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No CPF for Overseas Education

The government has re-affirmed its stand that they will not allow parents to use their CPF for their children’s overseas education. It fears that the parents will be left with little retirement funds should their children not pay back their parents.

Currently, CPF members can use up to 40 per cent of their Ordinary accounts to pay for their children’s education in local tertiary institutions only.

No CPF for Studies Abroad (Straits Times)

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8 comments
The Watchman says 14 years ago

Hi,
Overseas education is more expensive excluding the living expenses. Local U may not use up to 40%..
In term of priority retirement comes first…it is money sense and not emotional. Double standard ? that might appear so. They set the standard. What to do?

Reply
    lioninvestor says 14 years ago

    How about allowing a deduction based on local rates? That seems fair.

    Reply
Garrett says 14 years ago

What kind of lame argument is this? Can’t use CPF for overseas education cause it will drain on the parent’s retirement… and local education will not? Claiming that the kid may not repay the CPF loan for overseas study but not for local study, is there some magic to local education that makes people 100% repay their loans? Isn’t there already a cap on the amount that can be used for local education? If the overseas education spending is subjected to the same cap what *is* the problem? What a nonsensical Straits Times article.

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    Garrett says 14 years ago

    Yes… on the flip side the arguments provided in the ST article are sound technically speaking. Retirement concerns should come before funding children tertiary education. But the appalling double standard for local vs overseas education is just plain discriminatory. They should get their points checked before publishing these kind of “shooting themselves in the foot” article. Full of red herrings and contradictions.

    Reply
    lioninvestor says 14 years ago

    Looks liked they followed up on the article by another which tells us that graduates are not paying back the CPF loan to their parents.

    http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_571124.html

    Actually, to prevent the default, they can auto deduct the payment from the children’s CPF.

    But then, that will mean a net outflow of money from CPF (children’s account instead of parents) to pay for education.

    Reply
      Garrett says 14 years ago

      Honestly, I’m surprised that so little people are defaulting on their CPF loan, 5% is such a low figure. It makes no sense to payback your parent’s retirement money into their CPF, when CPF has so many restrictions. A better option would be to pay back the loan in cash to their bank account.

      Reply
        lioninvestor says 14 years ago

        Actually, that’s a good point. That probably explains why many children do not pay back into their parent’s CPF.

        Reply
Jasmin says 14 years ago

Reminds me of limited usage of CPF funds for overseas medical treatment.
In the first place, why CPF funds can be used for local tertiary education when education loans can be easily available to fund it?

Reply
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