12 important things to know about Nigeria’s student loan scheme
President Bola Ahmed Tinubu signed the student loans amendment bill into law at the State House on Wednesday, April 3.
The Act, also known as the Students Loan Law, also established the Nigerian Education Loan Fund, which is expected to handle all loan requests, grants, disbursement, and recovery.
Here are 12 things to know about the student loan scheme:
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1. Nigeria’s student loan is interest-free!
2. The sum is static with a range of repayment options that are tied to a borrower’s income.
3. The beneficiaries will get a two-year “grace period” after completing the one-year National Youth Service before they are expected to commence repayment of the loan.
4. The beneficiary begins repayment only when he or she has started earning income.
5. The baseline repayment amount is 10% of the monthly net pay of the beneficiary (in the case of an employee) or 10% of monthly income or profit of the beneficiary (in the case of a self-employed)
6. There is also an option of a one-off repayment or an opportunity to indicate the particular percentage model you want for those in private business.’
7. Beneficiaries who can not find employment within the grace period of two years will have to periodically report their employment status to the Student Loan board.
8. Beneficiaries of the student loan confirmed to be dead, terminally ill and incapable of earning a living through work will be granted waivers.
9. The sources of funding as dictated by the Act include; one percent of all profits accruing to the federal government from oil and other minerals; one percent of taxes, levies and duties accruing to the federal government from the Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIS) and Nigerian Customs Service (NCS); education bonds and education endowment fund schemes.
10. The fund is to be domiciled in the Central Bank of Nigeria (CBN) and managed by an 11-person special committee chaired by the CBN governor, the law stipulates in Section 5.
11. To apply for the education loan, candidates are required to submit applications to the chairperson of the CBN-governor-headed committee through their respective banks.
12. The application is to be accompanied by a cover letter signed by the head of their institutions (vice-chancellors for university students, rector for polytechnic students and provost for students of colleges of education) and student affairs officer of the institution.
