Student Loan Bill: How to Apply For Student Loan in Nigeria
After President Bola Tinubu signs the Student Loan Bill, which grants students access to loans for higher education, into law, applicants are expected to apply for the loan.
President Tinubu signed a measure into law on Monday, June 12, to assist struggling students in getting loans for university education.
The procedure would be supervised by the Central Bank of Nigeria through the yet-to-be-established Nigeria Education Bank, according to BBC Pidgin.
ASUU reacts to President Tinubu’s freshly signed student loan act As of now, no date for the start of the process has been specified. However, issues about how to proceed with the application have surfaced.
In this article, StudyLoaded has shared every detail of information you need to know about Student Loan Bills, How to Apply For Student Loan in Nigeria, Who can apply for Tinubu student loan in Nigeria, What is the Repayment Period or Plan, What banks offer Student Loans in Nigeria and their requirements.
What is a Student Loan?
A student loan was created to assist students in paying for their education and associated fees. This loan is different from other types of loans in that the interest rate is lower and the repayment schedule is much more flexible.
An Overview of the Student Loan Bill in Nigeria
This legislation, commonly known as the Student Loan Act, creates the Education Loan Fund to help Nigerians in financing their higher education.
Students can repay the loan in installments beginning two years after completing their participation in the National Youth Service Corps (NYSC) program under this arrangement.
The measure was reintroduced in 2019 by Femi Gbajabiamila, the immediate past Speaker of the House of Representatives, and received increasing attention from the National Assembly in November 2022.
Notably, this occurred just after the nation’s university workers’ union went on strike for eight months to protest bad working conditions and other issues.
The Fund, according to the newly passed laws, will be funded from multiple routes and will engage in other constructive activities.
The recently passed act states that the Fund will be funded through multiple routes and will engage in other constructive undertakings.
The Act indicates several funding sources, including 1% of all federal government profits from oil and other minerals, as well as 1% of taxes, levies, and duties collected by the Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIS), and Nigerian Customs Service (NCS).
Furthermore, the Education Loan Fund will be funded through education bonds and endowment fund schemes. Furthermore, donations, gifts, grants, and endowments will be accepted, as would any cash earned from other sources to support the Education Loan project.
Who manages and controls the fund?
Section 5 of the Act states that the money would be retained by the Central Bank of Nigeria (CBN) and will be administered by an 11-member special committee.
The CBN governor will chair the committee, and the law requires the chairperson to select a secretary. According to the law, the committee is made up of the following individuals:
- CBN Governor (Chairperson)
- Secretary (to be appointed by the Chairperson)
- Minister of Education or their representative
- Minister of Finance or their representative
- Auditor-General of the Federation
- Chairman, National Universities Commission (NUC)
- Representative of the Forum of University Vice-Chancellors
- Representative of the Forum of Polytechnic Rectors
- Representative of the Forum of Provosts of Colleges of Education
- Representative of the Nigeria Labour Congress (NLC)
- Representative of the Nigerian Bar Association (NBA)
- Representative of the Academic Staff Union of Universities (ASUU)
The committee will be in charge of developing regulations and guidelines for the Act’s management, administration, disbursement, and debt repayment. All stakeholders, including parents, student applicants, loan recipients, and deposit banks, shall be bound by these norms and guidelines.
The committee’s authority is defined in Section 5 (5) of the Act, which also requires adherence to the established norms and recommendations.
“…the Committee shall establish regulations and guidelines for the management, administration, disbursement, and recoupment of students’ loans under this Act, and all stakeholders including parents, students’ applicants, beneficiaries of the students’ loans and deposit banks shall comply with the regulations and guidelines,” Section 5 (5) states.”
Who can apply for a student loan in Nigeria?
As per the Act, eligibility for the loan is limited to students attending government-owned tertiary institutions once the program is implemented.
“Subject to the provisions of any other enactment, all students seeking higher education in any public institution of higher learning in Nigeria shall have an equal right to access the loans under this Act without any discrimination arising from gender, religion, tribe, position or disability of any kind,” Section 2 states.
