Paying for higher education in Singapore can feel scary for many families. University and polytechnic fees are not cheap, and parents often worry about how to manage the cost. One common option is the CPF study loan, officially called the CPF Education Scheme.
In this blog, we will explain the CPF study loan in very simple English, so that students and parents can clearly understand how it works and decide if it is the right choice.
You will learn:
- What is the CPF Education Scheme
- Who can use it and for which courses
- How much CPF can be used
- Interest rate and important rules
- Repayment with easy examples and calculations
- Comparison with bank loans and MOE Tuition Fee Loan
- Pros and cons
- Things to think about before applying
- Simple step-by-step application process
- A real-life style case study
What Is the CPF Study Loan (CPF Education Scheme)?
The CPF Education Scheme is a study loan that allows a CPF member (usually a parent, but it can also be the student) to use money from their CPF Ordinary Account (OA) to pay subsidised tuition fees.
The CPF OA savings can be used to pay for the education of:
- Yourself
- Your children
- Your spouse
- Your siblings
- Certain other relatives (if they meet CPF rules)
But very important: this is not free money. Whatever amount is taken out from CPF OA must be repaid in cash later, with interest, back into the CPF OA. So, it is a loan, not a grant or scholarship.
Who Can Use the CPF Education Scheme?
The CPF study loan is only for full-time students in approved educational institutions (AEIs) in Singapore, studying subsidised courses.
These usually include:
- Public universities like NUS, NTU, SMU, SUSS, SIT, SUTD
- Polytechnics (NP, SP, NYP, TP, RP)
- Approved arts schools like NAFA and LASALLE
The course must be subsidised by the Government (for example, with the MOE Tuition Grant). Most private, non-subsidised courses do not qualify.
Also:
- The CPF member (lender) whose OA will be used must have enough money in their CPF OA.
- Normally, the lender should be below 55 years old at the time of application, because after 55, the CPF money is moved to the Retirement Account and is mainly for retirement needs.
How Much CPF Can Be Used for a CPF Study Loan?
CPF does not allow you to use all your OA money freely for education. There is a limit called the Withdrawal Limit.
The amount you can use depends on:
- 40% of the CPF member’s accumulated OA savings, and
- The remaining OA balance after setting aside amounts for other uses like housing.
The CPF Education Scheme will use the lower of these amounts.
Example: How much CPF can be used?
Imagine a parent has:
- Current OA balance: S$80,000
- Amount previously used from OA for investments/education: S$10,000
Total accumulated OA savings, for this purpose, are:
- S$80,000 + S$10,000 = S$90,000
Now we take 40% of S$90,000:
- 40% of 90,000 = S$36,000
So, the maximum that can be used for the CPF Education Scheme is S$36,000, if there are no other restrictions like housing set-asides.
If the total tuition fees for a 4-year course are S$32,000, this can be fully covered by the CPF Education Scheme.
If the total tuition fees are S$50,000, then only S$36,000 can be covered by CPF, and the remaining S$14,000 must be paid by other methods (like cash, MOE Tuition Fee Loan, or bank loan).
Interest Rate of the CPF Study Loan
The interest rate for the CPF study loan is the same as the CPF OA interest rate. It is not a special or separate rate.
Currently, the CPF OA interest rate is 2.5% per year (p.a.).
Key points to remember:
- Interest starts from the moment the money is taken out of the OA to pay your tuition fees.
- Interest is calculated monthly and compounded yearly.
- You must repay both the principal (original amount) and the interest in cash to the CPF OA later.
This means that the longer you take to repay, the more interest you will pay.
Repayment Rules for CPF Education Scheme
The repayment structure is quite clear and fixed.
You start repaying the CPF study loan one year after:
- You graduate, or
- You leave the course (e.g., withdraw early),
whichever happens first.
You can choose to repay:
- In one lump sum, or
- Through monthly instalments, over a maximum period of up to 12 years.
Some important points:
- The minimum monthly repayment is usually S$100 for balances up to S$10,000 (this may differ slightly by policy and changes).
- All repayments must be made in cash (you cannot use your own CPF to repay the loan).
- In some situations, you may be able to use your PSEA (Post-Secondary Education Account) to repay, if allowed.
