The Student Loan Bill was signed into law by President Bola Tinubu on Monday, June 12, 2023. The bill, introduced by outgoing House of Representatives Speaker Femi Gbajabiamila, aims to provide Nigerian students with interest-free loans.
Waffi TV reported, the legislation passed its second reading in the lower house on May 23, 2023.
Experts in the higher education sector have argued that the establishment of an education bank may allow Federal Government-owned tertiary institutions to introduce tuition fees. Some universities owned by the Federal Government have already begun announcing increases in tuition fees. In December 2022, The PUNCH exclusively reported a 200% fee hike in certain Federal Government-owned universities. It is believed that the introduction of the education bank will help address the funding gap in tertiary institutions.
The bill, which our correspondent sighted on Monday, outlines the conditions that students must satisfy when applying for loans under this Act. Students are required to apply to the Bank Chairman through their respective institutions.
The conditions to be met are as follows:
A. To be eligible for a loan under this Act, students must meet the following conditions:
- Students must have obtained admission into a public Nigerian University, Polytechnic, college of education, or any TVET school.
- The income of the applicant or their family must not exceed N500,000 per annum.
- The applicant must provide a minimum of two civil servants as guarantors. The civil servants should have a minimum of level 12 years in service. Alternatively, the applicant can provide a Lawyer with at least 10 years of post-call experience, a Judicial officer, or a Justice of Peace as guarantors.
B. Students who have previously defaulted on loans, been found guilty of exam malpractice, felony, or drug offenses will not be eligible for consideration.
C. Students whose parents have previously defaulted on loans will not be eligible for consideration.
Once the aforementioned conditions have been fulfilled, loan applications will be submitted through the Students Affairs Office of each institution. The submission will consist of a list containing all qualified applicants from the institution, accompanied by a cover letter signed by either the Vice-Chancellor, Rector, or the head of the institution, along with the Student Affairs representative.
On the repayment, the act states that “Any beneficiary of the loan to which this Act refers shall commence repayment two years after completion of the National Youth Service Corps programme. Repayment shall be by direct deduction of 10 per cent of the beneficiary’s salary at source by the employer.
“Where the beneficiary is self-employed, he shall remit 10 per cent of his total profit monthly to the student loan account to be prescribed by the bank.
“For the purpose of sub-section 3 above, a self-employed person shall, within 60 days of assuming that status, submit all information such as the name of business, address and location, registration documents, registered, name of bankers, names of partners, name of directors and shareholders to the Commission.
“Anyone 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.”
Credit: The Punch Newspaper