President Bola Tinubu signed the Nigeria Student loan bill on 12th June 2023 at the Presidential Villa, Abuja.
The legislation, which seeks to provide financial assistance to Nigerian students in tertiary institutions, passed the third reading in the lower chamber in May 2023. The bill was sponsored by Femi Gbajabiamila, immediate-past speaker of the house of representatives.
The legislation allows Nigerian students in tertiary institutions to access interest-free loans from the Nigerian education loan fund. The legislation provides for the establishment of the Nigerian Education Loan Fund, which will have the power to administer, supervise, coordinate, and monitor the management of student loans in the country. Many have wondered and ask ” Does Nigeria have student loan ?” . However the answer to this question is here.
The main purpose of the Nigeria Student Loan Bill is contained in its title: “A Bill for an Act to provide for easy access to higher education for Nigerians through an interest-free loan from the Nigerian Education Bank established in this Act to provide education for Nigerians and other purposes connected thereto.”
Below are some of the things you should know about the Nigeria student loan bill :
- A student can be disqualified if they or their parents have defaulted any loan in the past, or they (student) have been convicted of drug related offences or any felony involving dishonesty or fraud, or they if they have been found guilty of exam malpractices by any school authority.
- Processing and disbursement of the student loan shall be made within 30 days of the application reaching the Bank.
- The loan granted to students shall only be for the payment of Tuition and shall be interest-free.
Repayment of the Loan shall commence two years after the completion of the applicant’s NYSC programme. - 10% of the applicant’s salary shall be deducted at source by any employer for the repayment of the loan. And if they are self-employed, they will remit 10% of their total monthly profit as repayment of the loan.
- Defaulters, or anyone aiding them shall be liable, upon conviction, to two years imprisonment, or a fine of N500,000 or both. “Defaulters” as used above, are those who try to cheat the system by providing falsified data in their repayment documents.
- The new Act establishes the Nigerian Education Bank that will supervise the process, administer, and monitor these loans.
- The Bank shall have a Governing Board that will be chaired by a Professor who is a retired Vice Chancellor of any Nigerian university. The Board will include representatives from Academic Staff Union of Universities, Vice Chancellors Forum, Rectors Forum, Nigerian Labour Congress, Nigerian Bar Association, the Minister of Education, Auditor General of the Federation, the Minister of Finance or their Representative, Chairman of Nigerian Universities Commission (NUC), among others.
How to apply for the Students Loan in Nigeria
All applicants must apply to the Chairman of the Bank and through the Student Affairs Office of their various institutions – University, College of Education, Polytechnic or Vocational School – established by the Federal Government or any State Government in Nigeria. NB: There are student loan companies in Nigeria but this Federal Government study loan must be applied through the stipulated banks.
Prospective students seeking access to the loan are required to follow specific steps to initiate their applications. The information therein will properly guide students on how to get student loan in Nigeria.
These steps include submission through their respective banks, accompanied by a comprehensive set of required documents.
Nigeria Student Loan Eligibility
To apply for a loan under the Students Loan Bill Nigeria, prospective student applicants must meet the conditions specified in Section 17 of the Students Loan Bill Act.
The conditions are as follows:
(1) Admission into Accredited Institutions in Nigeria: Applicants must have secured admission into Nigerian universities, polytechnics, colleges of education, or vocational schools established by the Federal Government or any state government.
(2) Income Limit: The applicant’s individual income or family income must not exceed N500,000 per annum.
(3) Guarantors: Each applicant must provide a minimum of two guarantors. The guarantors must fall into one of the following categories: (i) Civil servant with at least 12 years experience, (ii) Lawyer with at least 10 years post-call experience, (iii) Judicial officers, or (iv) Justices of the peace.
Ineligibility for Loan Access
Students can’t get a loan if they don’t meet certain criteria, according to the Students Loan Bill. The following are disqualifying factors:
(1) Past Loan Default History: A student can be disqualified if they have defaulted any loan in the past.
(2) Caught in Exam Malpractice: A student can be disqualified if they have been found guilty of exam malpractices by any school authority.
(3) Conviction of Felony or Dishonesty Offenses or Fraud: Students who have been convicted of a felony or any offense involving dishonesty or fraud are not eligible for the student loan.
(4) Drug Offenses: Students who have been convicted of drug offenses are disqualified from accessing the loan.
(5) Students Parents 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.
Loan Application Process and Documentation
The procedure for applying for a student loan is outlined in the Students Loan Bill. The following step is included in the application process:
Submission through the Applicant’s Bank: All applications must be submitted through the applicant’s bank to the Chairman of the Committee established under the Act.
A cover letter signed by the vice-chancellor, rector, or the head of the institution, along with the student affairs officer of the institution, must accompany the loan application.
Required Documents: Each application must be accompanied by some important documents, including a copy of the student’s admission letter.
- Additionally, 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, is required.
- The application should also include 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.
Application Status Communication: The Committee is obligated to communicate the status of the applicant’s application within 14 days of receiving the loan application.
Loan Disbursement
The Students Loan Bill Nigeria outlined the process for loan disbursement:
Timely Processing: Processing of any applicant’s application and disbursement shall be completed within 30 days of the application reaching the Chairman of the Committee, subject to Section 18 (4) of the Act.
This ensures that loans are processed efficiently and timely.
Loan Repayment
The Loan repayment terms for beneficiaries of the loan are outlined in the Students Loan Bill:
Commencement of Repayment: Loan repayment shall commence two years after completion of the National Youth Service Corps program (NYSC).
Salary Deduction: Repayment shall be facilitated through a direct deduction of 10% of the beneficiary’s salary at source by the employer.
Change of Job Notification: 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. The beneficiary must submit details of the new job.
Self-Employed Individuals: Self-employed beneficiaries are required to remit 10% of their total monthly profit.
Reporting of Self-Employment Status: 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.
Penalties for Default: Any individual who defaults on the provisions of subsection (5) or aids in such default commits an offense and, upon conviction, is liable to a fine of N500,000 or imprisonment for a term of two years, or both.
- This emphasizes the importance of adhering to the repayment obligations outlined in the Act and discourages default or aiding default.
The loan repayment terms and penalties aim to ensure timely and responsible repayment, contributing to the sustainability of the loan program and the availability of funds for future students.
More detailed information regarding the Nigeria student loan Bill can be found HERE.
