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Nigeria’s Student Loan Law And Its Impact On Education

Nigeria’s Student Loan Bill continues to evoke reactions since it was signed into Law by President Bola Ahmed Tinubu on the 12th of June, 2023.

The bill aims to enhance access to higher education for Nigerian students and is to provide interest-free loans to students, in order to address financial constraints that would hinder educational pursuits.

Since then there have been conversations to what extent the bill would actually benefit the student’s. Amid reports of plans to remove education subsidy and a hike of tuition fees by some institutions of higher learning, the Bill has already been criticized as being a Greek Gift of some sorts and an attempt to hide Government’s true intentions of making Education even more expensive.

But you can make your own conclusions as we explore all the angles and aspects of the bill because…this law will have significant impact on Nigeria’s educational system and so understanding the details of this law is crucial.

Will this be of true benefit for students? Will is give more student the opportunity to have the opportunity to study in tertiary institutions? How sustainable is this idea in the context of the Nigerian state and the state of Education

With a view to enhance access to higher education, Nigeria’s President Bola Tinubu on June 12, 2023 signed the Students Loan Bill into law which he said was in fulfillment of a promise he made during his campaign.

The student loan bill, earlier sponsored by the Speaker of the 9th House of Representatives, Femi Gbajabiamila, provides for interest-free loans to indigent Nigerian students.

Presidential Spokesperson Dele Alake made the announcement on Monday, 12th June stating that law is to provide easy access to higher education for indigent Nigerians through interest-free loans from the Nigerian Education Loan Fund.

Alake added that the funds will be domiciled in the Ministry of Education and will only be accessed by indigent students of tertiary institutions.

ButHow much information do student have on the Student Loan Bill. What do they know and what do they think about this latest development?? Well, we visited some institutions of higher learning to find out what they know.

Deborah is a student of the Yaba Technical College of Education, Lagos. The Student Loan Bill could potentially affect the way she and her siblings access higher education. I asked her if she had even heard about this latest development and what she thought about it…..

According to the law, the loan is meant for students who need money to pay for school tuition fees for public students seeking higher education in any public institution.

All students looking to study further in any public higher institution of learning have equal right to access the loans under the Act without any discrimination arising from gender, religion, tribe, position or disability of any kind.

Potential beneficiaries must show evidence of being an indigent Nigerian and is coming from a family with an income of less than N500k per annum.


The law also establishes The Nigerian Education Loan Fund which has various functions which include the following:

  • To supervise and coordinate management of student loans in Nigeria, and receiving and screening loan applications from higher institutions to ensure compliance with the Act’s requirements.
  • Approve and disburse loans to eligible applicants, monitor the academic records of loan recipients, and ensures timely loan repayments.
  • The Fund shall be domiciled with, managed, and administered by the Central Bank of Nigeria through the money deposit banks in Nigeria.
  • The Fund is also responsible for issuing quarterly reports on loan performance to the President and establishing rules and guidelines, including application procedures.
  • Additionally, the Fund provides financial advice on educational matters, ensures adequate loan security, engages in other banking activities, and takes legal action to recover loans and enforce the provisions of the Act.
  • The Nigerian Education Loan Fund, as outlined in the Students Loan Bill, will derive its funding from various sources such as education bonds, which will be issued to generate funds specifically for educational purposes.

Additionally, the Fund will benefit from education endowment fund schemes, where contributions and investments will be made to support educational initiatives.

One percent of taxes, levies, and duties collected by the Government of the Federation from entities such as the Federal Inland Revenue Service (FIRS), Nigerian Immigration Service, and Nigerian Customs Service will be allocated.

In addition to donations, gifts, grants, endowments, and any other contributions made to the Fund, giving opportunity for individuals, organizations, and institutions to support the education sector.


Let’s talk a bit more on who is eligible to apply for Nigeria’s student loan?  Well we are told that Every Nigerian student seeking admission to an institution of higher learning, provided they meet certain criteria. These include the following:


Students applying for a Loan under this Act must apply to the chairman of the Bank through their respective institutions upon satisfaction of the following conditions

  • Students must have secured admission into any Public Nigerian University, Polytechnic, COE of 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; ofnot less than level 12 in Service or a Lawyer with at leasst 10 years post-call experience, a Judicial Officer or a Justice of Peace.
  • Students who have defaulted in previous loans, found guilty of exam malpractice, felony, drug offences will not be considered.
  • Students with parents who have defaulted in respect of previous loans will not be considered.
  • All applications 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 Students Affairs
  • 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% of the beneficiaries’ salary at source by the employer.
  • Where the beneficiary is self-employed, he shall remit 10% of his total profit monthly to the Students loan account to be prescribed by the bank.

But exactly does this Bill mean for Higher Education in Nigeria? IS Nigeria ready for this kind of credit Culture. Do the benefits outweigh the downsides of this Law? Will it improve access or further widen the gap between those who can and those who cannot access Higher education?

As much as people want to embrace any policy or legislation which would guarantee or ease access to Higher education, they also want to be certain this will not complicate things or take access out of their reach, farther than it already is!

How can the average Nigerian Student be assured of funds to get a higher education without pushing them further into debt?

For people like Deborah…she wishes to explore other means of sourcing funding for her education. She says it has not been easy but somehow she would make it through….

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