Meritocracy is one of the foundational values of Singapore, and ensuring that no Singaporean is denied access to education due to financial reasons is an important goal of the education eco-system.
In some countries like the United States, immense college debt is a national issue that is approaching crisis levels.
In this article, we’ll examine the financing options available to Singaporean students to pursue further education.
Apply For Grants And Scholarships First
Before you start looking at loans to take up, check if your chosen institution is among those that allow you to apply for and receive tuition grants from the government. This could be a consideration for some when choosing their institution of study.
In addition to tuition fee grants, a wide range of scholarships and bursaries are given out by individual institutions, faculties, and public and private sector organisations. Some of these come with conditions, such as being contractually bonded to the organisation, while others are given out to successful applicants with no conditions attached.
Finally, if you still have money in your Post-Secondary Education Account (PSEA), you can utilise it to pay part of your tuition fees first. To check your PSEA balance, you can call the Ministry of Education (MOE) 24-hour automated PSEA/Edusave hotline at 6260 0777.
Consider If You Want To Use The CPF Education Scheme
The CPF Education Scheme allows CPF members to use monies in their CPF Ordinary Account (OA) to pay for the tertiary tuition fees for themselves, their children or their spouse. Using it to help their sibling or other relatives is possible with justification on a case by case basis.
In order to ensure the primary mission of retirement adequacy is not compromised, certain rules (like the repayment of accrued interest) have been put in place. If you’re interested to learn more about using CPF to pay for your tuition fees, you can read more details in this article.
MOE Tuition Fee Loan Scheme
The MOE Tuition Fee Loan (TFL) Scheme is an initiative by MOE to encourage banks to offer tuition fee loans under a set of standardised conditions. Full-time Singaporean students of local universities and some polytechnics, except Lasalle and NAFA, are eligible to apply for MOE Tuition Fee Loans.
Under the MOE Tuition Fee Loan scheme, you can borrow up to 90% of the tuition fees payable. Interest is only charged once the student graduates, and the minimum amount of repayment is $100 per month, with a maximum repayment period of 20 years.
DBS, OCBC and UOB all offer the MOE Tuition Fee Loans, but each institution may only partner with some of these banks, so check with your respective school.
Education loans are offered by the majority of banks, and they allow you to pay for your education in private universities in Singapore, as well as overseas universities. For those whose course of study doesn’t have MOE Tuition Fee Loans, or who are not Singaporeans, education loans from banks might be the only viable alternative.
Before you take up these loans, be sure to understand how interest is calculated and the repayment terms, so you can realistically repay the loans when the time comes. It helps to read a refresher on what effective interest rate is.
Like other purpose-specific loans like renovation loans, the money you borrow for an education loan is disbursed directly to the institution, so you won’t be tempted (or able) to spend some of that money. Because of this, the interest rates for education loans are usually lower than that of regular personal loans.
Financing Your Education Requires Future Planning
Taking up a loan is a commitment, and requires you to do meticulous planning about how much you plan to repay, and what to do in contingencies like unemployment or a critical illness.
Thus, before taking up any loan, you should exhaust all other avenues of financing, such as scholarships and grants, and perhaps approach family members who are able and willing to support, and may have more generous repayment schemes.
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