SPOTLIGHT: Top 10 Things to Know About Tinubu’s Student Loan Policy
BY Kabir Akintayo
The Access to Higher Education Act, 2023, otherwise known as the Students Loan Act, was signed into law by President Bola Ahmed Tinubu on June 12th 2023.
The Act is to provide interest-free education loans for students willing to acquire tertiary education. But eight months since signing the bill into law, nothing has been done or heard from the government who promised to kick start the process immediately.
However, President Tinubu has assured that the students loan policy will soon be implemented, with a view to serving as a relief to students and parents in this economic hardship.
Here are 10 things to know about the students loan.
1. It provides for the establishment of the Nigerian Education Bank, a financial institution specifically designed to grant loans to indigent students and recover them at a zero-interest rate. The bank, according to the provisions of the bill, will source its funds from education bonds, education endowment funds, and steady one percent of national tax derivations from the Federal Inland Revenue Services (FIRS), the Nigerian Immigration Service and the Nigerian Customs Service (NCS) and also from the profit accruing from oil and minerals.
The Education Loan will also be funded through donations, gifts, grants, endowment and revenue accruing to the fund from any other source. Not limited to this, for the purpose of ensuring repayment of a loan, the bank will monitor the beneficiary’s progression into the labour market.
2. The fund is to be domiciled in the Central Bank of Nigeria (CBN) and managed by an 11-person special committee chaired by the CBN, governor and a secretary to be appointed by the chairperson. Members of the committee as dictated by the law includes; the ministers responsible for education and finance, or the latter’s representatives, and the Auditor-General of the Federation.
Other members are; the Chairman, National Universities Commission (NUC), a representative of the forum of University Vice-chancellors, a representative of the forum of Polytechnic Rectors and forum of provosts of all Colleges of Education in the country.
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Also, a representative of the Nigeria Labour Congress (NLC), a representative of the Nigerian Bar Association (NBA), and a representative of the Academic Staff Union of Universities (ASUU), are also members. This committee would decide the broad modalities including the process of application for the loan, who is qualified to get the loan and when they should pay back among other details.
3. Applicant income or family income shall be less than N500,000 per annum. Each applicant must provide two guarantors who must be a civil servant with at least 12 years experience, or a lawyer with at least 10 years post-call experience, or a Judicial Officer, or a Justice of Peace.
4. A student can be disqualified if they or their parents have defaulted any loan in the past, or they (student) have been convicted of drug related offences or any felony involving dishonesty or fraud, or they if they have been found guilty of exam malpractices by any school authority.
5. Processing and disbursement of the loan shall be made within 30 days of the application reaching the Bank.
6. The loan granted to students shall only be for the payment of Tuition and shall be interest-free.
7. Repayment of the Loan shall commence two years after the completion of the applicant’s NYSC programme.
8. 10% of the applicant’s salary shall be deducted at source by any employer for the repayment of the loan. And if they are self-employed, they will remit 10% of their total monthly profit as repayment of the loan.
9. Defaulters, or anyone aiding them shall be liable, upon conviction, to two years imprisonment, or a fine of N500,000 or both. “Defaulters” as used above, are those who try to cheat the system by providing falsified data in their repayment documents.
10. To apply for the education loan, candidates are required to submit applications to the chairperson of the CBN-governor-headed committee through their respective banks.
The application is to be accompanied by a cover letter signed by the head of their institutions (Vice-chancellors for University students, Rector for Polytechnic students and provost for students of Colleges of Education) and Students Affairs Officer of the institution. Students also submit a copy of their admission letter, at least two guarantor letters addressed to the chairperson of the committee, two passport photographs from each of the guarantors, their employer and evidence of employment.
In cases where the guarantor is self-employed, their business registration with the Corporate Affairs Commission (CAC) or any other appropriate authority and their bankers, will be required.
