Student Loan Bill Nigeria: How To Apply and Requirements

Eligibility For The Loan

For Nigerian students to qualify for a student loan, they must fulfill the following criteria:

Admission into Accredited Institutions

Prospective students must have successfully gained admission into recognized Nigerian universities, polytechnics, colleges of education, or vocational schools established by the Federal Government or any state government.

Income Limit

The applicant’s individual or family income should not exceed N500,000 per annum.

Guarantors

Each applicant is required to provide a minimum of two guarantors, which must belong to one of the following categories:

Civil servants of at least level 12 in the service.
Lawyers with a minimum of 10 years of post-call experience.
Judicial officers.
Justices of the peace.

Ineligibility For The Loan

The following factors prevent students from obtaining a loan.

Previous Loan Default

If you’ve had trouble repaying debts in the past and have defaulted on any previous loans from any organization, it may hinder your chances of getting the loan this time around.

Parental Loan Default

Unfortunately, if either of your parents has a history of missing payments on a student loan or any other loan, it could render you ineligible for the loan as well.

Drug Offenses

If you’ve been convicted of crimes involving illegal substances, it’s important to note that you won’t be able to apply for the loan.

Exam Misconduct

Engaging in unethical practices during tests, as determined by school officials, can lead to disqualification from loan eligibility. It’s crucial to maintain academic integrity.

Conviction of a Felony or Crimes involving Dishonesty or Fraud

If you’ve been legally convicted of committing a felony or engaging in offenses characterized by dishonesty or fraud, it may unfortunately disqualify you from applying for the loan.

How To Apply Student Loan

All applications must be sent to the Chairman of the Committee set up by the Act through the applicant’s bank. Here’s what you need to do to apply:

You’ll need a duplicate of the admission letter received by the student.
You’ll need a letter from the guarantors addressed to the Chairman of the Committee, recommending the student for the loan and accepting liability in the event of default.
You’ll need a cover letter signed by the vice-chancellor, rector, or head of the institution, along with the student affairs officer of the institution.
Each guarantor must provide two passport-sized photos, information about their work and documentation of that employment with the designated organization, as well as information on the registration of their firm or, if they are self-employed, the applicable authorities.

After submitting your application, the Committee will notify you of the status of your application within 14 days of receiving it. After the notification, they will process your application and process your payment. You are likely to receive the payment within 30 days.

How To Repay Your Student Loan

You’ll start repaying the loan two years after completing the National Youth Service Corps program.
To make repayment easier, your employer will deduct 10% of your salary at the source and credit it directly to the Fund.
If you’re self-employed, you’ll need to contribute 10% of your total monthly profit to the Fund.
If you change jobs, it’s important to inform the Chairman of the Committee within 30 days of starting your new employment. Make sure to provide all the necessary details about your new job.
In case you’re self-employed, it’s crucial to submit relevant information, like your business name, address, location, registration documents (if applicable), bank details, partner names, and director/shareholder names, to the Committee within 60 days.

Penalty For Non Loan Payment

A violation of the law is committed if you don’t pay back the loan or if you help someone else in doing so. An N500,000 fine, a two-year jail sentence, or both might be imposed on you if you are proven guilty. Certain conditions and penalties for late payments are in place to ensure that everyone takes responsibility for their actions and repays their debts on time. It guarantees sufficient resources for incoming students and helps make the loan program financially viable.

Read Too: Lapo Loan App: How to Apply, Ussd Code, Types and Interest Rate

Why Education Loans For Nigerian Students?

In the 2023 budget, N1.08 trillion was allocated for education. This amounts to around 5.3 percent of the overall N20.5 trillion budget, less than the minimum of 15 percent that the United Nations Educational, Scientific, and Cultural Organization (UNESCO) recommends for developing nations. The experimental student loan program aims to increase education access for all Nigerians, regardless of background.

Also, this will enable universities to increase their cost-reflective tuition costs. Nigerians who want to pursue higher education can pay the tuition that the schools may soon adopt, thanks to the education bank, which already exists. There will be a maximum amount that each student may borrow under the loan program, and the repayment terms must be flexible.

