On the 12th of June, 2023, the Students Loans (Access to Higher Education) Act, 2023 was passed into law with the assent of the President, Bola Ahmed Tinubu. The Act aims to create a legal framework for the grant of loans to indigent or low-income Nigerians in order to facilitate the payment of their tuition fees.1 This ensures that indigent Nigerians have easy access to higher education as they would be able to take advantage of interest-free loans from the Nigerian Education Loan Fund established under the Act.
All students seeking higher education in any public higher education institution in Nigeria shall have an equal right to access the loans under this Act without any discrimination on the basis of gender, religion, tribe, position, or disability of any kind.2 Highlighted below are some salient provisions of the Act:
THE NIGERIAN EDUCATION LOAN FUND
The Act establishes the Nigerian Education Loan Fund which shall be domiciled with, managed, and administered by the Central Bank of Nigeria through the money deposit banks in Nigeria.3 The Governor of the Central Bank of Nigeria is empowered to set up a Special Committee to perform the functions of the fund and establish regulations and guidelines for the management, administration, disbursement, and recoupment of student loans under the Act4.
The Special Committee for the Fund shall be chaired by the Governor of the Central Bank of Nigeria who shall appoint the Secretary of the Fund.5 Other members of the Committee shall include the Minister for Education, Minister for Finance, Chairman of the National Universities Commission, Auditor-General for the Federation, representatives of Vice-Chancellors forum of all Nigerian Universities, Rectors forums of all Nigerian Polytechnics, Provost's forum of all Colleges of Education in Nigeria, the Nigerian Labour Congress, Nigerian Bar Association and Academic Staff Union of Universities.6
Members of the Committee shall hold office for the term for which they have their substantive offices and shall be automatically replaced by their successors.7 A member ceases to hold office as such if he dies, becomes bankrupt, is convicted of a felony or any offense involving dishonesty or fraud, becomes of unsound mind, resigns, or is guilty of serious misconduct in relation to his duties.8
It is important to note that despite the wide functions and powers of the Committee under the Act, the President of the Federation is empowered to alter the decision of the Committee or give such directives to the Committee as he deems fit if he is satisfied that it is in the interest of the Committee or the public.9
SOURCES OF THE NIGERIAN EDUCATION LOAN FUND
The Fund shall be funded by multiple streams under the Act.10 They include:
- Education bonds
- Education endowment fund schemes
- 1% of all taxes, levies, and duties accruing to the Government of the Federation from the Federal Inland Revenue Service (FIRS), Nigerian Immigration Service, and Nigerian Custom Services.
- 1% of all profits accruing to the Government of the Federation arising from oil and other minerals.
- All sums accruing to the Fund by way of donations, gifts, grants, endowments or otherwise
- Other revenue accruing to the Fund from any other source.
APPLICATION REQUIREMENTS AND PROCESS
To be eligible to apply for the student loan, the applicant must have secured admission into any of the Nigerian Universities, polytechnics, colleges of education, or any vocational school established by the state or federal government. The applicant's income or family income must be less than N500,000 per annum to qualify. In addition, he/she must provide at least two guarantors each of whom shall be a civil servant of at least level 12 in the service, a lawyer with at least 10 years post-call experience, and a judicial officer or justice of the peace.11
The following persons are disqualified from accessing the loan12:
- A student has proven to have defaulted in respect of any previous loan granted by any organization
- A student found guilty of exam malpractice by any school authority
- A student convicted of a felony or any offense involving dishonesty or fraud
- A student convicted of drug offenses
- A student whose parents have defaulted in respect of a student loan granted to the student.
Eligible applicants can submit their applications through their bank to the Chairman of the Committee accompanied by a cover letter signed by the head of the institution and the student affairs officer of the institution. The application shall be accompanied by the following documents:
- Copy of the student's admission letter
- A letter by the guarantors addressed to the Chairman of the Committee
- Two Passport photographs from each of the guarantors, name of employer, and evidence of employment
- Particulars of the guarantor's business registration with the Corporate Affairs Commission or any other appropriate authority and his bankers where the guarantor is self-employed.13
The processing of an applicant's application and subsequent disbursement shall be done within 30 days of receipt of the application by the Chairman of the Committee.14 Disbursement shall however be subject to availability of funds.
Beneficiaries of the Student Loan under the Act shall commence repayment two years after completion of the National Youth Service Corps (NYSC) program. This shall be done by directly deducting 10% of the beneficiaries' salary at the source by the employer and credited to the fund. Where the beneficiary is self-employed, he shall remit 10% of his total profit monthly to the fund.15
It should be noted that any self-employed person who fails to send information such as the name of business, address, registration documents, name of bankers, name of partners, name of directors and shareholders to the Committee within 60 days of assuming that status commits an offense and is liable on conviction to a fine of N500,000 or imprisonment for a term of two years or both.16
The Student Loan Act seeks to ensure that indigent Nigerian students have access to interest-free loans in order to facilitate the payment of tuition fees which is highly commendable. However, the eligibility requirement is a bit stringent and should be relaxed to allow more people to take advantage of the Nigerian Education Loan Fund under the Act.
1. Section 3 of the Students Loans (Access to Higher Education) Act 2023
2. Section 2 of the Students Loans (Access to Higher Education) Act 2023
3. Section 5(2) of the Students Loans (Access to Higher Education) Act 2023
4. Section 5(5) of the Students Loans (Access to Higher Education) Act 2023
5. Section 5(4) of the Students Loans (Access to Higher Education) Act 2023
6. Section 7(2) of the Students Loans (Access to Higher Education) Act 2023
7. Section 8 of the Students Loans (Access to Higher Education) Act 2023
8. Section 9 of the Students Loans (Access to Higher Education) Act 2023
9. Section 10 of the Students Loans (Access to Higher Education) Act 2023
10. Section 12 of the Students Loans (Access to Higher Education) Act 2023
11. Section 14 of the Students Loans (Access to Higher Education) Act 2023
12. Section 15 of the Students Loans (Access to Higher Education) Act 2023
13. Section 16 of the Students Loans (Access to Higher Education) Act 2023
14. Section 17 of the Students Loans (Access to Higher Education) Act 2023
15. Section 18 of the Students Loans (Access to Higher Education) Act 2023
16. Supra note 15
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