President Bola Tinubu signed into law the Access to Higher Education Act, 2023, which is commonly referred to as the students loan Act.
This legislative move aims to provide interest-free education loans for Nigerians who are interested in pursuing tertiary education.
The central focus of this Act is the establishment of the Nigerian Education Loan Fund, a dedicated initiative that is designed to assist Nigerians in funding their higher education endeavors.
The repayment structure for these loans involves paying in installments, a process that begins two years after the individual has successfully completed their participation in the National Youth Service Corps (NYSC) program.
The inception of this bill dates back to its initial introduction in 2016 by Femi Gbajabiamila, who at the time was the Speaker of the House of Representatives. While the bill was reintroduced in 2019, it garnered more extensive attention from the National Assembly in November 2022. Interestingly, this heightened consideration occurred shortly after the conclusion of an eight-month-long industrial action staged by the nation’s university workers’ union. The union had been advocating for improved working conditions among other demands.
Several key details are integral to understanding the Access to Higher Education Act, 2023:
Education Loan Fund: The pivotal aspect of this Act is the establishment of the Nigerian Education Loan Fund, which assumes the responsibility of handling various tasks such as processing loan requests, disbursing funds, and facilitating the recovery of loans extended to students.
Sources of Funding: The Act outlines diverse sources that contribute to funding the Education Loan Fund. These sources include one percent of all profits derived by the federal government from oil and other minerals, as well as one percent of taxes, levies, and duties accruing to the federal government from entities such as the Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIS), and Nigerian Customs Service (NCS). The Act also mentions education bonds and education endowment fund schemes as additional sources of funding. Furthermore, the fund can be augmented through donations, gifts, grants, endowments, and revenue from any other viable source.
Management and Administration: The management of the fund is entrusted to an 11-person special committee. This committee is led by the governor of the Central Bank of Nigeria (CBN), who serves as the chairperson. Other members include representatives from various sectors such as education, finance, and labor unions. The committee’s responsibilities encompass developing regulations and guidelines for loan management, administration, disbursement, and recoupment.
Eligibility Criteria: The Act outlines specific eligibility criteria for loan applicants. Only students who are enrolled in government-owned tertiary institutions are eligible to apply for these education loans. The Act emphasizes the importance of equal access without discrimination based on factors such as gender, religion, tribe, position, or disability. Furthermore, eligible applicants must demonstrate an annual income or family income that does not exceed N500,000. To secure a loan, students must provide at least two guarantors who meet specific qualifications.
Repayment Structure: Repayment of the loan commences precisely two years after an individual has successfully completed their participation in the NYSC program. Beneficiaries of the loan are required to remit 10 percent of their income or total monthly profit to the fund at the end of each month. Self-employed individuals are also subject to this repayment requirement, with 10 percent of their total monthly profit earmarked for loan repayment.
Defaulting on loan repayment carries consequences, including a potential fine of N500,000, a two-year jail term, or both.
Application Process: The Act provides a comprehensive overview of the application process for education loans.
Interested candidates are required to submit their applications through their respective banks.
The application package includes several essential documents, such as a cover letter signed by the head of the applicant’s institution, copies of admission letters, guarantor letters, passport photographs, and evidence of employment.
The Act also outlines the timeline within which the committee communicates the applicant’s status and the subsequent disbursement process.
