Higher education loan no longer tied to savings account

Tuesday June 10, 2008 MYT 10:04:40 PM – StarOnline

PETALING JAYA: The Government will not enforce the minimum savings requirement that was previously compulsory for anyone wanting to obtain a loan from the National Higher Education Fund Corporation.

Previously, parents needed to open a National Education Savings Scheme (SSPN) account in order to qualify for the loan.

“To ease the burden on students wanting to obtain a study loan, the Government has decided that the ruling on compulsory savings would not be enforced this year.

“Those wanting to take a loan need only have a minimum of RM20 in their SSPN account to apply for the loan,” Higher Education Minister Datuk Seri Mohamed Khaled Nordin said in a statement Tuesday.

Under the minimum savings ruling enforced on Jan 1 this year, parents with a monthly household income of less than RM2,000 must have deposited at least RM500 in their SSPN account to qualify for a loan.

Parents who earn more than RM2,000 monthly must have saved up at least RM3,000.

The SSPN was established in 2004 and was aimed at encouraging parents to save for their children’s education.

The main advantage of the SSPN was that the Government provided a matching grant of up to RM10,000 for parents who earned less than RM2,000 monthly.

Other benefits of the SSPN, which is administered by the corporation, included yearly dividends that were tax-exempt.