With the rising cost of living and the need for career qualifications, many Singaporean parents recognise the importance of quality education.
However, top institutions and tertiary education come with high costs. Like every other big expense, saving for your child’s education requires careful financial planning. So, let's look at the costs and ways you can use to fund your child's educational journey!
Understanding Education Costs in Singapore
When we're clueless about the long-term costs of our child's education, it's challenging to plan ahead. So, it's always best to run the numbers first and find out an estimated cost you can expect.
The overall cost of education
The average total cost of education in Singapore is around $71,409, which covers infant care, child care, primary and secondary school, junior college, and university.1
The largest portion of the costs usually comes from tertiary education due to its higher fees and inflation.
However, this estimate only applies to government schools and excludes extra expenses like textbooks, uniforms, excursions, and inflation. Therefore, actual costs are likely to be much higher.
Post-secondary costs
Singapore offers numerous options for post-secondary tertiary education, including junior colleges, polytechnics, Institutes of Technical Education (ITE) and universities.
Junior colleges are typically heavily subsidised, with the total cost for a 2-year program being around $792. Most students will go on to pursue a university degree after junior college.
Polytechnics, on the other hand, tend to be more expensive since students graduate with a working diploma. A three-year course at a polytechnic can cost around $9000.
Another option your child might consider is a course at ITE. These schools equip students with technical skills that prepare them for specific vocations. The costs are generally lower than polytechnic schools, ranging between $860 – $1,180 for a two-year program.
University costs
After post-secondary education, most parents aim for their child to earn a degree, opening doors to more job opportunities. Singaporean students can continue their studies at public universities (such as NUS, NTU, SUTD, SUSS, SIT, and SMU) and private universities like SIM Global.
Tuition fees at a university can vary depending on the course, with higher costs for medicine, dentistry, and law. Tuition fees also increase due to inflation and annual hike fees. On average, a parent should set aside $38,250 for local university expenses.3
Studying overseas is significantly more expensive due to exchange rates and additional expenses, such as housing, living costs, transportation, and meal plans.
Funding Your Child’s Education
The good news is that you now have a rough estimate of how much is needed to support your child's education! While these expenses may seem daunting initially, they are manageable through educational schemes, financial planning, and good saving habits.
Start Early
It's never too late to start saving for your child’s education, but the earlier, the better.
Take advantage of compound interest to boost your savings. You earn interest on both your initial amount and the interest added over time, allowing your savings to grow faster.
For example, saving SGD 150 a month from your child's birth at a 5% annual interest rate will give you about SGD 52,000 by age 18. If you start when your child is 10, you'll have around SGD 18,000 by age 18.
Setting up a regular savings plan, like an automatic transfer from your bank account to your child’s education savings account, can help you stay consistent with your savings efforts.
Explore CPF Education Schemes
You can consider the CPF Education Loan Scheme as an option to fund your child’s education. The Central Provident Fund (CPF) is primarily for retirement, but it can also be used to support your child’s tertiary education in Singapore.
This scheme lets you use your CPF Ordinary Account (OA) savings to pay for tuition fees at many local institutions, such as NUS, NTU, and polytechnics. It allows you to cover up to 100% of your child's tuition fees, if you meet the stipulated conditions.
Repayment begins one year after graduation or when studies end. You can repay in full or in monthly instalments over 12 years. Using the CPF Education Loan Scheme helps ensure your child receives the quality education they deserve without the immediate financial burden.
Consider Education Savings Plans
As parents, we all want the best for our children, including a top-notch education. With tuition fees rising by 5-7% annually, it's crucial to have a savings plan that can keep up with these costs.
When choosing a savings plan, here are two things to look out for:
Interest rates or investment returns: Evaluate how much your savings will grow over time.
Payout structure: Some plans offer lump-sum payouts, while others provide regular disbursements to cover ongoing expenses.
If you need help deciding on the right plan, consider consulting your financial advisor for more personalised guidance. The right plan can play a major role in meeting your child’s educational needs and goals.
Maximise Government Aid and Scholarships
The Singapore government offers various grants and scholarships that can help support your child's education. These include:
These scholarships provide financial relief and recognise student achievements.
Additionally, the Singapore-Industry Scholarship supports students aiming to contribute to key sectors of the economy, offering opportunities like internships and mentorships.
Parents can also access financial assistance programs, like the MOE Financial Assistance Scheme (FAS), which helps with school fees, uniforms, textbooks, and transport.
Final Thoughts
Investing in your child’s education is one of the best ways to ensure their future success. By planning early and considering all the costs, you can create a solid financial plan to support their education journey.
Whether you choose local schools or international ones, careful planning will help you provide the best education, worry-free.
Remember, starting early and staying prepared will make a big difference in achieving your goals and giving your child the bright future they deserve.
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