The student loan passed into law by Presidents Bola Tinubu on June 12, 2023, for tertiary institutions is aimed at creating a legal framework for the grant of loans to indigent students or low-income Nigerians, specifically those from families earning less than N500,000 per year.

Since the passing of the scheme into law and assurance by the Minister of State for Education, Yusuf Sununu, of its take-off in January, the Federal Government earmarked N50 billion for it in the 2024 budget.  

The money is to be domiciled in the Central Bank of Nigeria, managed and administered by the apex bank through the money deposit banks in Nigeria.

The first to know about the student loan scheme is that it will only cover universities, polytechnics, colleges of education and vocational schools established by the federal and state governments.

The requirements needed for students to be eligible for the loan include that the student must come from a family with income less than N500,000 per annum, the student must be able to provide two civil servants with not less than 12 years in service or a lawyer with at least 10 years post-call experience, a judicial officer or a justice of peace as guarantors.

Also students with parents who have defaulted in respect of previous loans will not be considered and the student must also not have defaulted any previous loans or found guilty of exam malpractice, felony or drug offences.

According to the student loan law signed by the President in June,  all applications must be submitted through the applicant’s bank to the chairman of the committee established under the Act accompanied by a cover letter signed by the vice-chancellor , rector or the head of the institution and the student affairs officer of the institution.

Each application is expected to be accompanied by a number of listed documents to the student affairs office.

The documents include a completed application form, a copy of admission letter, a copy of UTME result slip, a copy of WAEC/NECO result certificate, a copy of birth certificate, a copy of passport photograph, a guarantor’s letter of support from each of the two guarantors, a copy of guarantors’ employment letter and a copy of the guarantor’s passport photographs.

The students who have submitted their application and the required documents will be communicated to on the status of their application by the committee within 14 days of the receipt of the application and the disbursement of the loan shall be on availability of funds.

Moreover, according to the act, any beneficiary of the loan is expected to commence repayment after two years of completing the one-year mandatory National Youth Service Corps scheme.

As a means of repayment, those who benefited from the loan would have 10 per cent deducted from their salary by the employer and credited to the fund. 

Meanwhile, where the beneficiary is self- employed, he or she is expected to submit information such as name of business, address, registration documents (if registered), name of bankers, name of partners, name of directors and shareholders of the committee as 10 per cent of his/her total profit shall be remitted every month.

Also, according to the Act, anyone who defaults the loan repayment provision is liable on conviction to a fine of N500,000 or a two-year jail term or both.