Student loan: How to apply and secure the loan

As part of his commitment to advancing the education sector and empowering the youth, Bola Tinubu has pledged to provide student loans.

Nigeria’s President Bola Tinubu has taken a significant step towards improving access to higher education by signing the Students Loan Bill into law, marking a new phase in the country’s educational funding.

The Students Loan Bill paves the way for affordable education and provides a straightforward application and documentation process.

How to Apply for a Student Loan

Students who wish to apply for the loan must follow certain steps to begin their applications.

These steps involve submitting their applications through their respective banks and a complete set of necessary documents.

Eligibility Criteria

To be eligible for a loan under the Students Loan Bill, potential students must meet the requirements specified in Section 17 of the Act.

These requirements include:

(a) Admission to Accredited Institutions: Applicants must have gained admission to Nigerian universities, polytechnics, colleges of education, or vocational schools established by the Federal Government or any state government.

(b) Income Limit: The annual income of the applicant or their family must be at most N500,000.

(c) Guarantors: Each applicant is required to provide at least two guarantors.

The guarantors must belong to one of the following categories: (i) Civil servants of at least level 12 in the service, (ii) Lawyers with a minimum of 10 years of post-call experience, (iii) Judicial officers, or (iv) Justices of the peace.

Also read: Get Instant Loan From ₦20,000 to ₦6,000,000 Naira

Ineligibility for Loan Access

The Students Loan Bill stipulates certain conditions that render students ineligible for the loan.

These conditions include:

(a) Previous Loan Default: Students who have defaulted on any previous loan granted by any organization are not eligible for the loan.

(b) Exam Malpractice: Students found guilty of exam malpractice by any school authority are not eligible for the loan.

(c) Conviction of Felony or Offenses of Dishonesty or Fraud: Students convicted of a felony or any offence involving dishonesty or fraud are not eligible for the loan.

(d) Drug Offenses: Students convicted of drug offences are not eligible for the loan.

(e) Parental Loan Default: If a student’s parents have defaulted on a student loan or any other loan granted to them, the student is not eligible for the loan.

These eligibility criteria ensure the loan is granted to students who meet the necessary ethical standards and are dedicated to their academic pursuits.

Application Process and Documentation of Student Loan

The Students Loan Bill details the application procedure for students seeking a loan.

The application process includes the following steps:

1. Submission through the Applicant’s Bank: All applications must be submitted through the applicant’s bank to the Chairman of the Committee established under the Act.

A cover letter signed by the vice-chancellor, rector, or the head of the institution, along with the student affairs officer of the institution, should accompany the application.

2. Required Documents: Each application must be accompanied by several documents, including a copy of the student’s admission letter.

  • Additionally, a letter from the guarantors addressed to the Chairman of the Committee, recommending the student for the loan and accepting liability in the event of default, is required.
  • The application should include two passport photographs from each guarantor, information on the guarantors’ employment and proof of employment with the named organization, and particulars of the guarantors’ business registration or relevant authority if self-employed.
  • Application Status Communication: The Committee is obligated to communicate the status of the applicant’s application within 14 days of receiving the application.

Disbursement of Student Loan

The Students Loan Bill outlines the process for loan disbursement:

1. Timely Processing: Processing of any applicant’s application and disbursement shall be completed within 30 days of the application reaching the Chairman of the Committee, subject to Section 18 (4) of the Act.

This ensures that loans are processed efficiently and promptly.

Repayment of Student Loan

The repayment terms for beneficiaries of the loan are outlined in the Students Loan Bill:

1. Commencement of Repayment: Loan repayment shall commence two years after the National Youth Service Corps program is completed.

2. Salary Deduction: Repayment shall be facilitated through a direct deduction of 10% of the beneficiary’s salary at source by the employer. The deducted amount will be credited to the Fund.

Also read: Tinubu’s “Student Loans” aims to build Youth capacity

3. Notification of Job Changes: In the event of a job change, beneficiaries must notify the Chairman of the Committee within 30 days of resuming employment with the new employer, providing details of the new job.

4. Self-Employed Individuals: Self-employed beneficiaries must remit 10% of their total monthly profit to the Fund.

5. Reporting of Self-Employment Status: Self-employed individuals assuming this status must submit relevant information, such as business name, address, location, registration documents (if applicable), bank details, partner names, and director/shareholder names, to the Committee within 60 days.

6. Penalties for Default: Any individual who defaults on the provisions of subsection (5) or aids in such default commits an offence and, upon conviction, is liable to a fine of N500,000 or imprisonment for two years, or both.

This emphasizes the importance of adhering to the repayment obligations outlined in the Act and discourages default or aiding default.

The loan repayment terms and penalties aim to ensure timely and responsible repayment, contributing to the sustainability of the loan program and the availability of funds for future students.

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