President Tinubu has signed into law the student loan bill, which aims to provide financial solutions to Nigerian students pursuing tertiary education. Here are some key points to know about the bill:
NIGERIA STUDENT LOAN PURPOSE
The loan can be utilized for various purposes, including payment of school fees, accommodation, textbooks, research, educational materials, or any other justified expenses related to education. The loan amount will vary based on the student’s department and course of study. Technical courses may require higher funding compared to non-technical courses.
ELIGIBILITY FOR NIGERIA STUDENT LOAN
Students applying for the loan must meet the following criteria:
- Have secured admission into a tertiary institution (Federal or State Universities, Polytechnics, Colleges of Education, or any other tertiary institutions).
- Come from a family with an annual income of less than N500,000.
- Provide at least two guarantors, who should be civil servants above Level 12 or lawyers with at least 10 years of post-call experience.
DISQUALIFICATION
Students will be disqualified from applying for the loan if:
- They have previously defaulted on any loans (it is advised to check credit history with respective banks).
- They have a proven case of exam malpractice.
- They have been convicted of any offense related to dishonesty or fraud.
- They have been convicted of drug abuse.
- Their parents have defaulted on any loans (parents are advised to check their credit history as well).
APPLICATION PROCESS FOR NIGERIA STUDENT LOAN
Applications will be submitted to the Students Affairs Offices of the respective institutions along with relevant documents. Qualified applications will be officially forwarded by the institution to the Chairman of the Education Bank in their territory.
EDUCATION BANK
The Student Loan Bill will establish an Education Bank to facilitate the mobilization of funds for providing student loans and ensuring a constant supply of loans for tertiary education in Nigeria. The bank will have an initial share capital of N1 billion, with the federal government holding 100% of the shares.
FUNDING FOR THE BANK
The bill also establishes a fund called the “Students Loan Fund,” which will serve as the bank’s accessible fund for students. The Education Bank will manage all contributions and funds from various sources, including:
- Education bonds.
- Interest from bank deposits.
- Education endowment fund schemes.
- 1% of taxes, levies, and duties collected by the federal government through FIRS, NIS, and Customs.
- 1% of profits from oil and other natural resources.
- Grants, gifts, and other endowments.
With the signing of the bill, all profits and taxes due to the fund under the bill will be accounted for.
Also See: President Bola Tinubu Suspends Godwin Emefiele as Governor of CBN
DISBURSEMENT AND REPAYMENT
Loan applications will be sent to the Minister of Education for approval within 30 days of submission to the bank. Disbursement will occur immediately after the Minister’s approval.
Loan repayment will commence two years after completing the National Youth Service Corps (NYSC). Repayments will involve a 10% direct deduction from the beneficiaries’ salary accounts. For example, if a beneficiary earns a salary of N100,000 while working for INGAWA Nig Limited, the company will deduct N10,000 and remit it to the Education Bank as repayment for the loan.
Self-employed graduates will have 60 days to document their income for deduction purposes. They will also remit 10% of their monthly profits or face penalties.
The bill does not account for situations where graduates may not secure employment or become self-employed within two years, despite the challenges faced by graduates who have been jobless for 5-10 years. Nonetheless, this provision can be seen as an encouragement for
graduates to pursue self-employment and contribute to the nation.
DEFAULTERS
Any individual who benefits from the loan and refuses to repay, thereby denying opportunities for future beneficiaries, will be liable to a fine of N500,000 or imprisonment for two years.
