On June 12, 2023, President Bola Tinubu of Nigeria signed the student loan bill into law, coinciding with Democracy Day. The bill was sponsored by Femi Gbajabiamila, the immediate-past Speaker of the House of Representatives. The legislation aims to provide financial assistance to Nigerian students in tertiary institutions, which was one of the key points in Tinubu’s manifesto during his presidential campaign.
The student loan law allows students who have secured admission into any public Nigerian university, polytechnic, college of education, or technical and vocational education and training (TVET) school to apply for interest-free loans from the Nigerian Education Loan Fund. To be eligible for the loan, the student’s income or family’s income must be less than N500,000 per annum. The applicant must also provide at least two civil servants of a certain rank or other professionals as guarantors.
The law establishes the Nigerian Education Loan Fund, which will be responsible for administering, supervising, coordinating, and monitoring the management of student loans in the country. The fund will be domiciled with and managed by the Central Bank of Nigeria (CBN) through the money deposit banks. The CBN governor will set up a special committee to perform the functions of the fund, with the governor himself serving as the committee’s chairman.
Academic records of students will be monitored, and applications for loans must be submitted through the student affairs office of each institution, accompanied by a cover letter signed by the institution’s head. Students who have defaulted on previous loans or have been found guilty of exam malpractice, felony, or drug offenses will not be eligible for the loan.
Repayment of the loan will begin two years after completion of the National Youth Service Corps (NYSC) program, and the employers of successful applicants will deduct 10% of their salaries to repay the loan. Self-employed individuals will remit 10% of their monthly profit to the student’s loan account. The law also stipulates that the education bank will be funded by 1% tax levies from the Federal Inland Revenue Service (FIRS), the National Immigration Service (NIS), and 1% from oil profits. Defaults on loan repayment will be punishable by law.