President Bola Tinubu on Monday, June 12, 2023, signed into law the Students Loan Bill, thus ushering in a transformative era for educational funding in Nigeria.
The new law which provides for the establishment of an education bank, offers interest-free loans to poor Nigerian students seeking higher education in public Universities, Polytechnics, and Colleges of Education in Nigeria.
WHAT YOU SHOULD KNOW ABOUT THE LAW?
The interest-free loan according to the new act can only be accessible to students studying within Nigeria and only for the purpose of paying their tuition fees. This means that Nigerian students studying in foreign institutions cannot have access to the loan.
The new act provides for the creation of the Nigerian Education Bank which would be responsible for matters pertaining to the New Student loan as announced by President Tinubu
Each Applicant for the new loan according to the act must provide guarantors who must be a civil servant with at least 12 years of experience, a lawyer with at least 10 years post-call-to-bar experience or a Judicial Officer, or a Justice of Peace.
WHO IS ELIGIBLE FOR THE NEW LOAN UNDER THE ACT?
You cannot access or qualify for the new Nigerian Students Loan if you have,
previously defaulted on any loan granted by any organization,
been indicted for examination malpractices by any school authority, convicted of Felony or Offenses of Dishonesty or Fraud in the past,
been convicted of drugs related offenses, or
your parents have in the pasted defaulted on a student loan or any other loan granted to them
Lastly, applicants for the new Student Loan under the act, or their family’s income must be less than N500,000 per Annum
HOW WOULD YOU REPAY THE LOAN?
The repayment terms for beneficiaries of the New Nigerian Students loan according to the act shall commence two years after you have completed your National Youth Service Corps (NYSC) program. The deduction shall be made from your salary through a direct deduction of 10% of your salary from your employer and credited to the Loan Fund.
In the event that you change jobs, you must notify the Chairman of the Committee of the loan fund within 30 days of resuming employment with your new employer with details of the new job.
For graduates who then wish to be self-employed after graduation, you must submit your business name, address, location, registration documents, bank details, partner names, and director/shareholder names, to the Loan Funds Committee within 60 days. You must also remit 10% of your total monthly profit to the Loan Fund’s account.
FAILURE TO REPAY YOUR STUDENT LOAN:
Failure to repay your student loan as required under subsection (5) or aids in such default, you are deemed to have committed an offense and, upon conviction, you are liable to a fine of N500,000 or imprisonment for a term of two years, or both.