Benefits Of The Student Loan

Enhanced Access to Higher Education

The program aims to increase access to higher education by providing financial assistance to students who have gained admission into recognized Nigerian institutions, including universities, polytechnics, colleges of education, and vocational schools.

Affordability

The student loan program addresses the issue of affordability by offering financial support to students from families with an individual or family income not exceeding N500,000 per annum.

Streamlined Application Process

The Students Loan Bill introduces a clear and streamlined application process, making it easier for eligible students to apply for the loan.

Increased Funding for Education

The program contributes to the overall funding for education in Nigeria, supplementing the allocated budget and enabling students to pursue their educational aspirations.

Guarantor Support

By requiring a minimum of two guarantors, including civil servants, experienced lawyers, judicial officers, or justices of the peace, the program provides additional support and security for students in repaying their loans.

Loan Disbursement Procedures

The loan disbursement procedures outlined in the bill ensure efficient and timely delivery of funds to eligible students, allowing them to cover their educational expenses.

Flexible Repayment Terms

The student loan program offers flexible repayment terms that begin two years after completing the National Youth Service Corps program. The repayment process is facilitated through direct salary deductions of 10% for employees or 10% of monthly profit for self-employed individuals.

Accountability and Responsibility

The penalties outlined in the bill for loan default or aiding in default contribute to fostering accountability and responsibility among loan recipients, ensuring the sustainability of the loan program and the availability of funds for future students.

Equal Educational Opportunities

By making higher education more accessible and affordable, the student loan program aims to offer equal educational opportunities for all Nigerians, regardless of their backgrounds.

Cost-Reflective Tuition Fees

The initiative allows institutions to implement cost-reflective tuition fees, giving them the ability to raise teaching standards and upgrade their facilities.

Future Educational Funding

By establishing a sustainable loan program, the Students Loan Bill ensures the availability of funds for future generations of students, creating a continuous cycle of support for higher education in Nigeria.

Frequently Asked Questions

What Is a Student Loan Bill?

The Student Loan Bill is legislation signed into law to provide a framework for providing loans to students pursuing higher education. It outlines the application process, eligibility requirements, loan disbursement procedures, and repayment terms to make education more accessible and affordable for students in Nigeria.

Are student loans revolving or installment loans?

Student loans are typically installment loans rather than revolving loans. IInstallment loans are repaid in a set amount of fixed monthly payments over a certain period. Revolving loans, on the other hand, like credit cards or credit lines, let borrowers access cash up to a certain limit while making variable payments dependent on the outstanding amount.

What does it mean to be in default on a student loan?

A loan is often deemed to default when the borrower has not made any payments for a certain amount of time. Legal action and salary garnishment are the only severe repercussions of student loan default. When borrowers default on a student loan, they must continue making the predetermined loan installments.

Does student loan cover studying abroad for Nigerian students?

No, student loans in Nigeria generally do not cover studying abroad. These loans are for students pursuing higher education within the country, such as in Nigerian universities, polytechnics, and colleges of education. The loan programs are to support local education and help students afford tuition fees within Nigeria.

Can A Student Get A Loan In Nigeria?

Yes, students in Nigeria can get loans to help pay for their studies. Several loan schemes and efforts, such as the Students Loan Bill, have been launched to aid qualified Nigerian students seeking higher education. These loans are intended to make education more accessible and affordable by assisting students in covering tuition and associated costs while attending approved schools.

Conclusion

The signing of the Students Loan Bill into law by President Bola Tinubu marks a significant step towards transforming education in Nigeria. The bill aims to enhance access to higher education and make it more affordable by introducing a clear and streamlined application process. Eligible students who meet the specified criteria can apply for the loan and receive financial assistance to pursue their educational aspirations. The program also ensures timely disbursement of funds and offers flexible repayment terms, supported by guarantors, to promote accountability and responsibility.