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Nigeria passes bill on interest-free student loans

The Nigerian parliament has passed a bill seeking to establish a bank that can grant loans to students in higher institutions of learning – which include universities and colleges.

The bill is the first of its kind in Nigeria. It was passed by the two chambers of the National Assembly on Tuesday and will be forwarded to President Muhammadu Buhari for final approval.

The sponsor of the bill and speaker of the House of Representatives, Femi Gbajabiamila, said that the Nigerian Education Bank will offer interest-free loans to higher education students in Nigeria.

If signed into law, it is expected to enable students get more financial support from the government.

The bill says the bank “shall have the powers to approve and disburse the loan to qualified applicants. It will also monitor the students’ loan account/fund and ensure compliance in respect of disbursement”.

The loan beneficiaries are expected to start paying back the loan as soon as they gain employment, on completion of their studies and a mandatory national service.

Nigerian banks have been giving student loans only to the students’ parents, with very stringent conditions including a very short tenure.

Needy students have had to drop out of school or engage in odd jobs to pay their way through school.

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