INTRODUCTION

On June 12, 2023, President Bola Ahmed Tinubu of Nigeria signed the Student Loan Bill into law. This legislation aims to increase educational access and delivery at the postsecondary level in Nigeria, and its primary focus is on the tertiary level. It is envisaged that the Student Loan Act will alleviate the previous funding limits experienced by the Federal Scholarship Board, and it aims to streamline the processes for receiving educational loans. The purpose of the Student Loan Act is to enable students who are financially unable to pay for their education to obtain loans to do so.

The purpose of the Student Loan Act is to reduce the cost of obtaining a higher education and expand the availability of student loans. As seen below, this article provides an overview of various significant facets of the loan program.

MAJOR HIGHLIGHTS  OF THE LOAN ACT

1. Eligibility Criteria: As provided in Section 18 of the Act, prospective students must have a yearly income that does not exceed N500,000 and must have been accepted to an authorized educational institution in Nigeria.

2. Guarantors: Each applicant is required to furnish two guarantors who are in compliance with a set of precise requirements. A public servant with at least 12 years of experience, a lawyer with at least 10 years of post-call experience, a judicial officer, or a Justice of the Peace are all examples of candidates for the role of guarantor.

3. Disqualification Factors: Section 19 of the Act provides for different grounds for disqualification. Access to the loan may not be granted to a student if the student or the student’s parents have ever been in arrears on any other debts. In addition, those who have been convicted of drug-related offenses, felonies involving dishonesty or fraud, or who have been found guilty of exam malpractice by any school authority may also be disqualified from the program.

4. Application Process: The application process requires prospective students to submit their application to the Chairman of the Nigerian Education Bank and the Student Affairs Office at their respective educational institutions. The submission of the application should be accompanied by the necessary supporting documentation, including the student’s admission letter, letter by Guarantors and their full details, name of the employers of these Guarantors, and evidence of being employed. Where the Guarantors are self-employed, particulars of the business as registered with the Corporate Affairs Commission have to be furnished

5. Loan Disbursement: Section 21 of the Act provides that once the application has been reviewed and authorized, the loan disbursement will be performed within the following 30 days.

6. Schedule for Repayment: Applicants are required to begin repaying the loan two years after the conclusion of their participation in the National Youth Service Corps (NYSC) program, as provided in Section 22 of the Act.

7. Methods of Repayment: The repayment of the loan can be made easier by salary deductions, in which the employer of the applicant takes 10% of the applicant’s salary and deducts it before it is paid to them. People who are self-employed have the additional obligation of making a repayment equal to ten percent of their total monthly profit.

8. Penalties for Defaulters: The failure to meet one’s duties regarding the repayment of a loan can result in the imposition of penalties such as monetary fines or even jail time. People who aid and abet loan defaulters are also liable to penalties as provided in Section 22(5) of the Act

9. Nigerian Education Bank: Section 5 of the Act establishes the Nigerian Education Bank, which shall be responsible for supervising, coordinating, administering, and monitoring the management of student loans in Nigeria. The Governing Board of the Bank would be led by a former Vice-Chancellor of any Nigerian university. Other members of the board will include representation from a wide variety of organizations and stakeholders in the education sector.

CONCLUSION

President Bola Ahmed Tinubu’s signing of the Student Loan Act into law constitutes a significant step toward increasing educational access and delivery at the tertiary level in Nigeria. This legislation fulfills President Tinubu’s campaign pledge and addresses the Federal Scholarship Board’s past budget limits by allowing impoverished students to obtain loans for their studies. While there have been questions voiced about the law’s enforceability, it should be viewed as a positive step in the right direction.

The Student Loan Act specifies detailed qualifying criteria and required documentation for the loan application process. It creates the Nigerian Education Bank, which will supervise, coordinate, administer, and monitor student loan management. The statute also promotes responsible repayment, with sanctions in place for defaulters to safeguard the loan program’s long-term viability.

Although there may be concerns about the law’s enforceability, it is crucial to acknowledge that this legislation represents a commitment to tackling the issue of educational affordability in Nigeria. While difficulties may develop during implementation, the act’s goal of improving educational access and expediting the loan application process is admirable.

Moving forward, stakeholders will need to work together to ensure that the Student Loan Act is effectively implemented. This may entail frequent evaluations and changes to resolve any detected flaws and ensure equal loan distribution to worthy students.

Overall, the Student Loan Act illustrates the government’s acknowledgment of the need for affordable higher education and its efforts to assist impoverished students financially. While more development and monitoring will be required, this law represents a promising step toward Nigeria’s objective of affordable and accessible postsecondary education.