By Caleb Ijioma
In Nigeria, lack of finance has been a significant issue for people seeking to study in higher institutions. This limitation has resulted in some students abandoning their academic pursuits, while others who are self-sponsored grapple with work and academics. The cost of education in Nigeria is not affordable, which, added to the bad economy and poor budget allocation has posed a threat to students willing to get a degree.
The student loan bill, however, promises to reduce this burden as students can have access to loans to pursue their undergraduate programmes.
The Student Loan Bill
In November 2022, the two chambers of the National Assembly passed the Students Loan Bill, which would enable students in higher institutions of learning to gain more access to financial assistance.
The bill, which was sponsored by the House of Representatives speaker, Femi Gbajabiamila, was titled ‘A Bill for an Act to provide for easy access to higher education for Nigerians through an interest-free loan from the Nigerian Education Bank established in this Act with a view to providing education for Nigerians and for other purposes connected thereto.’
The bill seeks the establishment of the Nigerian Education Bank, which will have the power to administer, coordinate, supervise, and monitor the management of student loans in the country. It will also receive applications for student loans through higher institutions in Nigeria on behalf of the applicants and screen the applications to ensure that all requirements for the grant of such loans under the Act are satisfied.
The bank shall also have the powers to approve and disburse the loan to qualified applicants; control, monitor, and coordinate the students’ loan account/fund and ensure compliance in respect of disbursement; monitor the academic records of grantees of the loan to obtain information on their year of graduation, national service, and employment to ensure that grantees of the loan commence repayment of the loan as at when due, among other functions.
The bill also provides that, notwithstanding anything to the contrary contained in other enactments, all students seeking higher education in any public institution of higher learning in Nigeria shall have an equal right to access the loan under this Act without any discrimination arising from gender, religion, tribe, position, or disability of any kind.
How To Be Eligible For The Student Loan
Students applying for a loan under the Act shall apply to the Chairman of the Bank through their respective institutions. To be eligible, the applicant must have secured admission into any of the Nigerian Universities, Polytechnics, Colleges of Education or any Vocational School established by the Federal Government or the government of any state of the Federation; must have an income or family income less than N 500,000 (Five Hundred Thousand Naira) per annum; and must provide at least two guarantors: each of the guarantors must be a civil servant of not less than level 12 in the service, or a lawyer with at least 10 years post-call experience, a Judicial Officer, or a Justice of the Peace.
A student is disqualified from accessing the loan if he is proven to have defaulted in respect of any previous loan granted by any organization, if he has been found guilty of exam malpractice by any school authority; if he is convicted of a felony or any offense involving dishonesty or fraud; if he has been convicted of drug offenses; and if any of the student’s parents have defaulted in respect of the student’s loan or any loan granted to him/her.
Student Loan With High Unemployment Rate
With the devastating statistics of unemployed people in Nigeria, student loan repayment might be difficult.
According to the Act, the repayment of the loan shall commence two years after the completion of the National Youth Service Corps programme. The repayment will be by direct deduction of 10% of the beneficiary’s salary at source by the employer and crediting the student loan account to be prescribed by the bank. Where the beneficiary is self-employed, he shall remit 10% of his total profit monthly to the Student loan account to be prescribed by the Bank. This calls for concern.
Nigerian Bureau of Statistics (NBS) 2020 data (still the latest) pegs Nigeria’s unemployment rate at 33.3 percent.
This, however, doesn’t meet with the current reality. Different groups have projected an increase in the unemployment rate in 2023. The Nigerian Economic Summit Group (NESG) projected that the country’s unemployment rate would hit 37 percent in 2023. Unemployment has become unabated, and this can affect loan repayment since graduate employment is a cardinal principle upon which repayments are premised and structured.
Student Loan Bill Not An Ultimate Solution
Gideon Adeyeni, a social activist and member of the Education Rights Campaign, argued that instead of copying the student loan model from other countries, Nigeria should look at ways to guarantee access to education without putting a loan burden on the people.
Adeyeni posited that with the introduction of the student loan bill and poor funding of education, students will have to pay exorbitantly for the education they are getting in schools.
“Now, if the government will not fund education properly and instead provide loans to students, it will mean that students will have to pay exorbitantly for the education they are getting in these schools. So, in federal universities where they pay 60 to 70 thousand naira, the cost price may increase by 400 to 500 percent
“This would mean a heavy loan burden on people who go through these institutions to get some degrees or diplomas. Even if it may end incessant strikes (which I doubt), it will be creating a greater problem than it will be solving.” he said
He raised concerns over the importance of the student loan bill as against funding education and increasing projectory allocations to schools.
“While the loan in the immediate, may increase access to education probably, which is not certain to be the case in Nigeria, ultimately, it will not lead to guaranteeing access to education for all, which is all we should be aiming for.
“You will recall that most of the strikes, if not all of the strikes by academic non-academic staff unions of all tertiary institutions, have been based on the funding of the university and other tertiary institution education in the country. The demand has been for proper funding, increase projectory allocations to education which the government has refused to do and now they are responding to student loan bill.” he said.
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