Mathematical Modeling: Price for your future

National University of Singapore (NUS)

NUS Tuition Fee Loan

Eligibility: Full-time undergraduates, Singaporean Citizen a) b) c) d) e) Maximum Loan Amount: 90% if tuition fee payable by Singaporean citizen Interest Rate: Average Prime Rate of DBS, OCBC, UOB Interest Computation: Deferred until after graduation Max Repayment Period: 20 years Minimum Repayment Amount: $100 per month commencing not later than 2 years after graduation

Central Provident Fund (CPF) Education Scheme (CES)

Eligibility: Singaporeans a) Maximum Loan Amount: Not exceeding tuition fee payable and CPF member may only use up to 40% of accumulated savings in the ordinary account, excluding amounts withdrawn for housing. b) Interest Rate: Based on prevailing CPF interest rate c) Interest computation: One year after graduation or on leaving the course, whichever earlier d) Max Repayment Period: 12 years e) Minimum Repayment Amount: For outstanding amounts up to $10,000 minimum repayment per month is $100

NUS Student Assistance Loan

Eligibility: Financially needy undergraduates who have been offered or are in receipt of the NUS Study Loan with the living allowance component a) Maximum Loan Amount: At least $1800 per annum and is offered depending on assessed level of neediness of the applicant b) Interest Rate: Interest Free c) Interest Computation: - d) Max Repayment Period: Depends on value of loans and varies from 3 -5 years e) Minimum Repayment Amount: Fixed equal monthly installments not later than 3 months after graduation

Nanyang Technological University of Singapore (NTU)

- NTU Tuition Loan a) Maximum Loan Amount: 90/100 X $24,000 = $21,600 b) Interest Rate: Average of the prime rates of the following banks, DBS, OCBC and UOB (DBS and OCBC 0.05%) c) Interest Computation: Monthly d) Max Repayment Period: 20 years e) Minimum Repayment Amount: S$100 per month f) Assumption: That I borrow the loan from DSB bank? That I pay by monthly installments instead of one lump sum?

Singapore Management University (SMU)

Tuition Fee Financing Schemes from AY2011-12 Tuition Fee Loan Loan Amount Up to 90% of subsidized tuition fees payable by undergraduate Singaporean students. Study Loan Tier 1: Up to 20% of subsidized tuition fees payable by undergraduate Singaporean students and $3,600 annual living allowance Tier 2: Up to 10% of subsidized tuition fees payable by undergraduate Singaporean students and $3,600 annual living allowance Note: 1) The quantum of loan does not include payment of annual/miscellaneous fees. 2) The quantum of loan is pegged to the tuition fees payable by undergraduate Singaporean students. Eligibility 1) All full-time undergraduate Note: 1) The quantum of loan does not include payment of annual/miscellaneous fees. 2) The quantum of loan is pegged to the subsidized tuition fees payable by Singaporean students. Note: The quantum of loan does not include payment of annual/miscellaneous fees. CPF Education Scheme Up to 100% of subsidized tuition fee payable by undergraduate students.

1) All full-time undergraduate students

All full-time undergraduate students can use their own

students. 2) Full-fee paying undergraduate students are not eligible.

who must concurrently hold CPF savings, their spouses' the Tuition Fee Loan and/or and their parents' (including CPF Education Loan and/or step-parents') CPF savings. scholarship/grant and/or a fee subsidy/loan from a registered government agency or a combination of all, of at least 90% of the tuition fee. 2) Monthly per capita (average) household income of: (a) Tier 1 (SC/SPR): no more than $500, students may borrow to the maximum quantum as specified in Tier 1 above. (b) Tier 2 (SC/SPR): between $501 and $2,400, students may borrow to the maximum of the quantum as specified in Tier 2 above. (c) Tier 2 (FS): no more than $1,200, students may borrow to the maximum quantum as specified in Tier 2 above. 3) Not applicable to postgraduate and full-fee paying undergraduate students.

Guarantor

1) Must be between the ages of 21 and 60 years old. 2) Must not be an undischarged bankrupt nor be a student pursuing full-time education. 3) May not serve in this capacity for more than two outstanding student loans, including this loan. 4) Must be a Singapore citizen for an applicant who is a Singapore citizen. 5) Can be either a Singapore citizen or a permanent resident for an applicant who is a Singapore

Guarantor is not required if the student is a SC/SPR. Guarantor is required if the student is not a SC/SPR.

permanent resident. 6) Can be of any nationality for an applicant who is a non-Singaporean. Repayment starts Not later than 2 years 6 months after graduation Not later than 1 year after after graduation or or on securing employment, graduation. on securing whichever is earlier. employment, whichever is earlier. $100 per month $100 per month $100 per month (for outstanding amount of up to $10,000) 20 years SC/SPR with monthly per 12 years capita household income of no more than $500: 5 years Others: 20 years Interest rate Average prime rate of SC/SPR with monthly per 3 local banks capita household income of no more than $500: (currently at 4.75% Interest-free per annum)** Others: Average prime rate of 3 local banks (currently at 4.75% per annum)** Prevailing CPF interest rate (currently at 2.5% per annum)** 1) Interest is computed from the date of withdrawal, ie as soon as school starts. 2) Interest and loan sum are paid back to the member's CPF account. 3) The withdrawal limit is 40% of the balance in CPF Ordinary Account including amounts withdrawn for education and investments. Interest 1) Interest-free during course of study, ie interest is 1) Interest is computed from Computation computed upon graduation. the date of withdrawal, ie as soon as school starts. 2) Interest and loan sum are paid to the bank. 2) Interest and loan sum are paid back to the member's CPF account. 3) The withdrawal limit is 40% of the balance in CPF Ordinary Account including amounts withdrawn for

