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Why CPF Rule Won't be Eased for Overseas Study

  • Ministry of Manpower (13 June 2007): Why CPF Rule Won't be Eased for Overseas Study  
  • The Straits Times (02 June 2007): Ease CPF-Funds Rule for Overseas Study


Why CPF Rule Won't be Eased for Overseas Study  
- The Straits Times, 14 June 2007

Please refer to the letter “Ease CPF-funds rule for overseas study” by Mrs Ong Cher San (Straits Times, 2 June 2007).

2.   The primary objective of CPF is to help members save for their old age needs. Singapore has a rapidly ageing population. The proportion of Singaporeans aged 65 and above is expected to grow from 8% in 2005 to 19% in 2030. Retirement and healthcare needs will therefore increase. However, only about 40% of CPF members turning 55 at present are able to meet their CPF Minimum Sum. Hence, we should help members set aside more CPF savings in the future instead of allowing more withdrawals.

3.   For this reason, the CPF Education Scheme that was introduced in 1989 is limited to only full-time local tertiary education courses that are heavily subsidised by the government. Opening up the use of CPF for overseas education will lead to higher withdrawals of Singaporeans' savings that should be set aside for their old age needs.

4.   We thank Mrs Ong for her suggestion.


Ease CPF-Funds Rule for Overseas Study
- The Straits Times, 02 June 2007

My daughter scored As and Bs for her A levels but failed to get into the law faculty at NUS and SMU. Neither did she qualify for her second choice - accountancy. She was offered her fifth choice.

Unless one has excellent grades, the influx of foreign talent and scholars has rendered it increasingly competitive (and difficult) for good to average performers to secure a place in the local universities. This has been exacerbated by the drive by the universities to attract top talent that would have otherwise qualified (with scholarships) for the likes of Oxford and Cambridge by offering double degrees, scholarships and tie-ups with overseas institutions.

It is shocking to learn that some students with four As failed to qualify for even an interview with the medicine faculty this year. Students with excellent results of A1 (General Paper) and four As also failed to qualify to study law at NUS.

These students may have to venture overseas. Ironically the four As would have secured them a place at some of the top international universities.

However, they may be deprived of pursuing their dreams by the very high cost of a tertiary education overseas.

My daughter has secured offers from UK universities to study law. An estimated $250,000 is required for the three-year course. None of the banks I contacted is prepared to offer a study loan for overseas tertiary education. All they could offer are the usual overdraft and personal loans, with collateral and at an interest rate of prime plus 1 per cent.

CPF Ordinary Account funds can be used for local tertiary education but not for overseas studies. I have written to the Ministry of Manpower but to no avail.

The ministry should consider allowing the use of CPF funds for overseas tertiary education, perhaps capping it at a certain limit, or come up with other solutions.

Singapore's goal of becoming an education hub would be questionable if the people's educational aspirations cannot be accommodated.