Student Loan Act | Limits & Repayment Problem

The Student Loan Act which was passed into law on June 12, 2023, signed by the president of Nigeria, Tinubu Bola established an interest-free loan fund for Nigerian students who wants to further quality Higher Education.

This will help improve the standard and access to Higher Education for students. It will make way for a strict watch of appointed stakeholders and committees which are responsible for the Loan Act.

Only the Indigent student has access to Student Loans as stated in the Act as it aims at cost-effectively providing higher education.

Critics To The Enactment of the Student Loan Act

The Student Loan Act is an innovative program to help disadvantaged Nigerians who are unable to attend higher education or vocational institutions because of financial restrictions.

Eligibility criteria are cited in the Student Loan Act, which says that the applicants must submit its form through the chairman of the committee. The Act further states the criteria as follows:

  • The students must have been admitted into a College of Education or University
  • The annual income of the applicant or family must be less than 500,000.00.
  • A minimum of 2 guarantors are required of applicants. Each guarantor must be a civil servant with at least 12 years of service and a lawyer with at least 10 years of experience.

If the student or the parent earns an income that is less than required, it will lead to disqualification. Sadly the Student Loan Act established eligibility requirements based on existing circumstances without considering how standards might advance in the future.

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Also, the number of children being trained in school is not considered when the Act is constructed. This is a problem for the minimum income earners who cannot earn above 500,000.

The Student Loan is to assist needy students and parents in paying tuition fees for higher education but the criteria need to earn such a big amount disqualifies them. This Act should be reviewed to help achieve its aim of assisting indigent students.

Again, the request for a minimum of 2 guarantors from the applicants, each guarantor being a civil servant with at least 12 years of service, and a lawyer with at least 10 years of experience is a heavy and difficult requirement for the poor who are struggling to survive.

The calls for urgency for the need for the Act to be looked into and recovered because of the traits it develops for the needy.

The repayment period of 2 years after NYSC when closely examined, is discovered not to be enough for the indigent students to pay back the loan borrowed.

The unemployment rate in the country is alarming and students who graduate every year have no employment opportunity. This makes it impossible for them to repay at the due time.

Without sentiment, it is acknowledged that the Student Loan Act is working towards making accessibility of higher Education common in the country.

However, there is an important need for the rigorous criteria to be reconsidered as it affects the Administration of the Loan. And a hindrance to achieving its aims of establishing a Student Loan.

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Limits to Student Loan

Many ask does the student loan cover only school fees or if it extends to other payments. The truth is that the Act that governs Student Loan makes it clear that it is only for paying school fees which will be paid into the university account.

Other payments such as accommodation, textbooks, and feeding costs will not be provided by the individual.

This is not assisting the poor rather it becomes putting them in a spot. If a student loan should be provided it should cover all expenses that will be incurred in the course of studies.

More to the above mentioned, the student loan Act States that only universities, colleges of education, polytechnic, and other vocational schools under the federal are eligible to apply.

This means that there is an exclusion of private universities. Many private universities should be offered an opportunity to have access to an interest-free loan. They are students too and should be treated with Equality.

There is a need for the Student Loan Act to be directed to helping as many students as possible with placing high requirement that is painstaking.

These Acts should be given a second thought and reconsidered to fit into the category described in the mission of the establishment.

Challenges of Student Loan Repayment Period

In line with the Student Loan Act, the repayment period for the loan is 2 years after NYSC has been concluded. This means that students are required to pay back the loan borrowed after two years of graduation.

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If by chance the student or parents happen to have a change in their job, immediately send a notification to the chairman of the committee and provide the details of the new business or work.

The single act will prove that you are responsible and will be appreciated. When a student fails to repay the loan before the time indicated for it legal actions might be taken

That doesn’t necessarily mean that the defaulter will be imprisoned but other measures will be followed to make sure that the money is recovered.

Taking into notice the high level of unemployment in the country it is obvious and crystal clear that the repayment of the loan is low, this is a big problem.

The Student loan should be deducted from the student’s account every month but what if the student earns little and has nothing to fall back on after each deduction at the end of the Month?

Hence the need for a review on how best it can be amended to be in favor of both the student and the government.


Student Loan Act should be reconsidered and geared at promoting and achieving its many purposes. It should be an assistance to the indigent students and not the other way round.

Make sure that you are capable of obtaining a loan to avoid falling into debt and depression. The Legal procedures should be taken lightly with defaulters to avoid traumatizing the students.

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