THE IMPACT OF STUDENT LOAN INTEREST RATE ON BORROWER REPAYMENT BEHAVIOUR IN NIGERIA.
Abstract
ABSTRACT
The broad objective of this study is to evaluate the impact of student loan interest rates on borrower repayment behavior in Nigeria. Specifically, this study sought to evaluate the factors influencing student loan repayment behavior in Nigeria, determined the extent of default rates of federal student loan borrowers in Nigeria, assessed the impact of varying interest rates on the repayment behavior of borrowers of the federal student loan in Nigeria and investigated the repayment behavior of federal student loan borrowers in Nigeria. The study adopted the survey research design and randomly enrolled participants in the study. Self- structured questionnaire was issued to the respondent who are students of Abubakar Tafawa-balewa University, Bauchi State of which two hundred and sixty-two (262) were returned and two hundred and fifty-nine (259) were validated for the study. The study made use of descriptive analysis and inferential statistics where data from field survey was analyzed using simple percentage, mean and standard deviation presented in frequencies and tables. Descriptive statistics which include frequency, percentage and tables were used to present the data. Hypothesis was tested using Chi-Square statistical package for social sciences(Spssv23). From the analysis of the responses on on the factors influencing student loan repayment behavior in Nigeria, the result shows that income level significantly impacts ability to repay student loan, job opportunities available to affect loan repayment behavior, interest rate on the loan influences how quickly it is paid back and grace period provided affects approach to loan repayment. The study among others recommends that the government, through the National Orientation Agency (NOA) and educational institutions, should launch widespread awareness campaigns about the Federal Student Loan Initiative. This would ensure that eligible students, especially in rural areas, are informed about how to access the loan.
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