Student Loans in Nigeria – Requirements, How to Apply, Repayment, FAQs

Student Loan in Nigeria – Requirements, How to Apply, Repayment, FAQs

Education is said to be the key to progress, and in Nigeria, it has become an integral part of every family’s aspirations, regardless of their background.

However, with the increasing cost of education in 2023 by the new president – Bola Ahmed Tinubu, pursuing higher studies can be a financial burden for many students.

To bridge this gap, the Nigerian government introduced the Access to Higher Education Act, 2023, which aims to provide interest-free student loans to deserving Nigerian students pursuing tertiary education.

So this area is basically written to guide you on everything you need to know about the student loan in Nigeria, the requirements, how to apply for a student loan in Nigeria, how to repay a student loan in Nigeria, and answers to some frequently asked questions related to the student loan in Nigeria.

Before proceeding to know the requirements of the student loan in Nigeria, this is something you need to know about the Nigeria student loan introduced by the federal government in 2023.

What exactly is a student loan in Nigeria? 

In simple terms, it is a specialized loan designed by the federal government to help students cover the costs of their education and related expenses.

Unlike conventional loans, student loans introduced by Bola Ahmed Tinubu come with no interest rates and more flexible repayment options, making it easier for students to manage their finances.

The Student Loan Act, also known as the Student Loan Bill, paves the way for the establishment of the Education Loan Fund, which is dedicated to supporting Nigerian students in their pursuit of higher education.

One of the most attractive features of this initiative is that students can start repaying the loan two years after completing the National Youth Service Corps (NYSC) program, providing them with time to settle into their careers.

Funding for the Education Loan Fund is sourced from various channels.

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 collected by the Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIS), and Nigerian Customs Service (NCS), are allocated to the fund.

Additionally, contributions through education bonds, education endowment fund schemes, and donations from generous individuals and organizations contribute to the pool of funds available for student loans.

To manage and oversee the Education Loan Fund, an 11-member special committee is established.

This committee, chaired by the CBN governor, includes representatives from key stakeholders, such as the Ministers of Education and Finance, the Auditor-General of the Federation, and representatives from educational institutions and labor organizations.

The committee is responsible for setting regulations and guidelines governing the disbursement, administration, and loan repayment process.

Requirements For Students Loan In Nigeria

If you really need to secure this student loan, it’s important for you to meet up with the required document or be eligible for the loan.

Note: This loan is meant for students and no one else. However, these are the primary requirements you would need to meet:

• Means of Identification either National identity card or International Passport, etc.
• Your proof of Admission from an accredited institution in Nigeria
• Transcripts or academic certificates – if required
• The proof of your parents income (e.g. parent’s or guardian’s income bank statements) is required
• Your guarantor (s) contact details and personal information is required and the guarantors must be civil servants with not less than 12 years in service.
• You or your parents yearly income must be less than N500,000
• You must be willing to provide recent passport-sized photographs
• Completed application form which is provided by the loan provider

Those are the requirements any student must provide before they can get a student loan in Nigeria.

How To Apply For Student Loan In Nigeria (2023)

On how to apply for a student loan in Nigeria, firstly, you must be sure you meet the Nigeria student loan requirements. Once you are sure, this is what to do:

According to the act, which established the student loan bill in Nigeria, students would need to apply to the Nigeria bank through the college, university, or polytechnic (institution) that offers them admission.

The student loan application will go through the student affairs Division of each school which will make a compilation of a list of candidates to forward to the bank alongside a cover letter from the vice Chancellor.

After that, the letter will be forwarded to the chairman of the education bank and probably within the period of 30 days, the loan disbursement will commence.

How To Repay Student Loan In Nigeria As A Beneficiary

Repayment of the student loan begins two years after completing the NYSC program.

As a beneficiary, you are required to remit 10 percent of your income or total monthly profit if you are self-employed.

Defaulting on loan repayment can lead to a N500,000 fine, a two-year jail term, or both, as specified by the Act.

If you are employed, your employer must compulsorily deduct 10% of your salary at source and remit it to your loan fund.

If possible for you to change your job, it’s important to communicate it within the period of 30 days of resuming the new job.

FAQs On Student Loan in Nigeria – Requirements, How to Apply, Repayment, FAQs

Here are some frequently asked questions on Student Loan in Nigeria – Requirements, How to Apply, Repayment, FAQs with answers:

What is the Access to Higher Education Act, 2023?

The Access to Higher Education Act, 2023, is a significant bill enacted by President Bola Tinubu aimed at providing interest-free education loans to Nigerian students pursuing tertiary education.

The act establishes the Education Loan Fund, which assists Nigerian students in funding their higher education.

How does the Education Loan Fund get its funding?

The Education Loan Fund receives funding through various channels.

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 collected by the Federal Inland Revenue Service (FIRS), Nigeria Immigration Service (NIS), and Nigerian Customs Service (NCS), are allocated to the fund.

Additionally, contributions through education bonds, education endowment fund schemes, and donations from individuals and organizations further support the initiative.

Who manages and controls the Education Loan Fund?

The Education Loan Fund is held in the Central Bank of Nigeria (CBN) and overseen by an 11-member special committee.

The committee is chaired by the CBN governor and includes representatives from various key stakeholders, such as the Ministers of Education and Finance, the Auditor-General of the Federation, and representatives from educational institutions and labor organizations.

Who is eligible to apply for a student loan in Nigeria?

As per the Student Loan Act, eligibility for the loan is limited to students attending government-owned tertiary institutions once the program is implemented.

To qualify, an applicant’s income or family income must be less than N500,000 per annum.

Also, applicants must provide at least two guarantors who meet specific criteria, such as civil servants of at least level 12 or lawyers with ten years of post-call experience.

What is the repayment period for student loans?

Repayment of the student loan begins two years after completing the National Youth Service Corps (NYSC) program. Beneficiaries are required to remit 10 percent of their income or total monthly profit if they are self-employed.

Defaulting on loan repayment can lead to a N500,000 fine, a two-year jail term, or both, as specified by the Student Loan Act.

How can students apply for a student loan in Nigeria?

To apply for a student loan, candidates must submit their applications to the CBN-governor-headed committee through their respective banks.

Along with the application, students must include a cover letter signed by the head of their institution, a copy of their admission letter, and at least two guarantor letters addressed to the committee’s chairperson.

Which banks offer student loans in Nigeria?

As said earlier in the article, various banks in Nigeria offer student loans, including Access Bank, GT Bank, and First Bank. Each bank has its unique features and requirements for student loan applicants.

How are student loans contributing to the future of education in Nigeria?

Student loans in Nigeria are empowering deserving students to pursue higher education without being hindered by financial constraints.

The Nigerian government’s efforts, combined with the support from the financial sector, are unlocking the doors to educational opportunities and a brighter future for the country.