Nigeria’s President Bola Tinubu recently signed the Students Loan Bill into law, marking a huge advancement in expanding access to higher education and the beginning of a revolutionary period for the nation’s funding of education.
Along with providing access to reasonably priced education, the Students Loan Bill also lays out a simple and expedient application and paperwork procedure.
Further information about the bill is available in our explainer post, which you can read here.
How to Submit a Students Loan Application
To begin their applications, prospective students who want to use the loan must take certain actions.
These procedures entail submission via the relevant banks together with a full set of necessary documentation.
Qualifications
The requirements listed in Section 17 of the Act must be met by prospective students in order to apply for a loan under the Students Loan Bill.
These prerequisites are listed below:
(a) Admission to Accredited Institutions: Candidates must have been accepted into any state- or federally-established universities, polytechnics, colleges of education, or vocational schools in Nigeria.
(b) Income Limit: The applicant’s annual income, whether as a person or a family, cannot be more than N500,000.
(c) Guarantors: At least two guarantors must be provided by each applicant. The guarantors must be members of one of the following groups: judges of the peace, lawyers with at least ten years of post-call experience, civil servants with at least level 12 in the service, or judicial officers.
Unable to Apply for a Loan
Certain situations preclude students from being eligible for loans under the terms of the Students Loan Bill. Among these disqualifying elements are:
(a) Prior Loan Default: Students are ineligible for a loan if it can be demonstrated that they have previously defaulted on any loan issued by any institution.
(b) Exam Malpractice: A student will not be eligible for the loan if they are discovered to have committed exam malpractice by any school official.
(c) Conviction of Felony or Offences of Dishonesty or Fraud: Students are not eligible for the loan if they have been found guilty of a felony or any offence involving dishonesty or fraud.
(d) Drug Offences: Students are not eligible for the loan if they have been found guilty of drug offences.
(e) Parental Loan Default: The student will not be eligible to receive the loan if any of their parents have defaulted on a student loan or any other loan that has been awarded to them.
These exclusion requirements make sure that the loan is given to students who truly want to succeed academically and who adhere to the required ethical standards.
Procedure for Applications and Documentation
The Students Loan Bill describes how potential students who want to apply for the loan should do so. The following steps are included in the application process:
Submission via the Applicant’s Bank: The Chairman of the Committee constituted according to the Act shall receive all applications through the Applicant’s Bank.
The application should be sent with a cover letter that is signed by the student affairs officer of the school as well as the vice-chancellor, rector, or head of the institution.
Required Documents: A copy of the student’s admission letter is one of the many documents that must be included with every application.
- In addition, the guarantors must write a statement to the committee chairman endorsing the student for the loan and agreeing to take responsibility for any default.
- Two passport photos of each guarantor, details about their employment and proof of employment with the designated organisation, and information about their business registration or applicable authorities, if they are self-employed, should also be included in the application.
Communication of Application Status: Within 14 days of receiving the application, the Committee is required to notify the applicant of the status of their application.
Payment
The procedure for loan disbursement is outlined in the Students Loan Bill:
Timely Processing: By Section 18(4) of the Act, any applicant’s application must be processed and funds disbursed within 30 days of the application reaching the Chairman of the Committee.
This guarantees quick and effective loan processing.
Payback
The Students Loan Bill specifies the terms of repayment for loan recipients.
Payback Commencement: Two years following the National Youth Service Corps program’s conclusion, loan payback will begin.
Salary Deduction: The employer will facilitate repayment by deducting 10% of the beneficiary’s pay directly from their source of income. The Fund will be credited with the amount deducted.
Notification of Job Changes: If beneficiaries take a new job, they must inform the Committee Chairman of the change within 30 days of starting work for the new employer. They must also include information on the new position.
Self-Employed Individuals: Beneficiaries who work for themselves must send 10% of their whole monthly earnings to the Fund.
Reporting of Self-Employment Status: Within 60 days of obtaining this status, self-employed people are required to provide the Committee with all pertinent information, including the name of their business, address, and location; registration documents, if any; bank account information; and the names of their partners and directors or shareholders.
Penalties for Default: Any person who violates subsection (5) or assists in another person’s default is guilty of an offence and faces up to a two-year prison sentence, a fine of N500,000, or both.
This deters default or the encouragement of default and highlights how important it is to follow the Act’s repayment requirements.
To maintain the viability of the loan programme and the availability of money for future students, the terms and penalties for loan repayment are designed to ensure prompt and responsible payback.
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