The Higher Education/Student Loan Act was passed into law upon being assented to by President Bola Tinubu in June 2023 with the aim of creating a legal framework governing the grant of loans to indigent or low-income Nigerians for the purpose of facilitating otherwise financially out-of-reach tertiary education tuition fee payments.
While fraught with many criticisms, this article will be focused on highlighting the major provisions of this act as well as :-
– Its application scope.
– Eligibility requirements for loans under this act.
– Its enforceability.
What is the application scope of the act?
The scope of this act is the application for and grant of loans to Nigerians seeking higher education into institutions of higher learning in Nigeria.
Which agency will be in charge of giving effect to the provisions of the act?
The provisions of the act are to be enforceable through the Nigerian Education Bank which is itself a creation of the act.
What is the Operations structure of the Nigerian Education Bank?
-The Nigerian Education Bank is to be a body corporate with perpetual succession and a common seal & shall have powers to sue and be sued in its corporate name.
-Its head office is to be located in the Federal Capital Territory and the bank may also establish branch offices in any state of the Federation.
– The bank can also(subject to the Land Use Act), acquire, hold or dispose of properties, moveable or immoveable fot the purpose of its function.
What exactly are the statutory functions of the Education bank?
The functions of the bank shall be to:-
– Implement the provisions of the act.
– Supervise, coordinate, administer & monitor the management of student loans in Nigeria.
– Receive applications for student loans through higher institutions in Nigeria on behalf of the applicants, & screen the applications to ensure that all requirements for grant or student loans under the act are satisfied in compliance with the act.
– Approve and disbursement loans to qualified applicants.
– Control, monitor & coordinate the students loan account and to ensure compliance in respect of disbursement.
– Monitor academic records of grantees of the loan to obtain information on their year of graduation, national service, and employment to ensure grantees or the loan commence repayment of the loan as at when due.
Where will be the main source of the student loans to be disbursed by the Education bank?
Student loans will be advanced mainly from the student loans fund or ” The fund” as established by the act.
What will constitute the main sources of the Student loan fund?
The fund shall consist of :-
– All interests arising from deposits in the bank.
– Education endowment fund schemes.
– Education bonds.
– 1% of all profits accruing to the government of the Federation arising from oil and other minerals.
– 1% of all taxes, levies and duties accruing to the government of the Federation from the Federal Inland Revenue Service (FIRS), the Nigerian Immigration Service (NIS) & the Nigerian Customs Service.
– Interests & revenue accruing from savings and investments made by the Education bank.
– Other revenues accruing to the bank from any other source.
What are the objectives of the Education fund?
The fund has the main objectives of:-
– Facilitating the mobilization of funds to provide interest-free loans to students of institutions of higher learning in Nigeria for the payment of tuition fees.
– Ensuring the constant supply of loans to qualified student applicants for the purpose of providing education to all Nigerians.
What is the application procedure for a student loan under the act?
Applications for student loans must :-
– be made in writing by applicants through the student affairs offices of their various higher institutions which will then each send a list of qualified applicants accompanied by cover letters signed by either the Vice Chancellors or Rectors of the said higher institutions;
– be accompanied by a copy of the student’s admission letter, a letter from his guarantors addressed to the chairman of the governing board of the bank recommending the student and that they accept liability in the event of a default on loan repayment.
What are the eligibility requirements for a student loan under this act?
To be eligible for a loan under this act, an must :-
– Secure admission into any Nigerian higher institution established by the Federal Government or any state government (this automatically disqualifies students of private higher institutions).
– Have a personal or family annual income of less than 500 Thousand Naira.
– Provide at least 2 guarantors, each of whom must be at least a level 12-grade civil servant , a lawyer of 10 years post-call standing at the Nigerian Bar, a judicial officer, or a justice of the peace (?).
What are the factors that can disqualify an applicant from being granted a loan under this act?
An applicant can be disqualified from accessing a loan under this act for any of the following :-
- Defaulting in respect of any previous loan from any organization.
- Being found guilty of exam malpractice by any school authority.
- Being convicted of a felony or any offence involving dishonesty or fraud.
- Being convicted for drug offences.
- Any of the applicant’s parents beung discovered to be a defaulter I respect of loans previously granted to him or her.
When is repayment of a student loan deemed due under the act?
Student Loan repayments under this act are deemed commencable 2 years after the completion of a beneficiary’s national youth service term.
What are the penalties for breaching any provision of the act including loan repayment failure?
Breaching any provision of this act in any manner including but not limited to defaulting on a student loan repayment can earn offenders an imprisonment term of 2 years and/or a fine of 500 Thousand Naira.
