The signing of the student loan bill into law has swept a new wave across the country. This showed how intentional and passionate the new president of Nigeria, His Excellency Bola Tinubu, is towards giving qualitative education and aiding the education sector.
If you are reading this article, we believe you are interested in knowing everything about this student loan act, how to benefit from it, the eligibility criteria, and how to apply.
In this great guide, we shall discuss in detail everything you need to know about this loan scheme. Stay tuned and pay close attention.
Overview Of The Student Loan Act
On June 12, 2023, while the nation commemorates Democracy Day and its significance in contemporary society, the student loan bill, passed to the third reading on May 23 in the lower chamber, was signed into law.
It is worth noting that a bill is an act yet to be approved or made a law. Femi Gbajabiamila, the current ex-speaker of the House of Representatives, geared the legislation of this student loan.
This student loan aims to provide an avenue to help Nigerian students, especially those who are struggling to shoulder the financial burden of tertiary education. In addition, this bill goes ahead to align with the manifestoes of the president in revamping the education system for the better.
“Institutions will charge more cost-reflective tuition fees, and with consideration for employment rates and other conditions, the loan programme will have a maximum borrowing limit and flexible repayment provisions,” he said.
As we proceed, we will discuss other details about this student loan act. Keep reading!
Eligibility Criteria And Requirements For Obtaining A Student Loan
While the new student loan fund is here to aid struggling Nigerian students, it is imperative to know that one must be qualified for it before getting awarded. Here are the eligibility criteria for obtaining a student loan in Nigeria;
All Tertiary Students Are Eligible
Once you are a student in any Nigerian tertiary institution, be it a university, college of education, polytechnic, technical, or any vocational school in Nigeria, you can apply for a student loan. However, there are other factors to consider too.
The student loan act stipulates that the student seeking the loan or the family should have an income less than NGN500,000 annually. This means that anything above N500,000 in a year disqualifies the applicant.
The applicants are expected to present a minimum of two guarantors who are civil servants and must have been in service for a minimum of 12 years. Or they can present a lawyer with not less than ten years of experience.
The applicants and their parents must ensure that they have not defaulted in their previous loan dealings, as this will automatically disqualify them or their children from obtaining a student loan following the new student loan act.
Therefore, it is wise to keep a good credit history, as this will increase your chances of obtaining a student loan.
Show Of Diligence
Intending applicants must show diligence in their studies, as the government won’t be happy funding a fruitless venture. Being diligent and dedicated to one’s studies helps to boost the chances of securing a student loan.
Good Moral Conduct
Applicants must show good moral conduct as responsible citizens of the country. They must not get involved in examination malpractice, dishonesty, felony, and other ill behaviors.
Documents Needed To Obtain A Student Loan In Nigeria
The following documents are required from the student loan applicants:
- A cover letter signed by the rector, vice chancellor, or the head of the institution.
- A copy of one’s admission letter.
- A letter from the guarantors accepting accountability for the applicant and recommending the student.
- At least two passport photographs from the guarantors.
- Proof of employment and information about the guarantors.
How To Apply For Student Loan In Nigeria
To apply for a student loan in Nigeria, follow the steps below;
- Gather all the required documents, including passport and cover letter.
- Ensure that you meet all the eligibility criteria for obtaining your desired loan. This means that you have to take your time to review the terms and conditions of the student loan.
- With your documents, like a cover letter and application letter, head to your bank and apply. Yes, the act stipulated that all applications must be made through the bank. The bank will then communicate with the chairman of the committee.
- Wait for approval. The committee will review your application and, within 14 days of submission, will notify you of the status of your application. In section 18 (4) of the student loan act, if the loan application is approved, the committee must disburse the loan within 30 days of the application reaching the chairman.
The Student Loan Repayment Terms
There are terms and conditions attached to the student loans. However, the repayment shall begin two years after the applicant has completed his or her National Youth Service Corps (NYSC) program.
- If the applicant is a salary earner, 10% of his salary will be deducted monthly by the employer to the Fund. And if there are any job changes, the applicant is obligated to notify the committee chairman within 30 days of commencement.
- If the applicant is self-employed, they are expected to remit 10% of his total income every month to the Fund. Meanwhile, this should be done after the status of the individual has been made known to the committee. The individual is expected to provide the following; business name, address, location, registration documents (if applicable), bank details, partner names, and director/shareholder names to the Committee within 60 days
What Happens If I Default The Student Loan Act?
Following the provisions of subsection (5) of the student loan act, anyone who defaults or helps in defaulting the student loan act is expected to face any of the following after conviction;
- A fine of NGN500,000.
- An imprisonment term of two (2) years.
- Or both terms, depending on the gravity of the offense.
7 Facts About The Student Loan Act
The following are the notable facts about the student loan act in Nigeria;
- The fund provides for all education-related matters like tuition fees, textbooks, and research.
- It is made explicitly for tertiary students, irrespective of the institution.
- It takes 30 days to approve and disburse the funds once the application gets to the committee’s chairman.
- The loan is only accessible to students in Nigeria.
- The repayment shall begin two years after the NYSC program.
- The student’s or their parent’s income should not exceed NGN500,000 yearly.
- Application is made through the bank, and defaulters are likely to serve jail terms.
Frequently Asked Questions
Who is qualified to apply for a student loan?
Only tertiary students who meet all the eligibility criteria are qualified for the student loan. Some of the requirements are;
- Having a yearly income of or less than NGN500,000.
- Being a passionate and diligent student
- Having a good credit history
- Being of good moral and social conduct.
Which bank is best for education loans?
In Nigeria, student application loans are submitted to the bank. There is no better bank. All the banks licensed by the Central Bank of Nigeria accept student applications. It is a matter of the applicant’s choice and bank.
How to use student loans?
You can use a student loan for any of the following;
- Tuition fees
The student loan act is expected to enrich the education bank and aid Nigerian students to cater to their needs, especially the struggling ones.
The application must be made through the bank with the required documents. At the same time, the repayment shall begin two years after the NYSC programs.
We believe that this article was helpful to you. Feel free to use the comments to share your thoughts and ask questions.