President Bola Tinubu’s recent signing of the Student Loan Bill on June 12, 2023, marks a significant milestone in providing financial solutions for Nigerian students pursuing tertiary education. It was introduced by the outgoing speaker of the House of Representatives, Femi Gbajabiamila. This legislation aims to address the financial challenges faced by students and pave the way for better opportunities. The new act provides an interest-free loan.
The Student Loan Bill provides financial support for students’ tertiary education expenses, including school fees, accommodation, textbooks, research, and educational materials. The loan amount varies based on the student’s program and department, with priority given to technical courses.
To qualify for the loan, students must have secured admission into any tertiary institution, with federal and state universities, polytechnics, and colleges of education included. Additionally, applicants should come from families with an annual income below N500,000 and provide two guarantors, such as civil servants above Level 12 or lawyers with a minimum of 10 years post-call experience.
Students will be ineligible for the loan if they have a history of loan defaults, proven cases of exam malpractice, convictions for dishonesty or fraud, prior convictions related to drug abuse, or if their parents have defaulted on a loan before. Applications are to be submitted to the Students Affairs Offices of respective institutions along with the required documents. Qualified applications will then be officially forwarded to the Chairman of the Education Fund Committee in their territory.
The Student Loan Bill establishes an Education Bank and money will be disbursed through Commercial Banks. The committee will mobilize funds and ensure a steady supply of loans to Nigerian students pursuing tertiary education. With an initial share capital of N1 billion, the federal government will hold 100% of the shares.
The Education Bank will be supported by the Student Loan Fund, which will receive contributions from education bonds, interest from bank deposits, education endowment fund schemes, 1% of taxes, levies, and duties collected by government agencies, 1% of profits from oil and other natural resources, as well as grants, gifts, and other endowments.
Applications will be reviewed and approved by the Minister of Education within 30 days. Once approved, funds will be disbursed immediately. Loan repayment begins two years after completing the National Youth Service Corps (NYSC) program. Repayments will be made through a 10% direct deduction from beneficiaries’ salary accounts. Self-employed graduates must document their income within 60 days and remit 10% of their monthly profits.
The Student Loan Bill emphasizes the importance of loan repayment. Individuals who benefit from the loan but refuse to repay it may face penalties, including two years of imprisonment or a fine of N500,00.
The signing of the Student Loan Bill marks a new era for Nigerian education, breaking financial barriers and expanding access to quality tertiary education. This initiative empowers students from diverse backgrounds and aims to nurture a generation ready to contribute to national development. Collaboration between students, institutions, and the government will be vital for the program’s success and a brighter future for Nigerian education.