28 Jun Key Provisions of The Student Loan Act
President Bola Tinubu, on June 12, assented to the Students Loan Bill which was passed by the National Assembly in May 2023. The bill which was sponsored by the immediate past Speaker of the House of Representatives and Tinubu’s new Chief of Staff, Femi Gbajabiamila, had been passed by the 9th National Assembly in May.
The new law continues to generate mixed reactions from Nigerians. While many applauded it as possibly a panacea to the comatose state of the Nigerian education system, and a means to improve enrolment in tertiary institutions; others condemn it as a mere prelude to commercialising education in public institutions.
The Act aims to grant all students seeking higher education in any public institution of higher learning in Nigeria “equal right to access the loans under this Act without any discrimination arising from gender, religion, tribe, position or disability of any kind.
Orodata highlights some of the provisions of the Act:
In demystifying the Act, its major provision is the Nigerian Education Loan Fund, which is empowered to administer, supervise, coordinate, and monitor the management of student loans in the country. The body is expected to receive applications for student loans through higher institutions on behalf of the applicants and screen them. “The fund shall be domiciled with, managed and administered by the Central Bank of Nigeria (CBN) through the money deposit banks in Nigeria for the purpose set out under section 6 of this act,” the act reads.
The Fund, headed by a Chairman, to whom applications are addressed, approves and disburses loans to qualified applicants. It is also expected to “control and monitor and coordinate the student loans account or Fund domicile with the Central Bank of Nigeria and ensure compliance in respect of disbursement.”
The Fund shall also monitor academic records of grantees of the loans to obtain information on their year of graduation, national service, employment and to ensure that grantees of the loans commence repayment of the loans as at when due;
And finally, it shall liaise with the employers of the grantees and conclude documentation with employers to ensure that the required sum to be deducted is deducted from the grantees’ salary and remitted to the Fund or account as directed by the Committee;
The Act also provides for a special committee for the Fund, and the committee shall consist of:
The Committee shall consist of —
(a) the Governor of the Central Bank of Nigeria as the Chairman;
(b) the Secretary of the Fund who shall be appointed by the Chairman;
(c) the Minister responsible for education;
(d) the Chairman, National Universities Commission;
(e) a representative of Vice-Chancellors forum of all Nigeria Universities;
(f) a representative of the Rectors forums of all Nigerian Polytechnics and Provosts
forum of all Colleges of Education in Nigeria;
(g) the Minister responsible for finance or his representative;
(h) the Auditor-General for the Federation;
(i) a representative of the Nigerian Labour Congress;
(j) a representative of the Nigerian Bar Association; and
(k) a representative of the Academic Staff Union of Universities.
Furthermore, students applying for loans must apply to the chairman of the education Fund through their respective institutions upon satisfying relevant conditions. Also, the applicant’s application and disbursements are made within 30 days of the application reaching the chairman of the committee.
The Act does not discriminate based on institutions, as students of any public Nigerian university, polytechnic, college of education, or any technical and vocational education and training (TVET) school can apply for the loan. However, it stipulates that the student’s individual or family’s income must be less than N500,000 per annum to be qualified for the loan.
The Act also explains the method of repayment, stating that employers of successful applicants shall deduct the loan from their salaries after they must have completed their National Youth Service Corps (NYSC) programme.
“Any beneficiary of the loan to which this act refers shall commence repayment two years after completion of the NYSC programme. Repayment shall be by direct deduction of 10 per cent of the beneficiaries salary at source by the employer.
“Where the beneficiary is self-employed, he shall remit 10 per cent of his total profit monthly to the student’s loan account to be prescribed by the bank,” the Act read.