On the evening of June 12, 2023, the talk on social media revolved around a single topic—the newly signed student loan bill by Tinubu.
The Bill was introduced in November 2022 by Femi Gbajabiamila, Nigeria’s current Chief of Staff, who was a member of the House of Representatives at the time. This new Bill seeks to provide interest-free loans to students in tertiary institutions with the aid of a National Education Bank.
President Tinubu signs student loan bill into law [Vanguard Newspapers]
While this bill is seen as a step forward regarding its potential benefits, it has faced criticism regarding its implementation. Many members of the public are concerned about how students will be able to repay these loans, given Nigeria’s high unemployment rate and widespread poverty.
At the Citizen, I cover issues affecting Nigerian students, and this Bill has greatly interested me. In January, we published an article that shed light on Tinubu’s long-standing support for and endorsement of the bill since 2015, including its drawbacks.
ICYMI: Will Tinubu’s Student Loan Plan Work in Nigeria?
Here we are now, six months after that article was published. We’ll go into all the specifics of what the Bill entails. If you’re a student who still wishes to apply for a loan, this ABC information is for you. And if you are not a student, perhaps it’s time to consider taking another Jamb examination if you are interested in its benefits.
Who are these loans for?
Applicants who can access the loans must have the following:
- Admission to a Nigerian educational institution (university or polytechnic)
- Interest in taking the loan ONLY for tuition fees
- House Income that’s less than ₦500,000
- Two guarantors. These should be civil servants, lawyers or judicial officers who have been in service for more than 12 years
You won’t get these loans if you are/have:
Previously defaulted on loans
For the government, if you’re a chronic defaulter on loans given by previous organisations, you do not stand a chance of qualifying for the loan.
Wahala be like bicycle
Parents who are also loan defaulters
For the government, your parents’ sins are your sins too. If your parents also happen to be debtors on loans, either student loans or loans from other organisations, the applicant will be disqualified.
Guilty of exam malpractice and felonies
An aspiring applicant won’t be able to access the loans if a school board has found them guilty of exam fraud or felonies by any judicial court.
So much for second chances
How does the government plan to fund this loan?
Here’s the plan to fund the National Education Bank:
- Interests arising from deposits in the Bank
- Education bonds
- Education endowment fund schemes
- 1% of all taxes, levies and duties from the Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIS) and Nigeria Customs Service (NCS).
- Donations, gifts and grants
How does repayment of the loan work?
Every beneficiary is to commence repayment two years after completing the National Youth Service Corps (NYSC) programme. Before then, students’ academic records (which contain the year of graduation, NYSC enrollment year, and employment) will be monitored.
If the applicant is employed by an organisation, there will be a 10% deduction from their salary into the Student Loan Account until repayment is complete.
Entrepreneurs would have to remit 10% of their profit to the Student Loan Account as the bank prescribes while submitting their corporation’s details.
The punishment for defaulters? Two years imprisonment or the option of a fine of ₦500,000.
Just imagine being behind bars for defaulting to pay back
With this knowledge, how do I apply?
Interested applicants are expected to submit:
- A copy of the student admission letter
- A letter written by the guarantors addressed to the chairman and governing board of the Education Bank recommending the student and accepting liability.
- Two passport photographs from guarantors
- Corporate Affairs Commission (CAC) documents if the guarantor is self-employed
If interested, don’t snooze. You’ll only have 30 days after the admissions close for an academic year to submit your documents. After submission, you can expect your funds in no more than 30 days.
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