President Bola Tinubu has announced that the implementation of the student loan initiative will begin in January 2024. The president made this announcement on Monday during the National Economic Summit 2023. This comes four months after President Tinubu signed the Student Loan Bill 2023 into law. The student loan program is part of the promises the president made during his campaign, and he assured Nigerian students that strikes would no longer be an issue.
“By January 2024, the new student loan program should commence. For the future of our children and students, we say no more strikes,” he said.
When the president signed the bill into law, his spokesperson, Dele Alake, explained that the funds would be administered by the Ministry of Education, and only financially disadvantaged students in higher institutions would be eligible for the loans.
Here’s what you need to know about the Student Loan Act:
The bill was proposed by the former Speaker of the 9th House of Representatives, Femi Gbajabiamila, and it establishes the Nigerian Education Bank, which has the authority to supervise, coordinate, administer, and monitor student loans in Nigeria.
Students can apply for this loan through higher education institutions on their behalf. Applicants will undergo a screening process to determine if they meet all the loan requirements.
The full name of the Act is “An Act to Provide Easy Access to Higher Education for Nigerians Through Interest-Free Loans from the Nigerian Education Bank Established in this Act with a View to Providing Education for All Nigerians and for Related Matters.”
This Act is powerful, and according to its creation, it must take precedence over any other conflicting laws or regulations.
Regardless of any other laws, this Act can be applied to any matters related to student loans for Nigerians studying in Nigeria. It does not apply to studying abroad.
Who is eligible to apply for the loan?
To be eligible for this loan, you must already have gained admission to a state or federal government university, polytechnic, college of education, or vocational school.
Your personal or family income must be less than N500,000.
You must have guarantors who are civil servants with at least 12 years of service. Alternatively, you can bring a lawyer with at least 10 years of experience or any judicial officer or justice of the peace (JP).
The loan is not limited to a particular gender, religion, or tribe, and having a disability does not affect your eligibility. However, the loan is intended solely for paying school fees, not for personal expenses or projects.
You are not eligible for the loan if:
You have previously defaulted on a loan from the Nigerian Education Bank.
You have been found guilty of exam malpractice by a school authority.
You have been convicted of an offense involving dishonesty or fraud.
You have been found guilty of drug offenses.
If your parents failed to repay their own student loans, you are also ineligible for the loan.
How to repay the student loan:
This new Student Loan is not a gift; it must be repaid.
The Act explains how the government will collect the money from you after you graduate and start earning an income.
The Nigeria Education Bank’s role is not only to approve and disburse loans but also to monitor your progress to ensure that you start repaying the loan when due. They will collaborate with your employer to deduct the required amount from your salary and deposit it into the student loan fund account.
Other provisions include:
Anyone who receives the loan must begin repaying it two years after completing the National Youth Service Corps (NYSC) program.
The repayment will involve a direct deduction of 10% of your salary at the source.
If you are self-employed, the government will collect 10% of your total profit each month.
You will be responsible for submitting your business information, such as the bank’s name, address, registration documents, partner and director names, and shareholder names, within 60 days of becoming self-employed.
Failure to repay the loan may result in legal consequences, including a potential two-year prison sentence, a fine of N500,000, or both.