Nigerian Students Loan Acts
President Bola Ahmed Tinubu signed into law the student loan bill on June 12, 2023 (Democracy Day) to establish an education bank to grant interest-free loans to Nigerian students pursuing higher education. The Student Loan Act provides an interest-free loan for destitute Nigerian students, with beneficiaries just repaying the amount received. The Act provides loans to indigent Nigerian students pursuing higher education in the country’s government-owned universities, polytechnics, and colleges of education. This article contains all you need to know about the Nigerian Students loan and how to access the loan.
Features of the Nigerian Students Loan Acts
The Act will allow destitute students to obtain federal government loans to help pay for their higher education. The following are the characteristics of the Students Loan Act:
- A Nigerian Education Bank shall be established to provide loans for Nigerians for educational purposes.
- The loan shall be accessible only to indigent students studying within Nigeria.
- The Act offers loans for indigent Nigerian students seeking higher education in government-owned universities, polytechnics, and colleges of education.
4. Loans will be interest-free. In other words, beneficiaries will only pay back the amount they collect.
5. All qualified Nigerian students will have equal rights to access the loan without any form of discrimination arising from gender, religion, tribe, position, or disability.
6.vThe loan will be given only for the payment of tuition fees.
Who Can Apply for The Student Loan?
Nigerian students must meet the following requirement to be eligible for the student loan:
- Admission: The student applicants must have secured admission into any of the Nigerian universities, polytechnics, colleges of education or any vocational school established by the Federal Government or the government of any Stale of the Federation.
- Income Limit: The student applicants’ income or family income must be less than N500,000 (five hundred thousand naira) per annum.
- Guarantors: The student applicants must provide at least two guarantors. Each of the guarantors must be a civil servant of not less than level 12 in the service; or a lawyer with at least 10 (ten) years post-call experience; a Judicial officer; or a Justice Peace.
Disqualification Factors/Ineligibility for Nigerian Student Loan
The following circumstances disqualify students from accessing the loan.
- Previous Loan Default: If a student is proven to have defaulted on any previous loan granted by any organization, they are disqualified from accessing the loan.
- Exam Malpractice: If a student is found guilty of exam malpractice by any school authority, they will be disqualified from receiving the loan.
- Conviction of Felony or Offenses of Dishonesty or Fraud: Students who have been convicted of a felony or any offense involving dishonesty or fraud are ineligible for the loan.
4. Drug Offenses: Students who have been convicted of drug offenses are disqualified from accessing the loan.
5. Parental Loan Default: If any of the student’s parents have defaulted on a student loan or any other loan granted to them, the student will be disqualified from receiving the loan.
These disqualification criteria ensure that the loan is allocated to students who meet the necessary ethical standards and have a genuine commitment to their academic pursuits.
Application Procedure and Required Documents for the Nigerian Students Loan
All applications must be submitted to the Office of the Chairman of the Student Loan Committee created by the Act through the applicant’s bank. The relevant documents must be submitted with each application.
All applications must be submitted through the applicant’s bank to the Chairman of the Committee established under the Act. Each application must be accompanied by the required documents.
- A copy of the student’s admission letter.
- A cover letter signed by the vice-chancellor, rector, or the head of the institution, along with the student affairs officer of the institution.
- A letter from the guarantors addressed to the Chairman of the Committee, recommending the student for the loan and accepting liability in the event of default.
- Two passport photographs from each guarantor, information on the guarantors’ employment and proof of employment with the named organization, as well as particulars of the guarantors’ business registration or relevant authority if self-employed.
The Committee is obligated to communicate the applicant’s application status within 14 days of receiving the application.
Loan Disbursal Period: Application processing and disbursement must be completed within 30 days of the application being received by the Chairman of the Committee. This guarantees that loans are processed quickly and efficiently.
Loan Repayment Procedure
- Loan repayment shall commence two years after completion of the National Youth Service Corps program.
- Repayment shall be facilitated through a direct deduction of 10% of the beneficiary’s salary at source by the employer. The deducted amount will be credited to the Fund.
- In the event of a job change, beneficiaries are required to notify the Chairman of the Committee within 30 days of resuming employment with the new employer, providing details of the new job.
- Self-employed beneficiaries are required to remit 10% of their total monthly profit to the Fund.
- Self-employed individuals assuming this status must submit relevant information, such as business name, address, location, registration documents (if applicable), bank details, partner names, and director/shareholder names, to the Committee within 60 days.
Any person who defaults on a loan or assists in the default commits a crime. If convicted, the defaulter faces a N500,000 fine or a two-year prison sentence, or both. The loan repayment terms and penalties are designed to ensure prompt and responsible repayment, thereby contributing to the loan program’s viability and the availability of money for future students.
The student loan act, if properly executed, will make education more accessible to ordinary Nigerians.