FG releases requirements for access to newly signed student loan

In the move to enhance access to high education in Nigeria, President Bola Tinubu has signed the Student Loan Bill into law, which ushers in a new era for education funding in Nigeria.

The Student Loan Act opens doors to affordable education and has a straightforward, streamlined application documentation process.

How to apply for the Students Loan

Prospective students seeking access to the loan must follow specific steps to initiate their applications.

Prospective students are required to submit relevant documents to their respective banks.

Eligibility

1. Admission into Accredited Institutions

2. Income Limit not exceeding N500,000 per annum:

3. Guarantors: Applicants must provide a minimum of two guarantors each who must fall into one of the following categories:

4. Civil servants of at least level 12 in the service,

5. Lawyers with at least 10 years of post-call experience,

6. Judicial officers or Justices of the peace.

Ineligibility for Loan Access

If a student is proven to have defaulted on any previous loan granted by any organization, they are disqualified from accessing the loan.

Exam Malpractice

Conviction of felony or offenses of dishonesty or fraud. Students convicted of a felony or any offense involving dishonesty or fraud are ineligible for the loan. Drug Offenses: Students convicted of drug offenses are disqualified from accessing the loan.

Parental loan default

If any student’s parents have defaulted on a student loan or any other loan granted to them, the student will be disqualified from receiving the loan.

Application Process and Documentation

Submission through the applicant’s bank and a cover letter signed by the vice-chancellor, rector, or the head of the institution, along with the student affairs officer of the institution, should accompany the application.

Required Documents

Each application must be accompanied by several documents, including a copy of the student’s admission letter. The Committee is obligated to communicate the status of the applicant’s application within 14 days of receiving the application.

Disbursement

The Students Loan Bill sets out the process for loan disbursement: Timely Processing: Processing any applicant’s application and issuance shall be completed within 30 days of the application reaching the Chairman of the Committee, subject to Section 18 (4) of the Act. This ensures that loans are processed efficiently and promptly.

Repayment

The repayment terms for beneficiaries of the loan are outlined in the Students Loan Bill:

Commencement of Repayment

Loan repayment shall commence two years after the National Youth Service Corps program is completed.

Salary deduction

Repayment shall be facilitated through a direct deduction of 10% of the beneficiary’s salary at source by the employer.

The deducted amount will be credited to the Fund. In the event of a job change, beneficiaries must notify the Chairman of the Committee within 30 days of resuming employment with the new employer, providing details of the new job.

Requirements for self-employed persons

Self-employed beneficiaries must remit 10% of their total monthly profit to the Fund.

Self-employed individuals assuming this status must submit relevant information, such as business name, address, location, registration documents (if applicable), bank details, partner names, and director/shareholder names, to the Committee within 60 days.

Any individual who defaults on the provisions of subsection (5) or aids in such default commits an offense and, upon conviction, is liable to a fine of N500,000 or imprisonment for two years, or both.