The significance of education has surpassed mere necessity; it’s now woven into the fabric of the typical Nigerian household, regardless of social status.
Education, much like other compelling pursuits, comes with a substantial price tag. Consequently, platforms have emerged in Nigeria to facilitate the acquisition of student loans for financing educational endeavors.
President Bola Tinubu recently endorsed the Access to Higher Education Act, 2023—an instrumental legislation offering interest-free education loans to Nigerian students pursuing higher education.
This article focuses on the Nigerian students loan requirements, venturing into the intricacies of the student loan legislation, providing a comprehensive understanding of everything from application procedures and repayment structures.
Defining a Student Loan
A student loan is designed to aid students in covering educational expenses and related costs. Notably, these loans stand apart due to their comparably lower interest rates and flexible repayment schedules.
A Glimpse of the Student Loan Legislation in Nigeria
The Student Loan Act, also known as the Student Loan Bill, establishes the Education Loan Fund, designed to assist Nigerians in financing tertiary education. Under this initiative, students can begin repaying the loan two years after completing their service in the National Youth Service Corps (NYSC).
Initially proposed by Femi Gbajabiamila, the former Speaker of the House of Representatives, the bill was reintroduced in 2019 and gained momentum within the National Assembly by November 2022. Notably, this followed an eight-month-long strike by the nation’s university workers’ union, protesting inadequate working conditions and other grievances.
According to the newly enacted law, the Fund will be financed through various avenues and will engage in productive ventures.
The Act delineates multiple funding sources, including one percent of all federal government profits from oil and minerals, and an additional one percent of taxes, levies, and duties collected by the Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIS), and Nigerian Customs Service (NCS).
Moreover, the Education Loan Fund will secure financial backing from education bonds and education endowment fund schemes. Additionally, the initiative warmly welcomes contributions in the form of donations, gifts, grants, and endowments. Furthermore, any revenue derived from alternative sources will be harnessed to bolster the Education Loan initiative.
Regarding the management and oversight of the fund, Section 5 of the Act specifies that the fund will be securely held within the Central Bank of Nigeria (CBN). A dedicated 11-member special committee will supervise its administration. The committee’s leadership will be assumed by the CBN governor, and in accordance with the law, the chairperson will appoint a secretary to support the committee’s operations.
As stipulated by the law, the committee composition includes:
- CBN Governor (Chairperson)
- Secretary (appointed by Chairperson)
- Minister of Education or their representative
- Minister of Finance or their representative
- Auditor-General of the Federation
- Chairman, National Universities Commission (NUC)
- Representatives of various educational institutions’ forums
- Representatives of labor unions and professional associations
This committee will establish regulations and guidelines governing loan management, administration, disbursement, and repayment. All stakeholders, including parents, students, beneficiaries, and banks, must adhere to these regulations.
Nigerian Students Loan Requirements and Application Process
Eligibility for the loan is confined to students enrolled in government-owned tertiary institutions once the program is implemented. Discrimination based on gender, religion, tribe, position, or disability is prohibited.
The term “institutions of higher learning” encompasses public universities, polytechnics, colleges of education, and government-established vocational schools.
The Nigerian students loan requirements state that an applicant’s annual income or family income must be below N500,000. Two guarantors are required, meeting criteria such as civil service level 12, a lawyer with a decade of post-call experience, a judicial officer, or a justice of the peace.
Disqualification may occur if the applicant has committed examination malpractice, been convicted of a felony, or engaged in dishonesty or fraud.
Nigerian Students Loan Repayment Structure
The Act doesn’t specify loan amounts or repayment periods. Repayment commences two years after completing the NYSC program. Beneficiaries must remit 10 percent of their income each month, or for self-employed individuals, 10 percent of monthly profits.
Failure to repay may result in an N500,000 fine, two-year imprisonment, or both, as outlined by the Act.
- Submit applications to the committee chairperson through their banks.
- Include a signed cover letter from the institution head.
- Provide an admission letter, two guarantor letters, and photographs.
- Furnish employment evidence and details.
- For self-employed guarantors, include business registration and banking information.
The committee will communicate the application status within 14 days and disburse funds based on availability.
Available Student Loan Options in Nigeria:
1. Access Bank Student Loan
- Offers short-term financing for tuition fees.
- Up to ₦5 million available.
2. GT Bank Student Loan
- Covers up to ₦5 million with a maximum 4-month tenure.
- Competitive interest rates.
- Immediate access to the loan.
3. First Bank FirstEdu Loan
- Targets school facility upgrades and funding gaps.
- Maximum ₦10 million.
- Collateral: domiciliation of school fees with First Bank.
4. Federal Government Education Loan
- Concessionary interest rates for easy student fund access.
- Special emphasis on teacher development, secondary education, and special needs intervention.
With various funding options available for education, the endeavor need not be daunting. The Nigerian government’s student loan program is accessible for government tertiary institution students who meet requirements. To make an informed choice, compare loan offers using this platform and secure the best deal.
Originally posted 2023-08-16 22:04:05.