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How to Apply for Student Loans in Nigeria Step by Step 

The Law on University Student Loans was recently passed by Bola Tinubu and promotes further education

The student loan bill simplifies the application and documentation process.

How to apply for student loans

Prospective students seeking access to loans must follow certain steps to begin applying.

These steps include applying to the relevant bank, accompanied by a set of required documents.

Appropriateness

To apply for a loan under the Student Loans Act, prospective students must meet the requirements set out in Section 17 of the Act.

These terms are as follows:

(a) Admission to an Accredited Institution: Applicants must obtain admission to a Nigerian university, college, teacher training college or vocational school established by the federal or state government.

(b) Income limit: Applicant’s individual or family income must not exceed N500,000 per year.

(c) Guarantor: Each applicant must provide at least two guarantors. The guarantor must fall into one of the following categories: (i) a civil servant of at least class 12, (ii) a lawyer with at least 10 years post-appointment experience, (iii) a judicial officer, or (iv) a judge of the peace.

Not Eligible to Access Loans 

Under the Student Loans Act, students are prohibited from accessing loans under certain circumstances. These disqualifying factors include:

(a) Default on Prior Loans: If a student is found to be defaulted on prior loans from an organization, access to those loans will be denied.

(b) Examination Error: If the student is found guilty of exam failure by the school board, he will be disqualified from receiving loans.

(c) Convicted of a crime related to dishonesty or fraud: No loan eligibility..

(d) Drug Offenses: Students convicted of drug offenses are prohibited from accessing loans.

If either parent defaults on a loan, the student will be ineligible for the loan..

These exclusion criteria ensure that loans are awarded to students who meet the required ethical standards and are truly committed to their academic goals.

Application Process And Documentation 

The Student Loan Bill explains the procedure for applying for prospective students who wish to apply for a loan. The application process includes the following steps:

• Submit applications through the applicant's bank.
• The application must be accompanied by a letter of motivation signed by the chancellor, chancellor, or head of the institution, together with the institution’s review officer.
• Required Documents: Each application must be accompanied by several documents, including a copy of the student acceptance letter.
• In addition, a letter is required from the guarantor to the chair of the committee, which recommends the student for a loan and assumes responsibility in case of default.
• Include two passport photos, employment information, and proof of employment for each sponsor.
• Notification of application status: The Commission shall notify the applicant of the status of the application within 14 days of receipt of the application.

Payment 

The student loan invoice governs the loan repayment process:

Timely Processing: Processing of all applicant applications and disbursements must be completed within 30 days of receipt of the application by the Chair of the Commission, subject to Section 18(4) of the Act.

This ensures efficient and fast loan processing.

Repayment 

Payment terms for borrowers are listed in the student loan statement:

Repayment starts two years after NYSC..

Deductions from wages: Payments are facilitated by direct deductions from the employer of 10% of the recipient’s salary at the source. The amount held will be credited to the fund.

If employment changes, the beneficiary must inform the Committee Chair within 30 days..

Self-Employed: Self-employed individuals are required to transfer 10% of their total monthly profit to the fund.

Reporting of Self-Employed Status: Self-employed persons receiving this status are required to provide relevant information to the Committee such as company name, address, location, registration documents (if applicable), bank details, partner names and director/shareholder names within 60 days.

Penalty for Negligence: Any person who fails to comply with subsection (5), or assists in such negligence, commits a criminal offense and, if found guilty, shall be subject to a fine of N500,000 or imprisonment which may be extended to two years or both extended year.

This underscores the importance of complying with legal payment obligations and preventing or encouraging default.

Loan repayment terms and penalties are designed to ensure timely and responsible repayment, thereby contributing to the sustainability of the loan program and the availability of funds for prospective students.