CPF also has an online Education Loan Repayment Calculator where you can estimate your monthly instalments or total repayment period based on the loan amount and interest rate.
Simple Repayment Examples and Calculations
Let’s look at some simple examples to understand how much you may need to repay each month.
Note: These are simple estimates to help you understand. Actual amounts may be a bit different because of exact formulas, monthly compounding, and possible changes in interest rate.
Example 1: Loan of S$20,000 over 10 years
- Loan amount: S$20,000
- Interest rate: 2.5% per year
- Repayment period: 10 years (120 months)
The approximate monthly instalment is around S$188–S$190.
Let’s take S$189 per month for easy calculation:
- Total paid over 10 years = 189 × 120 = S$22,680
- Total interest = 22,680 − 20,000 = S$2,680
So, for a S$20,000 CPF study loan, you might pay around S$2,680 in interest over 10 years.
Example 2: Loan of S$10,000 over 5 years
- Loan amount: S$10,000
- Interest rate: 2.5% per year
- Repayment period: 5 years (60 months)
Monthly instalment is roughly around S$177–S$179.
Let’s use S$178 per month:
- Total paid = 178 × 60 = S$10,680
- Total interest = 10,680 − 10,000 = S$680
So, for S$10,000 over 5 years, you may pay about S$680 in interest.
From these examples, you can see:
- Longer repayment period → lower monthly payment but more total interest
- Shorter repayment period → higher monthly payment but less total interest
CPF Study Loan vs MOE Tuition Fee Loan vs Bank Education Loan
When planning education finance, you may compare:
- CPF Education Scheme (CPF study loan)
- MOE Tuition Fee Loan (TFL)
- Bank or personal education loans
CPF Education Scheme
- Uses CPF OA funds of the parent or student.
- Interest rate is the CPF OA rate (currently 2.5% p.a.).
- Interest starts from the time the CPF is used.
- Must be repaid in cash within 12 years.
- Affects the parent’s retirement and housing funds, because CPF OA balance is reduced.
MOE Tuition Fee Loan (TFL)
- Offered by banks (like DBS, OCBC, UOB) but supported by MOE for public institutions.
- Can cover up to 90–100% of tuition fees (depending on course and school).
- Interest usually starts only after graduation.
- Interest rate is often linked to bank rates, which may be higher than 2.5%.
- Repayment period can sometimes be longer than CPF loans (e.g., up to 20 years for some university programmes).
Bank or Personal Education Loans
- Provided directly by banks.
- Interest rate is usually higher, for example 4%–7% or more per year.
- They may allow you to borrow money not just for tuition, but also for living expenses, laptops, etc.
- Monthly instalments can be higher because of the higher interest.
Simple Comparison Table
| Feature | CPF Study Loan | MOE Tuition Fee Loan | Bank / Personal Loan |
| Source of funds | CPF OA (parent or self) | Bank (with MOE support) | Bank |
| Typical interest rate | ~2.5% p.a. (OA rate) | Varies, often higher than 2.5% | Usually 4%–7%+ p.a. |
| When interest starts | When CPF is withdrawn | Usually after graduation | Immediately |
| Max repayment period | Up to 12 years | Up to around 20 years (varies) | Varies by bank |
| Impact on CPF retirement | Yes, reduces OA balance | No direct impact on CPF | No impact on CPF |
| Repayment in cash or CPF | Repay in cash only | Repay in cash | Repay in cash |
Pros and Cons of the CPF Study Loan
Advantages
- Lower interest compared to many bank loans
The CPF OA rate (currently 2.5% p.a.) is generally lower than many education or personal loan rates from banks. - Reduced cash burden during study
Parents do not need to pay large amounts of tuition in cash every semester; CPF OA covers it first. - Clear repayment rules
Repayment starts one year after graduation or leaving school, and you can repay over up to 12 years with a minimum monthly payment. - Can be used for close family members
Parents can support children, spouses and siblings using CPF OA.
