Students Loans Act: What You Need to Know
On the 12th of June 2023, President Bola Tinubu signed into law the Students Loans (Access to Higher Education) Act. The Act provides interest-free educational loans for Nigerians who are eager to pursue higher education.
Indigent undergraduate students, including those studying law, will greatly benefit from the significant impact of education loans.
Here are some salient things you need to know about the application for and grant of loans under the Act.
a) Tuition Fees Only
The loans shall be granted to students exclusively for the payment of tuition fees only. The loans will not encompass expenses such as hostel fees, departmental fees, management fees, and other charges that students are obligated to pay.
b) Eligibility of Applicants/Students
Students applying for loans must satisfy the following conditions to be eligible for the loan:
1. Applicants must have obtained admission into a Nigerian university, polytechnic, college of education, or any vocational school established by either the Federal Government or any state government in the federation.
2. The annual income of the applicant ortheir family must be below N500,000.
3. Additionally, the applicant must provide a minimum of two guarantors, and each of the guarantors shall be:
(a)A civil servant at a level of at least 12 in the service;
(b)A lawyer with a minimum of 10 years of post-call experience.
(c)A judicial officer.
(d)A justice of peace.
c) Disqualification of Applicants/Students
A student will be disqualified from accessing the loan if:
1. He is proven to have defaulted in respect of any previous loan granted by any organization;
2. He has been found guilty of exam malpractice by any school authority.
3. He is convicted of a felony or any offence involving dishonesty or fraud.
4. He has been convicted of drug offenses.
5. Any of the parents have defaulted inrespect of student loan or any loan granted to the person.
d) How to Apply for Loan
Every application must be processed through the applicant's bank to the Chairman of the Committee established by this Act.
Each application shall be accompanied by:
1. A copy of the student’s admission letter.
2. A cover letter bearing the signatures of the vice-chancellor, rector, or head of the institution, as well as the student affairs officer of the respective institution.
3. A letter by the guarantors addressed to the Chairman of the Committee.
4. Two passport photographs from each of the guarantors, name of employer, and evidence of being so employed by the named organization.
5. Particulars of the guarantor's business registration with the Corporate Affairs Commission or any other appropriate authority and his bankers, where the guarantor is self-employed.
e) Disbursement of Funds
The Committee shall communicate to the applicant on the status of his application within 14 days of the receipt of any application.
Processing of any applicant’s application and disbursement shall be made within 30 days of the application reaching the Chairman of the Committee. Disbursement shall be made once the fund is available.
f) Repayment of the Loan
Any beneficiary of the loan shall commence repayment two years after completion of the National Youth Service Corps program (NYSC).
Repayment shall be by direct deduction of 10% of the beneficiary's salary at source by the employer and credited to the Fund.
Where the beneficiary is self-employed, he shall remit 10% of his total profit monthly to the Fund.
Inconclusion, the Act marks a significant milestone in providing interest-free educational loans to Nigerian students pursuing tertiary education.
This legislative effort reflects the commitment to expanding access to higher education and empowering deserving students to pursue their academic aspirations.