The Student Loan Bill was enacted into law by President Bola Tinubu on Monday, June 12, 2023. Femi Gbajabiamila, the outgoing speaker of the House of Representatives, introduced the bill that will give Nigerian students access to interest-free loans.
The proposal reportedly passed second reading in the lower chamber on May 23, 2023.
Experts in the higher education field have claimed that with the creation of an education bank, tertiary institutions owned by the Federal Government may now be free to enact tuition charges.
Some federally funded universities have already begun to announce an increase in tuition costs. For instance, The Punch in December 2022 reported exclusively on the announcement of a 200 percent fee increase by various Federal Government-owned universities. The creation of the education bank is anticipated to aid in closing the financial gap in academic institutions.
The draft, which was seen by reporters on Monday, stipulates that students who qualify for loans under this Act must submit an application to the Chairman of the Bank through their respective institutions.
i. The student must have been accepted into a public university, polytechnic, college of education, or TVET program in Nigeria; Family or applicant income must be less than N500,000 annually; A minimum of two guarantors must be provided by the applicant, and they must be civil employees with at least 12 years of service at level 12, lawyers with at least 10 years of post-call experience, judicial officers, or justices of the peace.
ii. Students who have defaulted on prior loans, been convicted of exam fraud, committed a felony, or engaged in drug use will not be taken into consideration.
iii. Students whose parents have defaulted on prior loans will not be taken into consideration.
Following the fulfillment of the aforementioned requirements, applications for the loans will be made through the student affairs office of each institution using a list of all qualified applicants from the institution and a cover letter signed by the vice chancellor, rector, or other appropriate institution head and the student affairs.
According to the law, “Any beneficiary of the loan to which this Act refers shall commence repayment two years after completion of the National Youth Service Corps program.” 10% of the beneficiary’s salary will be directly withheld from his or her paycheck as repayment by the employer.
“In cases when the beneficiary is self-employed, he must deposit 10% of his monthly gross income into the student loan account that the bank will provide.
A self-employed person must provide the Commission with all relevant information, including the name of the business, address, and location, registration documents, registered, name of bankers, names of partners, names of directors, and shareholders, within 60 days of assuming that status for the purposes of sub-section 3 above.
“Anyone found to be in default of the provisions of sub-section 4 above or found to be aiding the default of any of the provisions of this Act is guilty of an offence and, if convicted, shall be liable to imprisonment for two years or a fine of N500,000 or both.”
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