Min repayment amount Max repayment period

education and investments. 4) Needy students with monthly per capita household income of no more than $2,400 can also apply for a loan of $3,600 (per annum) for living expenses under the Study Loan Scheme. Please refer to the Study Loan column on this page for the details. Assumptions made: Applications for tuition fee financing commencing Term 1, Academic Year 201213 will be in June/July 2012.

CPF education loan

1. About the CPF Education Scheme -The CPF Education Scheme is a loan scheme. The total amount withdrawn for tuition fees plus accrued interest has to be repaid in full with cash. Repayment will start one year after date of graduation or date of leaving the institution, whichever is earlier. Interest starts accruing from the day of withdrawal, and is pegged to the prevailing CPF Ordinary Account interest rate which is currently 2.5% pa. As a student taking a full-time government subsidized course leading to a diploma or degree at an approved local tertiary institution, you may apply for a loan from your own or your parents CPF savings to pay your tuition fees. -The Education Scheme is a loan scheme which enables members to use CPF savings from their Ordinary Account to pay for their children's, spouses or their own tuition fees. The student has to repay the amount withdrawn plus interest, in cash subsequently into the payers Ordinary Account. Repayment commences one year after the student graduates or leaves the educational institution. Only full-time subsidized courses at approved local educational institutions are included under this loan scheme. CPF Interest Rates (01 Apr 2012 to 30 Jun 2012) (reviewed quarterly) Ordinary Account 2.50% p.a. Special & Medisave Accounts 4.00% p.a.

CPF Interest Rates (01 Jan 2012 to 31 Dec 2012) (reviewed yearly) Retirement Account 4.00% p.a. Interest Rate for Ordinary Account Monies For Ordinary Account (OA), CPF members receive a market-related interest rate based on the 12month fixed deposit and month-end savings rates of the major local banks. The computed CPF interest rate, derived from the major local banks interest rates for the threemonth period, 1st November 2011 to 31st January 2012, worked out to be 0.16% per annum. However, members will receive the higher rate of 2.50% as legislated by the CPF Act.

Maximum Loan Amount: Up to 40% of your accumulated Ordinary Account savings, or the remaining balance in the Ordinary Account after setting aside any amounts reserved for housing or other schemes (if any), whichever is the lower, and subject to the amount of tuition fees payable. Interest Rate & Computation: Above Max Repayment Period: Repayment will start one year after date of graduation or date of leaving the institution, whichever is earlier. Interest starts accruing from the day of withdrawal, and is pegged to the prevailing CPF Ordinary Account interest rate which is currently 2.5% pa. All must be repaid within 12 years. Minimum Repayment Amount: The total amount withdrawn for tuition fees plus accrued interest has to be repaid in full with cash. https://www.cpf.gov.sg/CPF_TRANS/SSL/FINANCIAL_MODEL/EDNCALCREPAY.ASP?prof= (As the repayment is dependent on the amount loaned and interest incurred)

CHOOSING THE RIGHT LOAN?

OUR DECISION: CPF EDUCATION LOAN MODEL ASSUMPTIONS: 1. 2. 3. 4. 5. 6. 3 year course $24000 borrowed from CPF, $21600 borrowed from NUS/SMU scheme 40% of parents CPF ordinary account is sufficient to pay for the loan. Student takes 12 years to pay off the loan Average prime interest rate of banks remain constant over the repayment period at 4.5% CPF ordinary accounts interest rate remains constant over the course and repayment period at 2.5%

a) 100% of tuition fees ($24000) can be borrowed CPF Loan, which is the highest maximum loan amount as compared to other Loans available.

b)2.5%, the lowest interest rate among all schemes. c) Interest computation: CPF: After 12 years, total amount paid by student:(24000x(1+2.5/100)^15) =34759.16(2dp) NUS/SMU(similar interest rates and schemes):21600x(1+4.5/100)^12) =36631.04(2dp) NTU(computed monthly) :21600x(1+0.375/100)^12 = $37028.33

e) Minimum repayment amount stands at $100 for both schemes but as loan is >$10000, it will be slightly higher for the CPF loan. f) Nevertheless, in the CPF loan, interest and loan sum are transferred back to CPF account. In order words, as compared to other schemes (NUS/SMU/NTU) available, the interest charged to loan receivers are returned to the applicant of the loan, instead of earned by external organisations such as banks. The CPF loan also gives the lowest total amount payable by the student, if the student manages to pay off all his or her fees within 12 years of his or her completion of his or her course.