How To Apply and Get FGN Student Loan- Nigeria President Bola Ahmed Tinubu Signs Student Loan Bill into Law
On Monday, June 12, 2023, Nigeria’s President Bola Ahmed Tinubu signed the Student Loan bill into law. This will provide students with access to loans for their higher education. You can now proceed to see How To Apply and Get FGN Student Loan
With the law now in effect, the next step is to establish the Nigeria Education Bank. The Education Bank will oversee the loan process under the supervision of the Central Bank of Nigeria.
While the exact implementation date remains unclear, there are several questions arising regarding how this system will work. Let’s address some of them.
Who Can Apply for the Nigerian Student loan?
- To qualify for the loan, you must have already secured admission to a state or federal government university, polytechnic, college of education, or vocational school.
- Your income or your family’s income must be less than N500,000.
- You need to provide guarantors who are civil servants with a minimum of 12 years of service. Alternatively, you can present a lawyer with at least 10 years of experience or any judicial officer or justice of peace (JP).
How To Apply for Federal Government of Nigeria, FGN Student Loans
According to the Act that established the loan system, you must apply to the Nigeria Education Bank through the institution you have gained admission to.
The application will go through the Student Affairs Division of each higher institution, and the school will compile a list of candidates to forward to the bank, along with a cover letter from the Vice-Chancellor.
These letters will be addressed to the chairman of the Education Bank, and within 30 days, the disbursement of funds will commence. However, the law also states that each institution must submit their list within 30 days after the close of admissions.
NO APPLICATION PORTAL IS OUT. YOU WILL APPLY VIA YOUR SCHOOL
Qualifications/Requirements/Eligibility for Student Loan
Applicants must meet the following criteria:
- Must be students seeking higher education in public institutions in the country.
- Students attending private higher education institutions are not included in this arrangement.
- The loan is available to all students regardless of their gender, religion, or tribe.
- Students with disabilities are also eligible for the loan.
- The loan is specifically for paying school fees and does not cover pocket money or project expenses.
How much can students borrow?
The exact amount that each successful student can borrow is currently not specified in the law signed by President Tinubu.
Is it true that failure to repay can lead to imprisonment?
According to the law, individuals who receive the loan will begin repayment two years after completing their National Youth Service Corps (NYSC) program.
Repayment will be through a direct deduction of 10% of your salary or, if you are self-employed, the government will collect 10% of your total profit each month.
Failure to repay the loan is considered an offense and may result in imprisonment for up to two years or a fine of N500,000, or both.
When Does the Student Loan Repayment Start?
Students who benefit from the program will begin repayment two years after graduating.
The Education Bank will work with your employer to ensure that the required amount is deducted from your salary. This amount will be deposited into the student loan fund account.
The repayment will be through a direct deduction of 10% of your salary or, if you are self-employed, the government will collect 10% of your total profit each month.
Who will administer the loans?
The new Act establishes the Nigerian Education Bank, which will have the power to supervise, coordinate, administer, and monitor student loans in Nigeria.
The bank’s responsibilities include approving and disbursing loans to eligible applicants and monitoring the academic progress of borrowers, including graduation, national service, and employment, to ensure timely loan repayment.
Where will the Education Bank get its funding?
According to the law, the Education Bank will obtain funding through the following means:
- 1% of all taxes and levies collected by the Federal Inland Revenue Service, Nigeria Customs, and Nigeria Immigration Service.
- Education Bonds
- Interest earned from normal bank deposits
- Education endowment fund schemes
- Donations, gifts, and government grants
- Other savings and interest from the bank’s investments.