According to Section 23 of the Act, “institutions of higher learning” include public universities, polytechnics, colleges of education, and vocational schools established by the government.
To be eligible for the Tinubu Student Loan, an applicant’s income or family income must be less than N500,000 per annum.
Additionally, students must provide at least two guarantors who meet the following criteria:
- A civil servant of at least level 12.
- A lawyer with at least 10 years of post-call experience.
- A judicial officer.
- A justice of the peace.
Furthermore, as stated in Section 15 of the Act, a student will be disqualified from obtaining the loan if they have been found guilty of examination malpractice by any school authority, or if they have been convicted of a felony or any offense involving dishonesty or fraud.
What is the Repayment Period or Plan?
Loan repayment begins exactly two years after finishing the National Youth Service Corps (NYSC) program.
Beneficiaries must remit 10% of their monthly income to the Fund at the end of each month. As part of the repayment plan, self-employed persons must pay 10% of their total monthly profit.
Failure to repay a loan may result in an N500,000 fine, a two-year prison sentence, or both, according to the Act.
How can I apply for a Student Loan in Nigeria?
Here are the steps on How to Apply For Student Loan in Nigerian, candidates must follow:
- Submit their applications to the chairperson of the CBN-governor-headed committee through their respective banks.
- Include a cover letter signed by the head of their institution (e.g., vice-chancellors for university students, rectors for polytechnic students, and provosts for students of colleges of education).
- Provide a copy of their admission letter.
- Submit at least two guarantor letters addressed to the chairperson of the committee.
- Include two passport photographs from each of the guarantors.
- Provide evidence of employment and employer details.
- For self-employed guarantors, include their business registration with the Corporate Affairs Commission (CAC) or any other appropriate authority, as well as their banking information.
“The Committee shall communicate to the applicant on the status of his application within 14 days of the receipt of any application,” the act states, adding that “disbursement shall be on the availability of funds.”
What banks offer Student Loans in Nigeria?
1. Access Bank Student Loan
The Access Bank student loan is a tuition advance designed to assist students with short-term finance to cover tuition fees.
- Ensure careful that nothing interferes with the educational process.
- You can receive up to $5 million.
- There is the option of refinancing the debt.
- Finally, there are remittance services available.
- A filled-out application form
- Your acceptance letter
- Advice about education
- A letter of domiciliation of your pay account or your parent’s/sponsor’s salary account
- A copy of your place of employment ID or a legitimate form of identification belonging to you or your parent/sponsor
- BVN (Bank Verification Number)
- Credit checks
2. GT Bank Student Loan
Guarantee Trust Bank, GT Bank’s school fees advance is a lending program designed to help you pay your child’s or ward’s school fees for schools in Nigeria exclusively.
- Per request, you can get up to $5 million in student loans with a maximum term of 4 months.
- Interest rates are competitive
- Quick access to the loan
- Application form and employer undertaking form completed
- School fees bill and credit insurance
- Finally, ensure certain that the staff terminal benefit is domiciled in GTBank or secure a Corporate Guarantee.
3. First Bank FirstEdu Loan
First Bank’s FirstEdu loan is aimed at business owners. It provides flexible assistance for renovating school infrastructure and filling budget shortfalls while school fees are collected.
- It has a flexible repayment plan spread over 90 days.
- Access to a maximum amount of $10 million.
- The only collateral required is the domiciliation of school payments with First Bank.
- The school must have had an account with FirstBank for at least 6 months, or 12 months with other banks.
- Private schools that are duly accredited by CAC and their respective state governments are the target markets.
- Finally, the school must have at least 100 students.
4. Federal Government Education Loan
To provide students with easy access to finances, the Nigerian government approved the development of education banks and student loan boards by states at concessionary interest rates.
The administration also approved the establishment of education funds by all federation states. A special emphasis is placed on teacher development and secondary education, as well as the establishment of a special intervention fund for people with exceptional needs.
With so many alternatives for getting quick loans in Nigeria, funding education should not be a difficult challenge. Individuals studying in government tertiary schools in Nigeria can also apply for student loans as long as they meet the requirements.