President Bola Tinubu recently signed the Student Loan Bill into law, ushering in a new era of affordable education for Nigerian students.
As the bill is set to become operational in September, The Informant247 aims to provide a comprehensive guide on the application process and functionality of the loan facility.
To be eligible for the loan, students must fulfil the conditions outlined in Section 17 of the Act. These requirements include admission into accredited institutions, adherence to income limits, and provision of guarantors.
Students must secure admission into Nigerian universities, polytechnics, colleges of education, or vocational schools established by the Federal Government or any state government. The applicant’s individual or family income should not exceed N500,000 per annum.
Additionally, each applicant must provide a minimum of two guarantors falling into specific categories, such as civil servants of at least level 12, lawyers with 10 years of post-call experience, judicial officers, or justices of the peace.
Certain circumstances disqualify applicants from accessing the loan, such as previous loan defaults, involvement in exam malpractice, convictions, drug abuse, or parental loan defaults. Defaulting on a previous loan, being found guilty of exam malpractice, having a criminal record related to dishonesty or fraud, or being convicted of drug offences all lead to disqualification.
While the application process may seem complex, it involves submitting the application through the applicant’s bank to the Committee Chairman established under the Act.
The application should be accompanied by a cover letter from the institution’s vice-chancellor, rector, or head, along with various documents, including a copy of the student’s admission letter. A recommendation letter from the guarantors addressed to the Committee Chairman, accepting liability in case of default, is also required.
The application should include passport photographs of each guarantor, information on their employment, proof of employment, and business registration details if self-employed.
The Committee is obligated to communicate the application’s status within 14 days of receipt and complete processing and disbursement within 30 days, as per Section 18 (4) of the Act.
Repayment of the loan starts two years after completing the National Youth Service Corps program. Repayments are facilitated through a direct deduction of 10% from the beneficiary’s salary by their employer.
In the case of a job change, beneficiaries must notify the Committee within 30 days and provide details of the new job. Self-employed beneficiaries must remit 10% of their monthly profit to the Fund and submit relevant business information within 60 days.
Defaulting on loan repayments or aiding default is considered an offence, punishable by a fine of N500,000, imprisonment for two years, or both. These penalties highlight the importance of adhering to repayment obligations, ensuring the sustainability of the loan program and the availability of funds for future students.
The student loan bill aims to provide affordable education opportunities to Nigerian students by opening doors to accessible funding. It represents a significant step forward in addressing the financial challenges faced by students and promoting equal educational opportunities. As the loan program becomes operational, it is crucial for eligible students to familiarize themselves with the application process, eligibility requirements, and repayment obligations to fully benefit from this transformative initiative.
