Whether you are planning to embark on your own tertiary education, or you are planning for your children’s future education. Do give yourself a pat on your back, it’s quite a feat. You deserve that!
In Singapore, university tuition fee averages around S$30,000. That’s quite a hefty amount for a typical student to bear.
There are a few ways that you can fund your tertiary education:
- Tuition Fee Loans
- CPF Education Schemes
- MENDAKI Tertiary Tuition Fee Subsidy/Loan
- Post-Secondary Education Account (PSEA) Scheme
- Scholarships/ Grants
Tuition Fee Loan
Tuition Fee Loan is provided by the Ministry of Education (MOE) and administered by 2 local banks.
The cool thing about the Tuition Fee Loan that there is no income requirement and age restriction.
- Up to 90% of your tuition fees (does not cover hostel or compulsory miscellaneous fees)
– You can choose to loan 30%/ 50%/ 80%/ 90%
- At 0% interest and no repayment while studying;
- With a min. repayment of S$100 per month, and
- A maximum repayment duration of 20 years.
- You are required to have a guarantor to apply for Tuition Fee Loan.
Tuition Fee Loan administered by:
- DBS Bank
- OCBC Bank
Universities Tuition Fee Loan is available for:
- Singapore Institute of Technology (SIT),
- National University of Singapore (NUS),
- Nanyang Technological University (NTU),
- Singapore University of Social Sciences (SUSS) and
- Singapore University of Technology and Design (SUTD).
- 21 – 60 years old
- Must not be bankrupt
Guarantor’s Nationality requirements:
|Student's Nationality||Guarantor's Nationality Requirements|
|Singapore PR||Singaporean/ Singapore PR|
The guarantor is there to guarantee that he/she will pay the loan in any case of your dismiss or if you default on the loan.
Repayment of the Tuition Fee Loan
- Maximum: 20 years
- No later than 2 years after graduation
- One lump sum or by equal monthly instalments (min. $100)
- Early repayment of the loan is allowed – partial repayment allowed in multiples of $1,000.
- Can use their PSEA balance to pay their loan after graduating.
If the student leaves the University without completing school,
- The loan will immediately become due and payable.
- The student is able to repay the outstanding sum by monthly instalments (but terms and conditions apply)
If the student hasn’t started repaying the loan even after 2 years from his graduation.
- An additional interest of 1% per month will be imposed.
5.33% Interest on Loan
- Average prime rate of DBS, OCBC and UOB applies which is 5.33% per month.
When does interest start rolling?
It will start on the 1st day on the 3rd month upon your graduation.
An example of interest commencement date is:
|Final Exam Results releases in:||Interest Commencement Month|
|June||1st August of the same year|
|December||1st February of the following year|
- The interest will start rolling regardless if you delay the start of your monthly repayments to the bank.
Late Payment Charge
- Levied at the rate of 1% per month
You definitely wouldn’t want to get charged a late payment fee of 1% per month, which will snowball into an effective rate of 12.74% that year. That is the power of compounding.
If you have an existing debt issue or suffer from a tendency to rollover your debts, you need to practice the 2 ways to clear your debts effectively.
Eligibility for the Tuition Fee Loan
Not Eligible if:
- Student is already receiving any form or scholarship or bursary award by the respective schools, government agencies or other organisations that provide for 100% of tuition fees.
- Student is using CPF Education Scheme that provides for 100% of tuition fees.
- Students receiving full tuition fee subsidy from Mendaki
- Students that are not receiving MOE tuition grant
- International Students who are paying full tuition fees (means not taking up Tuition Grant
Should You Take the Loan?
Yes, if you are currently unable to fork out the hefty sum of money for your school fees.
- If you know that you are able to fund your repayment upon graduation. – Means able to secure a proper job upon graduation.
- If not, you can always take a gap-year to work and save for your education, this is one of the most common practice here in Singapore.
No, if the interest on the loan at 5.33% per month scares you like it scares me and you are afraid that you will be unable to pay back in time. There are other alternatives to pay your school fees such as:
- Credit Cards 0% monthly instalment
If you happen to have S$30K with you, first of all, congratulations, you are able to pay your school fees in one lump sum! Should you or should you not take up this tuition fee loan?
Yes, it is one way you can help yourself “buy time” with the 30K that you have on hand,
- You are able to invest to earn a return of approx. 6% per year.
- Upon graduation (4 years), if you have consistently been achieving 6% p.a. in return, you would have $37,874.
- That is $7,874 higher than what you originally have.
- You get to pay the bank back in one lump sum prior to the interest kicking in
- And earn an additional $7,874!
Comment down below if you have tried this and if it worked for you!
There are additional eligibility for tuition fee loan provided by the respective institution, you may continue reading on but if not jump here.
Additional Eligibility for the Tuition Fee Loan
Some schools have additional eligibility criteria for the Tuition Fee Loan for their full-time students.
Click through if you are interested to know them in greater detail!
- Full-time undergraduates, including full fee paying Singapore Citizens and SPRs.
- Full fee paying international undergraduates who have used up their MOE Tuition Grant subsidy and have taken up the Tuition Fee Loan before they are charged the full tuition fee rate. (Percentage of coverage is based on the subsidised tuition fee rate portion only).
- 5th Year undergraduate students taking Double-Degree Programmes (Percentage of coverage is based on the subsidised tuition fee rate portion only).
- Undergraduate students reading the iBLOC modules and Special Term modules
Not Eligible (Undergraduate):
- Full fee paying international undergraduate students or international undergraduate students who are offered admission without the MOE Tuition Grant.
- Students who are reading the Concurrent Degree Programmes may not be eligible for the loan once they are charged graduate-tuition fee. Please check your eligibility here.
- Graduate Research programmes
- Full-time government-subsidised Graduate Coursework programmes, including the following:
- Master in Architecture and Master in Landscape Architecture programmes
- Programmes conducted by Lee Kuan Yew School of Public Policy, Singapore-MIT Alliance, and the Duke-NUS Medical School
Not Eligible (Graduate):
- Students in government-subsidised programmes paying non-subsidised tuition fees:
- Holders of Scholarship/Fellowship/Tuition Fee Allowance
- MOE Scholarship/Bursary holders
- PSC Scholarship/Bursary holders
- SAF Awards holders
- Part-time coursework students
- Students in self-funded programmes
- All applicants pursuing their undergraduate degree
- Biomedical Sciences & Traditional Chinese Medicine programme students will only be covered for the first 3 years.
- Singapore Permanent Residents and International undergraduates paying non-subsidized tuition fees.
The following graduate full-time and part-time research programmes are eligible:
- Doctor of Philosophy
- Master of Arts (by research)
- Master of Science (by research)
The following graduate full-time subsidised coursework programmes are eligible:
- Master of Arts (Applied Linguistics)
- Master of Education (all specialisations)
- Master of Science (Exercise & Sport Studies)
- Master of Science (Life Sciences)
Singapore Citizens and Singapore Permanent Residents with non-accredited diplomas or A-level certification who are pursuing their undergraduate degrees and are required to take bridging/top-up modules.
I know that this only covers local universities! Don’t worry, we will be covering one for the private university kids. In the meantime, like us on facebook to stay tuned for that!
Have a burning question but not sure who to ask? We have an open community for you to hear from different perspectives as well. Check out our blog for more unbiased opinions on while you are on your personal finance journey.
Drop a comment and share with us if you have an experience with Tuition Fee Loans or even a better alternative! Also, don’t forget to share it with your friends who might need this!
Till the next one, may the Personal Finance force be with you!
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