Disadvantages
- Reduces CPF savings for retirement and housing
Money withdrawn from OA is no longer there to grow at CPF interest. This may affect future retirement plans or home purchase. - Not interest-free
Many people think “it’s our own CPF, no interest”. But in reality, you must repay both the amount used and the interest that OA would have earned. - Shorter repayment period than some loans
Maximum 12 years means higher monthly amounts compared to loans that allow, for example, up to 20 years. - Cash-only repayment
You cannot use your own CPF savings to repay this loan; repayment has to be in cash (or sometimes PSEA).
Things to Think About Before Using CPF for Study
Before using the CPF study loan, students and parents should discuss and think carefully:
- Do we really need to use CPF OA?
If you have enough savings or other support, it might be better to let CPF OA continue to grow for retirement. - Will we need this OA money for housing?
Using a large part of OA for education may limit the ability to buy a home or upgrade later. - What is the total tuition cost for all years?
Calculate the total amount for the full course and check if it fits under the 40% withdrawal limit. - Can the student afford the monthly instalments later?
Use estimated future salary to see whether the repayment (for example S$100–S$200 per month) is realistic. - Have we compared all options (CPF, MOE TFL, bank loans, scholarships)?
Sometimes a mix of CPF + MOE loan or PSEA may be better and safer.
How to Apply for the CPF Education Scheme (Step-by-Step)
The application is mainly done online through the CPF website and linked to your school’s fee system.
Step 1: Check Eligibility
- Confirm that your school and course are on the list of CPF-approved institutions and programmes.
- Ensure that the CPF member’s OA has enough balance and that the CPF member is eligible.
Step 2: Student Applies on CPF Website
- The student logs in to the CPF website using Singpass.
- Go to the section to apply for CPF Education Scheme (e-application form).
- Choose the institution, course, and the CPF member (e.g., father, mother, or self).
Step 3: CPF Member (Lender) Confirms
- The chosen CPF member will receive a notification.
- They must log in to CPF and approve the use of their OA savings for the student’s tuition fees.
Step 4: CPF Pays Tuition Fees
- Once approved, CPF will automatically pay the subsidised tuition fees directly to the school each semester.
- This continues until the course ends or the scheme is cancelled.
Step 5: Cancel When Not Needed
- If the student gets another form of support (e.g., scholarship, other loan) or finishes earlier, the family should remember to stop or cancel the CPF Education Scheme so there is no unnecessary withdrawal.
A Simple Case Study: Aisha’s Story
Let’s look at an easy, real-life style example to understand the full journey.
Aisha is starting a 3-year polytechnic course.
- Annual subsidised tuition: S$3,000
- Total tuition over 3 years: S$9,000
- Her father has S$70,000 in CPF OA and no plan to buy a house soon.
During Study
Aisha’s family decides:
- Use the CPF Education Scheme to pay the S$9,000 tuition.
- Aisha will repay her father’s CPF OA after she starts working.
They apply online:
- Aisha logs in to CPF and submits the education scheme application.
- Her father logs in and approves it.
- CPF pays S$3,000 every year from her father’s OA to the polytechnic.
After Graduation
Aisha graduates and gets a job with a monthly salary of S$2,500.
One year after graduation, she must start repaying the loan.
Total loan used: S$9,000
Assume:
- Interest: 2.5% per year
- Repayment period: 8 years
Her estimated monthly instalment might be around S$100–S$110.
Let’s say she pays S$105 per month.
Over 8 years:
- Total paid ≈ 105 × 96 = S$10,080
- Approximate interest = 10,080 − 9,000 = S$1,080
By paying S$105 per month, Aisha clears her CPF study loan in 8 years and restores her father’s CPF OA balance with interest.
Final Thoughts: Is the CPF Study Loan Right for You?
The CPF study loan (CPF Education Scheme) can be a very helpful way to finance education in Singapore:
- It offers a relatively low interest rate compared to many bank loans.
- It reduces cash pressure during the studying years.
- It has a clear and fixed repayment structure.
However, it also uses money that is meant for retirement and housing, and you must repay it in cash with interest. So, it should be used with careful planning.
Before deciding, it is wise to:
- Compare CPF study loan with MOE Tuition Fee Loan and bank loans.
- Use calculators to estimate your future monthly repayments.
- Discuss openly as a family about education costs, housing plans, and retirement needs.
If used wisely, the CPF Education Scheme can make higher education more affordable, while still keeping your long-term financial future on track.