Students in Singapore might hurdle the obstacle to funding their polytechnic or university education through their parents’ CPF Ordinary Account Savings.
Central Provident Fund (CPF) is a mandatory benefit account providing retirement earnings and healthcare for Singaporeans. Contributions to the retirement account originate from both the employee and the employer.
Even though this money looks like a huge boost, it doesn’t come free as it would have to be repaid from time to time after graduation. This money offers more perks as it is better than taking a student loan.
CPF Ordinary Account Savings to fund education
The first advantage of the fund is that the interest rates are so low that it is sometimes unbelievable compared to what banks charge to get loans. Secondly, the plan mapped out for repayment is very flexible to the ones that a regular financial institution offers you.
The CPF savings scheme allows students who are registered or have been admitted into polytechnics and universities in the country to fund their education if their parents do not have the means. With the new payment for education through their parents’ CPF savings scheme, school dropouts would be reduced.
Students who offer full-time studies from significant institutions in the country are allowed to participate in the program as they would be screened extensively.
To apply, a student has to check when their school window is open for registration. When paying his school fees fulfilling the registration requirements, he should log in and complete the application form on the CPF portal. After completion of the form, a message would be sent to their respective parents and be filled out on or before 14 days.
Waiver options for parents older than 55, students older than 40 years
A student or parent, through this account, can choose to remove the required payment plan, which means the student will not need to pay back the loan amount when the time comes.
This option can be enabled under one condition: if the student’s parent whose account is being used is older than 55 years and has signed that the money would be taken from their pension fund. If this condition can be satisfied, then the repayment would be removed when the student graduates or leaves school anytime.
Students will not be able to choose the waive option if they are not above 40 years as the scheme doesn’t recognize those below the benchmark age as mature enough. The CPF account was generally set up by the commission to aid the holder of the account.
Still, a case when the child uses their parents’ CPF Ordinary Account savings, then it automatically means the child is tampering with their parent’s pension money.