President Bola Tinubu signed into law the student loan bill on Monday, June 12, 2023. The bill was first introduced in 2016 by Femi Gbajabiamila, former speaker of the House of Representatives to the lower chamber.
The bill, titled; “An Act to Provide Easy Access to Higher Education for Nigerians through Interest-Free Loans from Nigeria Education Bank Established in this Act with a View To Provide Education for All Nigerians and for Related Matters” is to ensure that all Nigerians have access to quality education irrespective of their financial status.
The student loan bill will enable Nigerian students to have access to interest-free loans.
Stakeholders believe that the bill will serve as a succour to many indigent students across the country. The bill is expected to see the establishment of an education bank.
What it means
Experts explained that the federal government-owned public tertiary institutions are at liberty to introduce tuition fees, with the establishment of an education bank.
The Act enables all indigent Nigerian students to have equal rights to access the loan without any form of discrimination arising from gender, religion, tribe, position, or disability of any kind.
The Act states that the loan shall be given to indigent Nigerian students only for the payment of tuition fees.
How it works
It is money borrowed from the federal government in order to pay for tertiary education tuition fees. The loan has to be paid back later, along with no interest attached to it.
According to Anthonia Ochie, a legal practitioner, “It is a good thing if well implemented. Implementation is the problem. Student loan is for easy access to education as obtainable in many developed countries. Students are to pay back when they start to work.”
However, Charles Onwunali, a senior lecturer at the University of Lagos insists that the country does not have a system in place to monitor the disbursement and payment of the loan.
“They want to use it to increase school fees. We don’t have the system to monitor it. Even in advanced countries students still default in payment of the loan, talk-less in Nigeria where the system is porous,” he noted.
How to Apply
There is hereby established bank known as the Nigerian Education Bank, which shall have the functions and powers conferred on it by the Act.
Students applying for loans under this Act must apply as provided under section 17 of this Act (to the chairman of the bank through their respective institutions), and upon satisfaction of the following conditions:
Students must have secured admission into any public Nigerian university, polytechnic, college of education, or technical and vocational education.
Applicant income or family income must be less than N500,000 per annum; Applicant must provide at least two civil servants as guarantors: of not less than level 12 years in service; or a lawyer with at least 10 years post-call experience; a judicial officer; or a justice of the peace.
Students who have defaulted on previous loans; found guilty of examination malpractices, felonies, or drug offenses will not be considered.
Students with parents who have defaulted in respect of previous loans will not be considered.
All applications will be submitted through the students’ affairs office of each institution via a list of all qualified applicants from the institution accompanied by a cover letter signed by the vice chancellor or rector or the head of the institution and student affairs.
Any beneficiary of the loan to which this Act refers shall commence repayment two years after completion of the National Youth Service Corps (NYSC) programme.
Repayment shall be by direct deduction of 10 percent of the beneficiaries’ salary at source by the employer.
Where the beneficiary is self-employed, he shall remit 10 percent of his total profit monthly to the student loan account to be prescribed by the bank.
Victor Usifor, a legal practitioner describes it as a welcome development aim at unlocking the poverty trap that has over the years pushed some persons out of school.
“It will also reduce street crime and other criminal activities among the youth.
I also think in a country like ours, that does not have a functional database, it might be difficult to determine the precise individual income,” he noted.
Friday Erhabor, director of media and strategy at Marklenez Limited similarly it is the best section the president has taken so far.
“It is an indication that finally, the Nigerian government is listening to the needs and yearning of Nigerian students and youth generally.
With the student loan bill, students can apply for a study loan which they will repay two years after graduation.
That is after their youth service through a 10 percent deduction on a monthly basis from their salary why those that chose to run their business will have the loan deducted from profit from their business.
This is a huge relief for students, especially those from low backgrounds who have no one supporting their education,” he said.