CPF Education Loan Repayment

CPF Education Loan Repayment: Borrowing and Repaying for Your Education

University and polytechnic fees are quite expensive, and there’s a possibility that parents might not be able to pay for their child’s tertiary education with the cash they have on hand. Luckily, the parents’ OA, or their CPF Ordinary Account, and the CPF funds in it can come in handy in handling these tuition fees.

You can finance using the CPF Education Scheme. CPF members get the opportunity to not worry about university and polytechnic fees by using their CPF OA savings as financing with flexible repayment terms and low-interest rates.

CPF Education Scheme loans are advantageous, but, as they are loans, they aren’t free money, and they need to be repaid eventually. This article will go over the CPF Education Scheme, how it works, how you can apply, and how you can repay it.

What is the CPF Education Loan Scheme?

The CPF Education Scheme allows a CPF member to use their CPF Ordinary Account (OA) savings to pay for their own tuition fees or that of their children or spouse.

CPF members may also use their OA savings to pay for a sibling’s or a relative’s subsidised tuition fees, but CPF Board will assess the application on a case-by-case basis.

Only specific courses/institutions fall under this scheme the CPF education loan can finance. If the institution or course does not fall under this scheme, you may have to approach other financial institutions or the chosen educational institution itself for other financing options.


Eligibility for Using the CPF Education Loan Scheme

The criteria for using your CPF Ordinary Account funds for the CPF Education Scheme is simple. CPF members simply:

  • Must have enough CPF funds in their Ordinary Account that they can withdraw.
  • Must be choosing a course that is a full-time diploma/degree program at one of the Approved Educational Institutions (AEIs).
  • Must be using their CPF funds to pay for the tuition fees of either themself, their children, or their spouse.

However, suppose you are paying for your relatives’ tuition fees (sibling, parent, and other extended family members). In that case, you can use your CPF Ordinary Account to pay for a percentage of their tuition fees.

The percentages are as follows:

  • 10% if your relative(s) is studying at a university;
  • 25% if your relative(s) is studying at a polytechnic or pursuing a Technical Engineer Diploma (TED) or a Technical Diploma in Culinary Arts at Institute of Technical Education (ITE); or
  • 50% if your relative(s) is studying at an art college.

Full-time students that pay subsidised fees for a degree or diploma course awarded by the Approved Educational Institutions are also eligible for the CPF Education Scheme.


Tertiary Schools Eligible for the CPF Education Loan Scheme

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


How much can I use from a CPF account?

The amount you can use under the CPF Education Scheme is limited by the Available Withdrawal Limit, whichever is lower between the current balance of your CPF OA or 40% of your cumulative savings in your CPF OA.

The cumulative savings are calculated by taking your current balance and adding your earlier CPF withdrawals spent on investments and education. If you’ve used your CPF OA to pay for properties, the amount will not be counted.

CPF members 55 years old or above will have set aside their Full Retirement Sum within the OA. The Full Retirement Sum is set twice that of the Basic Retirement Sum, which is the minimum suggested amount in a CPF retirement account.

The Full Retirement Sum can be set aside fully with cash or with at least the Basic Retirement Sum in cash in addition to property. This is to ensure that the funds will be kept safe in the CPF retirement account.

The remaining amount after everything that has been set aside can be used for the CPF Education Scheme loan subject to the Available Withdrawal Limit.

For more information regarding your retirement funds, you can visit the CPF website here.


How does the CPF Education Scheme Loan Repayment work?

The student is in charge of repaying the loan; after all, they would be dipping into their relative’s retirement fund.

Repayments will start one year after graduation or upon premature termination of studies, whichever is earlier. The CPF Board will notify the student after they graduate, informing them of the amount due. The notification also marks that the first monthly installments of repayment will start in 3 months and include a GIRO form.

The student may choose to repay the monthly instalments over a maximum period of 12 years or in one lump sum a year after their graduation. But should the account owner agree and is eligible, repayment can be waived so the student wouldn’t have to pay.

