?

The Singapore government does not intend to divert CPF’s original retirement pot objective. Therefore, they require every CPF retirement account with CPF withdrawals to pay back the sum. A CPF education loan scheme qualifies as CPF withdrawals. 

All borrowers have a maximum period of 12 months after course graduation or premature course termination to pay the total withdrawn amount. CPF will contact all students within three months before the repayments start.

It’s possible to pay back your CPF monthly installments early. You can head to the CPF Website and pay a full lump sum or installment through the My Request facility. You can use your GIRO form and other available payment methods to start your single lump-sum payment or monthly instalments. Students have a maximum of 12 years to pay back their CPF withdrawal completely.

Your CPF-OA withdrawals will gain interest depending on the prevailing interest rates from the time you withdraw. It will continue to accrue every month until you’ve completely paid your CPF debts. CPF provides a repayment and monthly installment calculator to help students find their best payment options.

Am I Required to Repay My Parent’s CPF?

All members must pay back any amount they borrowed from their CPF-OA account. CPF imposes this rule to avoid diverting CPF as an investment or educational fund. If you’ve used half the full retirement sum to fund your CPF-funded course, you’ll have 12 years to pay back everything you borrowed.

We highly advise borrowers to pay early and avoid ballooning debt due to the high-interest rates. CPF’s education funding does have the lowest interest rate versus banks. However, it will still lead to ballooning interest due to missed payments.

What is the CPF Education Waiver

This waiver allows members to waive paying back education fees they borrowed for the education fund. However, members can only do this if they’ve fulfilled the following:

  • They’ve set aside the full retirement sum CPF requires
  • They’re aged 55 and above

The waiver signifies that the retiree’s CPF fund has fulfilled its goal of providing the member a viable retirement sum. Therefore, the parent’s CPF education fund doesn’t require any repayment.

How Can I Avoid Missing CPF Repayments?

Consider any amount you borrow from your OA savings as a bank loan. Schedule all your repayments and set repayment alarms once you’ve received your repayment dates. You can use your bank apps to auto-debit your CPF repayments, too.

GIRO is one helpful payment method to help you avoid missing your CPF repayments. Like bank apps, GIRO has an auto-pay feature that makes payments for you if it has enough funds before the payment date.

How Are CPF Education Schemes Different From Bank Loans?

CPF’s education funds use a small portion of a member’s retirement sum. On the other hand, banks use their monetary reserves to fund your education fees. In addition, banks can pay higher than 50% of your fees. CPF can only pay up to 50%.

However, CPF offers interest rates drastically lower than banks. For example, a typical CPF student loan can have a 1-2% monthly interest rate. On the other hand, banks offer a 4.38% yearly interest rate, a typical 2.5% processing fee, and a shorter repayment period of 10 years.

Can I Use CPF Savings to Study Abroad?

Unfortunately, no. CPF has a list of Approved Educational Institutions you can pay using your retirement funds. Unfortunately, borrowers will find no schools abroad listed among CPF’s roster.

On the other hand, banks offer affordable international study loans for students. Therefore, you can use them to your benefit. However, keep in mind that bank loans have different terms and repayment periods than CPF.

Can I Use My Post-Secondary Education Account (PSEA) to Pay For My CPF Education Loan?

If you have enough funds in your PSEA, you can use it to pay for your CPF education scheme. In addition, PSEA is a great alternative to the CPF education scheme. You’ll find many PSEA-approved educational institutions parallel to CPF’s selection.

Plus, PSEA’s education-oriented funding nature gives you, your spouse, children, or relatives much more opportunities to fund your education fully instead of just a portion of your polytechnic fees. Your PSEA is under the Ministry of Education’s management and has a different set of terms and conditions.

Are There Penalties For Not Repaying CPF Education Schemes?

There are no unpaid CPF education plans in Singapore as of yet. However, if you have unpaid CPF OA-savings repayments, you’ll face consequences similar to missing bank repayments. For example, you might end up paying compounded interest rates after the 12-year repayment period.

On the other hand, the CPF might reach out and discuss alternative payment options with you. For example, if you’ve missed a huge chunk of repayments, the CPF will likely interview you. Then, they may create a plan to help you pay back everything, including interest.

Are There Other Alternatives to CPF to Pay For My Education?

Aside from the CPF-OA education scheme, you can use the following for tuition funding:

  • Government education bursaries for low and middle-income households
  • The Ministry of Education Financial Assistance Scheme (MOE FAS)
  • The SPED Financial Assistance Scheme
  • The MOE Independent School Bursary
  • MENDAKI Tertiary Tuition
  • NUS Study Loan

Licensed Moneylenders: Your Best CPF Education Loan Alternative

If you have poor credit scores, you can use licensed moneylenders as an alternative to CPF education funding. Licensed moneylenders cater to all levels of household income and credit scores. Borrowers can get up to six times their monthly salary. Plus, you can get your licensed moneylender loan on the same day you submit your application form.

You can use Loan Advisor’s services to access a list of high-quality, licensed moneylenders. Loan Advisor can help you find up to three top quotes from Singapore’s best licensed moneylenders with your input. So visit our website and start funding your education today!

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