Student loan Act: How to apply and secure the loan.

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With a significant stride towards enhancing access to higher education, Nigeria’s President Bola Tinubu has recently signed the Students Loan Bill into law, ushering in a transformative era for educational funding in the country.

The Students Loan Bill not only opens doors to affordable education but also outlines a clear and streamlined application and documentation process.

You can read our explainer article which contains other details of the bill here.

How to apply for the Students Loan

Prospective students seeking access to the loan are required to follow specific steps to initiate their applications.

These steps include submission through their respective banks, accompanied by a comprehensive set of required documents.


To apply for a loan under the Students Loan Bill, prospective students must satisfy the conditions outlined in Section 17 of the Act.

These conditions are as follows:

(a) Admission into Accredited Institutions: Applicants must have secured admission into Nigerian universities, polytechnics, colleges of education, or vocational schools established by the Federal Government or any state government.

(b) Income Limit: The applicant’s individual or family income must not exceed N500,000 per annum.

(c) Guarantors: Each applicant must provide a minimum of two guarantors. The guarantors must fall into one of the following categories: (i) Civil servants of at least level 12 in the service, (ii) Lawyers with a minimum of 10 years of post-call experience, (iii) Judicial officers, or (iv) Justices of the peace.

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Ineligibility for Loan Access

Under the Students Loan Bill, certain circumstances disqualify students from accessing the loan. These disqualifying factors include:

(a) Previous Loan Default: If a student is proven to have defaulted on any previous loan granted by any organization, they are disqualified from accessing the loan.

(b) Exam Malpractice: If a student is found guilty of exam malpractice by any school authority, they will be disqualified from receiving the loan.

(c) Conviction of Felony or Offenses of Dishonesty or Fraud: Students who have been convicted of a felony or any offense involving dishonesty or fraud are ineligible for the loan.

(d) Drug Offenses: Students who have been convicted of drug offenses are disqualified from accessing the loan.

(e) Parental Loan Default: If any of the student’s parents have defaulted on a student loan or any other loan granted to them, the student will be disqualified from receiving the loan.

These disqualification criteria ensure that the loan is allocated to students who meet the necessary ethical standards and have a genuine commitment to their academic pursuits.

Application Process and Documentation

The Students Loan Bill outlines the method of application for prospective students seeking the loan. The application process involves the following steps:

Submission through the Applicant’s Bank: All applications must be submitted through the applicant’s bank to the Chairman of the Committee established under the Act.

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A cover letter signed by the vice-chancellor, rector, or the head of the institution, along with the student affairs officer of the institution, should accompany the application.

Required Documents: Each application must be accompanied by several documents, including a copy of the student’s admission letter.

  • Additionally, a letter from the guarantors addressed to the Chairman of the Committee, recommending the student for the loan and accepting liability in the event of default, is required.
  • The application should also include two passport photographs from each guarantor, information on the guarantors’ employment and proof of employment with the named organization, as well as particulars of the guarantors’ business registration or relevant authority if self-employed.

Application Status Communication: The Committee is obligated to communicate the status of the applicant’s application within 14 days of receiving the application.


The Students Loan Bill sets out the process for loan disbursement:

Timely Processing: Processing of any applicant’s application and disbursement shall be completed within 30 days of the application reaching the Chairman of the Committee, subject to Section 18 (4) of the Act.

This ensures that loans are processed efficiently and promptly.


The repayment terms for beneficiaries of the loan are outlined in the Students Loan Bill:

Commencement of Repayment: Loan repayment shall commence two years after completion of the National Youth Service Corps program.

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Salary Deduction: Repayment shall be facilitated through a direct deduction of 10% of the beneficiary’s salary at source by the employer. The deducted amount will be credited to the Fund.

Notification of Job Changes: In the event of a job change, beneficiaries are required to notify the Chairman of the Committee within 30 days of resuming employment with the new employer, providing details of the new job.

Self-Employed Individuals: Self-employed beneficiaries are required to remit 10% of their total monthly profit to the Fund.

Reporting of Self-Employment Status: Self-employed individuals assuming this status must submit relevant information, such as business name, address, location, registration documents (if applicable), bank details, partner names, and director/shareholder names, to the Committee within 60 days.

Penalties for Default: Any individual who defaults on the provisions of subsection (5) or aids in such default commits an offense and, upon conviction, is liable to a fine of N500,000 or imprisonment for a term of two years, or both.

  • This emphasizes the importance of adhering to the repayment obligations outlined in the Act and discourages default or aiding default.

The loan repayment terms and penalties aim to ensure timely and responsible repayment, contributing to the sustainability of the loan program and the availability of funds for future students.

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