Members are advised to consult the EPF on its Education Withdrawal Scheme.
Members are advised to consult the EPF on its Education Withdrawal Scheme.

Once the excitement of getting the Sijil Pelajaran Malaysia (SPM) results is over and the anxiety of applying for pre-university or diploma programmes has subsided, the time has come for school-leavers to consider offers by institutions of higher learning and choose their place of study.

Other than aptitude and location, a key factor in the selection is tuition fees and other costs such as accommodation and expenditure on transport and food, for example.

While some students may have sponsorships or loans, or are self-financed, there are those who are at wits’ end wondering how their studies will be financed.

Parents who contribute to the Employees Provident Fund (EPF) can withdraw their savings to fund their children’s studies via the EPF Education Withdrawal Scheme.

EPF Withdrawal Operations Management Department head Zalikar Yusoff said: “The scheme allows EPF members to use their savings in Account 2 to finance their own or their children’s education — including stepchildren and legally adopted children — at an institution of higher learning either locally or abroad.”

The EPF member can be either a Malaysian or a non-Malaysian citizen who has obtained permanent resident status; and has not reached the age of 55 on the date of application. Only members or members’ children who have registered to undertake academic, professional, skill-based or vocational courses in an authorised institution of higher learning can benefit from the scheme.

For SPM school-leavers, the scheme covers full-time academic, professional, skill-based or vocational courses equivalent to a diploma (level 4) or a bachelor’s degree (level 5) offered by public institutions of higher learning or private institutions of higher learning in the country. The same full-time courses offered by universities or colleges overseas also come under the scheme.

To apply for withdrawal under the scheme, the parent who is the EPF contributor must fill up a form, present the child’s identification card and proof of relationship document. Other documents include course offer letter, student’s enrolment confirmation letter, recognition of accreditation letter for the course (unless already listed in EPF’s approved courses list) and an interview form.

The application with all the requisite documents will be processed within 21 working days. Payment to local universities and colleges can be made by direct credit and cheque. Payment to overseas universities are made by bank draft.

EPF members or members’ children are allowed to apply for an education withdrawal to pay for their tuition fees either every semester or every academic year (one withdrawal per academic year).

“Members may apply to withdraw once every semester or academic year for each child. And they may also apply to jointly withdraw with their spouses to pay for their child’s tuition fees,” added Zalikar.

Withdrawal applications will be rejected if the colleges are not recognised by the Higher Education Ministry, the courses are not accredited by the Malaysian Qualifications Agency or members’ children have already received sponsorship yet they apply for the education withdrawal fund.

For students who are registering for the first year of their courses, the funds withdrawn from the scheme cover tuition fees, including a one-way flight ticket for those local and abroad; and hostel/lodging fees.

EPF contributors, whose children who are still studying or have successfully completed their courses, are eligible to apply for education withdrawal fund to pay outstanding tuition fees or for reimbursement. If the tuition fees have been paid, the withdrawal will based on receipts issued not more than one year ago on the date of the application.

Parents of students, who have successfully completed tertiary studies, must apply for the education withdrawal fund within one year after the completion of the education programme to qualify for the scheme. If their children’s studies have been financed through loans, parents can apply for withdrawal to reduce or redeem the education loan balance with the loan provider approved by EPF.

If students have received sponsorship but are required to pay tuition fees due to certain circumstances, they are required to produce a confirmation letter from the institutions of higher learning stating the exact amount which they will have to bear on their own, together with an explanation which will be considered by EPF for approval.

Finally, if the EPF members’ children receive sponsorship after the education withdrawals have been made, the members must ensure that the institutions of higher learning refund EPF on the amount withdrawn and utilised for the fees covered by the sponsorship, to be credited back in the members’ accounts.

From 2007 up till last month, 583,150 applications have been approved under the Education Withdrawal Scheme with a disbursement amount totalling RM2.942 billion. Applications to fund diploma courses numbered 239,922 and bachelor’s degree applications, 299,194.

“We don’t have the specific figure disbursed for SPM school-leavers as the total is based on all levels of programmes such as diploma, bachelor’s, master’s and postgraduate.

“If the SPM school-leaver passed a minimum of three subjects and obtain the offer letter from the learning institution, the parent can apply for the Education Withdrawal Scheme.”