The Student Loan Bill was introduced in 2016 by the outgone speaker of the House of Representatives, Hon. Femi Gbajabiamila, and was passed into Law by President Bola Ahmed Tinubu on June 12, 2023. The Act seeks to provide easy access to higher education for Nigerians through interest-free loans from the Nigerian Education Bank.
The Act provides for equal rights to access the loan by students seeking higher education in any public institution of higher learning in Nigeria. The loan granted to any student under this Act shall only be directed towards the payment of tuition, and the grant of this loan is subject to certain requirements such as:
- Securing admission into any of the Nigerian Universities, Polytechnics, Colleges of Education, or Vocational Schools established by the Federal Government or State Government.
- Applicant’s income or family income must be less than Five Hundred Thousand Naira(N500,000) per annum.
- Provision of at least two guarantors; each of the guarantors must be a civil servant of not less than level 12 years in service or a lawyer with at least ten (10) years post-call experience; a judicial officer; a justice of peace. Section 18
A student may also be disqualified from accessing the loan for any of the following reasons:
- Proven to have defaulted in respect of any previous loan granted by any organization
- Found guilty of exam malpractice by any school authority:
- Convicted of a felony or any offence involving dishonesty or fraud;
- Convicted of drug offences;
- Any of the parents has defaulted in respect of students loan or any loan granted to him/her. Section 19
All applicants must apply via their respective institutions. Each institution must ensure that applications from its school must reach the Bank not more than 30 days after the close of admission for the Academic year. Section 20
The Act further establishes the Nigerian Education Bank (“the Bank”), which shall be a body corporate with perpetual succession, having the power to sue and be sued in its name. The Bank has the function of supervising, coordinating, and monitoring the management of Student Loans in Nigeria. The Bank shall also have a governing board of 12 members appointed by the president and subject to confirmation by the National Assembly. The Governing Board shall hold office for a term of four years and may be reappointed for another term of four years. The shares of the Bank shall be taken up by the Federal Republic of Nigeria to be paid for by the Accountant General through the consolidated revenue fund of the Federation. Sections 5,6 &7.
The Act also establishes the Student Loan Fund (“the fund”) to which funds from the bank shall be paid. All monies paid to the fund shall be for the purpose of granting and disbursing loans to qualified applicants. The fund of the Bank shall consist of the following:
- Interests arising from deposits in the bank
- Education Bonds
- Education Endowment Fund Scheme
- 1% of all taxes, levies, and duties accruing to the Federal Government from Federal Inland Revenue Services, Nigerian Immigration Services, and Nigerian Customs Services.
- 1% of all profits accruing to the government of the Federation arising from oil and other minerals
- All sums accruing to the fund by way of donations, gifts, grants, endowments or otherwise
- Interest and Revenue accruing from savings and investments made by the Bank
- Other revenue accruing to the Bank from any source. Sections 15 & 16
Applications must be processed and sent to the Minister for approval within 30 days of the application reaching the Bank. Beneficiaries of the Loan are expected to commence repayment two years after the completion of the National Youth Service Corps Programme. Repayment shall be by direct deduction of 10% of the beneficiary’s salary at source by the employer and credited to the Students Loan Account prescribed by the Bank. Where a beneficiary is self-employed, he shall remit 10% of his monthly profit to the Student Loan Account prescribed by the Bank. Anyone in default is guilty of an offence punishable by two years imprisonment or a fine of Five Hundred Thousand Naira (N500,000) or both. Section 22
The Act also provides that the provisions of the Public Officers Protection Act shall apply in relation to any suit instituted against any officer or employee of the Bank in their official capacity. Section 23
The time frame stated in Section 21 for disbursement is very fair. It captures the reality and the fact that the admission process needs to be timely sorted out to ensure that the students can indeed face their studies.
A two-year period after completion of NYSC is also very commendable as it gives the student the opportunity to attain a certain level of stability before commencing payment of the loan. The Act is however silent on if there is room for extension and on what grounds such extension may be sought.
The Act has dealt with a major hurdle for indigent students in accessing higher education, however, a major challenge is that the loan only covers tuition. It is strongly recommended that the Loan should not only be limited to tuition but should cover other important areas like feeding, accommodation, and books for indigent students as well in order for the access to education by the indigent student to be fully maximized.
The composition of the board has failed to take into consideration students. The board should have included a student representative who would be able to convey to the board the reality of operations as regards the entire process. Most times, failure to include a student representative will lead to incorrect information and data.
The process of applying through the institution though seems to be the best route; however, there is no system to checkmate abuse or deliberate deprivation of access due to personal vendetta or issues. The Act or the board may need to put a system that will checkmate abuse of the system by the persons in charge in various institutions.
The big question is how will the Board verify that the Applicant’s income or family income is less than N500,000? Nothing stated therein provides the modalities for stating the disclosure of income. The rules or regulations to be made pursuant to the Act must address the mode of determining the income of an Applicant or family members. Further, this provision will appear discriminatory as it seems further to establish a class structure between the poor and rich.
The conditions stated with respect to guarantors seem very stringent. Any student whose income or family income is below N500,000 might find it difficult to meet any of the criteria. Surely, there must be an alternative for the sake of equal access to opportunities. The Act could have included a lecturer or a village chief. This will bring it home and ensure that access is given to all irrespective of background.
Another issue not yet addressed is why the Act is conferring Public officer status on the officers of the bank. This is an unnecessary shield and should not have found its way to the Act.
A very important issue that has not been addressed by the Act is the duration for which the tuition fee covers. Will it cover the tuition for the entire undergraduate program? Or is it yearly? If yearly? Is the student permitted to reapply? Are there drawbacks to re-applying? Or is it a one-off scheme to capture as many students as possible? The Act has not stated this clearly, and this should be done to avoid any form of ambiguity.
In conclusion, the Act is a very good addition to our body of laws. It is to be seen the impact it will make as well as the practicality of same. The accessibility of the funds and the usage of same will be the bedrock for efficiency and application. There will be a need to checkmate the possible rise in tuition fees by institutions. It is also strongly recommended that a regulation is issued that will resolve the posers and loopholes raised in this article and ensure that the Act achieves its desired purpose.