CPF Board warns member that it will take legal action if she doesn’t repay the amount she took out to fund her polytechnic studies

A Central Provident Fund (CPF) member revealed on Facebook today (3 Apr) that the CPF Board has sent her a letter warning her that it will take legal action against her if she does not make payment with interest on a loan she took out to fund her post-secondary studies at a local polytechnic.

The member, Facebook user Valerie Chan, asserted that she is unclear why CPF considers the amount she took out to fund her studies a “loan” since she apparently withdrew the sum from her own CPF savings.

The CPF Board is a compulsory savings scheme where working Singaporeans and permanent residents contribute a mandated amount to their accounts, primarily to fund their retirement, healthcare, and housing needs.

The CPF Education Scheme is a loan scheme that allows members to use their own savings from their Ordinary Account to fund their subsidised tuition fees at approved institutions like the local polytechnic schools.

According to CPF Board’s website, students who successfully apply for the Education scheme “would need to start repaying the principal amount withdrawn plus the accrued interest in cash to your CPF account, one year after graduation or termination of studies whichever is earlier.”

Valerie seems to have run into financial difficulty after completing her studies and was not able to repay the principal amount withdrawn plus the accrued interest. She revealed on social media:

“Some years back I took out education scheme to fund my full time poly studies. It’s my own cpf account paying for my own studies. Things didn’t go so well and after that I was in some trouble and had financial problems so did not pay back this education “loan”.”

Sharing a picture of the letter demanding payment from CPF Board, Valerie continued: “So they have been sending letters demanding for payment + interest. Recently I received a letter demanding for payment and threatened with legal action for, I reiterate, a “loan” I taken out of MY cpf for MY education.”

Indignant at the fact that she has to repay the sum she withdrew from her own savings, along with interest, Valerie asserted: “So make no mistake about it, cpf is never our money. If it is and it’s supposed to be our retirement fund, why can’t I have free use of my money for self enrichment?”

The Independent has contacted CPF Board for their comment on Valerie’s case. We will update this story once we receive a response. /TISG

UPDATE: The CPF Board has responded on their Facebook page:

You might have seen a post by “Valerie Chan” asking why she can’t freely use her CPF for her tertiary education. There is no CPF member with the name matching her situation.

As “Valerie” stated, CPF is for retirement. Students who use CPF for their education are notified upfront of the refund requirement. They are also given ample time to start and complete their refunds. Those with financial difficulties would normally contact the Board to discuss alternative payment schedules. Only students with zero response despite multiple reminders over years would receive the letter that “Valerie” did. Once they contact CPFB, we will help them work out a plan tailored to their circumstances.