Waiving Repayment of the CPF Education Loan Scheme

If the student got financing from their parents’ OA (or their own, or their relative’s), they could choose to avoid to pay if:

  • The owner of the OA used for funding is at least 55 years old;
  • They have already set aside the Full Retirement Sum.

This means that as long as there is enough money left in the OA for retirement, the family can decide to stop repayment. If the account owner is not 55 years old, the borrower will have to wait until the owner turns 55 before the repayments are waived.

You must submit an application form through my cpf Online Services – My Requests using your Singpass.


Other Things To Know

1. Can I use my parent’s CPF to repay the CPF Education Scheme loan?

If you used your parents’ CPF to fund your college education, you don’t have to as long as they meet the criteria above for waiving repayments. Otherwise, you are responsible for repaying the remaining balance along with accrued interest.

2. Can CPF Savings Accounts be used for the CPF Education Scheme?

Savings accounts are specifically for retirement purposes, and as such, cannot be used for anything other than the owner’s retirement fund.

3. What is the interest rate for CPF education loans?

Interest on the loan balance is computed based on the prevailing Ordinary Account (OA) interest rate.  You can find those figures here

4. Do I need to pay back my or my parent’s CPF?

As mentioned above, you have the option of waiving the loan to avoid paying.

However, it is essential to note that paying the balance and the added interest goes directly into your parents’ retirement fund.

5. Can both parents’ CPF be used for the CPF Education Scheme?

More than one person can make CPF withdrawals from the cash in their CPF funds; as such, both parents’ CPF OAs can be used to pay for the same child.

In this case, deductions will be made in the order the applications are received –if the first parent does not have enough funds in their account to fully cover the tuition fee that is due, only then will the second parent’s account be used.

6. How to pay back a CPF Education Scheme loan?

You have to complete and return the GIRO form by the deadline stated in the letter to allow us to process your application. By returning the form, you have agreed to the rate indicated in the letter.

You may only use one bank account for paying the loan, and you may authorize to use someone else’s bank account for it. To change bank accounts, you need to submit a new GIRO application.

If you are a Post-Secondary Education Account owner, you can also use only your own PSEA savings for full or partial lump-sum repayment of your own loan.

For more information on repayments, visit here.

7. What other financing options can I use for my education?

MOE Tuition Fee Loan

Suppose you choose to forgo using CPF to finance your education or your preferred course/institution isn’t eligible for the scheme, or you want to pay the remaining tuition that you couldn’t cover with CPF. In that case, there is another government-backed financing that you can use.

Students in polytechnics and autonomous universities can apply for the MOE TFL to cover a portion of their tuition fee.

The loan covers all ITEs, and local polytechnics and universities. ITE and polytechnic students can get up to 75% of their tuition, while university students can get up to 90%.

With MOE TFL, you won’t incur interest while you’re studying. So if you can pay the lump sum as soon as repayments commence, you will have gotten the loan interest-free.

MOE can suspend the MOE TFL repayment and interest in periods of economic downturn. Currently, MOE has suspended the TFL repayments and interests from 1 June 2020 to 30 September 2021 to support households affected by Covid-19.

Other Financing Options

You can also choose to get education financing from other banks and financial institutions to supplement your existing loan or be your main financing option.

In banks, some of your options are:

  • CIMB Monthly Rest Education Loan (for both local and overseas)
  • Maybank Monthly Rest Education Loan (for both local and overseas)
  • POSB Further Study Assist
  • OCBC FRANK Education Loan

Check out the Best Study Loans in Singapore.


The Bottom Line

The CPF Education Scheme is the financing option for education, with the lower interest rates and the opportunity to add cash to one’s CPF savings when repaying.

If you aren’t eligible for the scheme or need another loan to cover the remaining tuition that the scheme couldn’t cover, you can request loan quotes from Instant Loan for other financing options.

We are a loan comparison service dedicated to finding the best solution to find you the best financing option to help pay for your education from a curated selection of the top-rated financial institutions in Singapore.

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