Interest-Free Educational Loans, Students To Start Payment 2 Years After NYSC

Indigenous Nigerian Students who accessed the newly passed into law, interest-free educational loans, will borrow the money while in higher institutions of learning and start repayment of the loans two years after the beneficiaries have completed the mandatory National Youth Service Corps, NYSC.

President, Bola Ahmed Tinubu, on Monday signed into law the Student Loan Bill. The bill, which will enable Nigerian students to have access to interest-free loans, was introduced by the outgoing speaker of the House of Representatives, Femi Gbajabiamila.

The bill passed into law passed second reading at the lower house on May 23, 2023.

According to the bill, as obtained and published by Punch Newspaper, students applying for loans under the Act must apply to the Chairman of the established Education Bank through their respective institutions upon satisfying the following conditions stated below:

i. Student must have secured admission into any public Nigerian University, Polytechnic, college of education or any TVET school. Applicant income or family income must be less than ₦500,000 per annum. Applicant must provide at least two civil servants as guarantors: of not less than level 12 years in service; or a Lawyer with at least 10 years post-call experience; a Judicial officer; or a Justice of Peace.

ii. Students who have defaulted on previous loans; found guilty of exam malpractice, felony, or drug offences will not be considered.

iii. Students with parents who have defaulted in respect of previous loans will not be considered.

“Following the satisfaction of the conditions listed above, applications for the loans will be submitted through the Students Affairs Office of each institution via a list of all qualified applicants from the institution accompanied by a cover letter signed by the Vice-Chancellor or Rector or the head of the institution and the Student Affairs.

“On the repayment, the act states that “Any beneficiary of the loan to which this Act refers shall commence repayment two years after completion of the National Youth Service Corps programme.

“Repayment shall be by direct deduction of 10 per cent of the beneficiary’s salary at source by the employer.

“Where the beneficiary is self-employed, he shall remit 10 per cent of his total profit monthly to the student loan account to be prescribed by the bank.

“For the purpose of sub-section 3 above, a self-employed person shall, within 60 days of assuming that status, submit all information such as the name of business, address and location, registration documents, registered, name of bankers, names of partners, name of directors and shareholders to the Commission.

“Anyone in default of the provisions of sub-section 4 above or found to be aiding the default of any of the provisions of this Act is guilty of an offence and, if convicted, shall be liable to imprisonment for two years or a fine of ₦500,000 or both”, the law stipulates as reported by Punch Newspaper.