Use of funds to repay CPF education loans under review

Use of funds to repay CPF education loans under review

We thank Mr Foo Der Ho for his feedback on the use of the Post-Secondary Education Account to pay off Central Provident Fund education loans ("Unable to use NS cash award in education account"; last Thursday).

The Post-Secondary Education Scheme helps parents save for their children's post-secondary education by maintaining a Post-Secondary Education Account (PSEA) for each eligible child.

The PSEA funds can be used for payment of tuition fees for post-secondary courses undertaken by the account holders or their siblings at approved institutions.

This is part of the Government's efforts to encourage every Singaporean to complete his or her post-secondary education. It also underscores the Government's commitment to support families in investing in the future education of their children.

The PSEA is not a bank account and its use is currently limited to publicly funded local institutions.

Any unused funds in it will be transferred to the account holder's CPF Ordinary Account when he or she turns 30. These will earn interest at the prevailing CPF interest rates and the account holder can tap these funds for housing and retirement.

We are reviewing the feasibility of allowing the PSEA to be used to repay CPF education loans, and will take Mr Foo's feedback into consideration in our review.

John Lim Director, Higher Education, Ministry of Education

This article was published on April 3 in The Straits Times.

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