As university education becomes increasingly essential for future careers, planning for your child’s higher education is a crucial step for many parents in Singapore. With tuition fees rising, it’s important to understand the costs and the available options to fund your child’s education.
1. Understanding the Cost of University Education
University tuition fees in Singapore vary depending on the course of study. On average, a bachelor’s degree course costs around $25,000. However, specialized fields like medicine, law, and music come with significantly higher price tags:
Medicine: Around $90,000 for the full course.
Law and Music: Approximately $40,000.
These figures can seem daunting, but there are several ways to prepare financially and make university education more affordable. Figures are obtained from NUS 2024 tuition fees here.
2. Options to Prepare for University Tuition Fees
There are multiple strategies and schemes available to help parents manage the cost of university tuition. Let’s explore these options:
Option 1: Invest Early for Long-Term Growth
If you have at least 10 years before your child enters university, investing early is one of the most effective ways to build up an education fund. Consider investing in a mixture of low-cost funds that are globally diversified in stocks and bonds, suited to your risk profile.
Check out our investment page here to learn more.
Option 2: Use CPF Ordinary Account (CPF OA)
Parents can use their CPF Ordinary Account (OA) to pay for their child’s university tuition under the CPF Education Scheme. This scheme allows you to use your CPF savings to cover tuition fees at approved institutions, such as local universities. The amount withdrawn will need to be repaid to your CPF account with interest once your child starts working.
This is a good option for families looking for a flexible and cost-effective way to manage tuition fees without taking on additional debt immediately.
Click here to find out more.
Option 3: Utilise the Post-Secondary Education Account (PSEA)
Another helpful resource is the Post-Secondary Education Account (PSEA), which can be used to partially fund university education. The PSEA is a savings account created by the government to help families save for post-secondary education. Funds in this account can be used to cover tuition fees, course materials, and other education-related expenses.
While the PSEA may not fully cover all the costs, it can significantly reduce the financial burden by partially funding the tuition fees, making it a valuable tool for families.
Click here to find out more.
Option 4: Take Up an MOE Tuition Loan
For parents who need additional financial support, the Ministry of Education (MOE) Tuition Loan is an option. This loan, administered by local banks, allows students to borrow up to 90% of tuition fees for a university education. The loan offers attractive repayment terms, with repayment starting only two years after graduation.
Taking up a tuition loan can help ease the financial strain of paying for university upfront, while allowing your child to repay the loan in manageable installments once they are employed.
Click here to find out more.
Summary
Planning for your child’s university education requires careful financial preparation. By investing early, utilizing existing schemes like the CPF OA and PSEA, and exploring tuition loans, parents can make higher education more affordable and manageable.
The key is to start early and explore all available options to ensure you’re financially prepared when your child embarks on their university journey.
