Key Facts About Nigeria’s Student Loan Law: 8 Things You Should Know
According to reports, President Bola Tinubu signed the Access to Higher Education Bill, also known as the Student Loan Bill, into law on June 12th. The bill was proposed by Femi Gbajabiamila, the Speaker of the House of Representatives and Chief of Staff to the President-elect, and it had been approved by the Legislative in May 2023.
The main purpose of this law, as stated in its title, is to provide easy access to higher education for Nigerians through an interest-free loan from the Nigerian Education Bank established by this Act.
To facilitate the provision of education opportunities to Nigerians, the newly enacted law establishes the Nigerian Education Bank, which offers interest-free loans for educational purposes. Here are eight important facts about the new law:
- Application Process: All applicants must apply through the Student Affairs Office of their respective institutions (University, College of Education, Polytechnic, or Vocational School) established by the Federal Government or any State Government. The application is to be made to the Chairman of the Nigerian Education Bank.
- Income Requirement: Applicant’s income or family income should be less than N500,000 per annum.
- Guarantors: Each applicant must provide two guarantors who must be either a civil servant with at least 12 years of experience, a lawyer with at least 10 years of post-call experience, a Judicial Officer, or a Justice of Peace.
- Disqualification: Students can be disqualified if they or their parents have defaulted on any loan in the past, if the student has been convicted of drug-related offenses or any felony involving dishonesty or fraud, or if they have been found guilty of exam malpractices by any school authority.
- Loan Processing and Disbursement: The Bank is required to process and disburse the loan within 30 days of receiving the application.
- Loan Purpose and Interest: The loan granted to students is exclusively for tuition payment and is interest-free.
- Loan Repayment: Repayment of the loan begins two years after the completion of the applicant’s NYSC program. An employer will deduct 10% of the applicant’s salary at source for loan repayment. Self-employed individuals are required to remit 10% of their total monthly profit for loan repayment.
- Penalties for Defaulters: Defaulters, as well as those aiding them, are liable to imprisonment for two years, a fine of N500,000, or both upon conviction.
