Still On Student Loan Scheme

Recently, President Bola Ahmed Tinubu, announced a new date of January 2024 for the commencement of the Student Loan Scheme which was signed into Law in June 2023. This was after the programme failed to take off by September as earlier scheduled.  Many Nigerians had seen the law as a great relief and a solution to the challenge of funding in the education sector especially for students.

In June, the government said it had begun putting all necessary measures in place to ensure that the scheme commenced between September and October 2023. The President had approved a committee made up of ministries and agencies to see to its realisation. But the committee failed to carry out its mandate expeditiously leading to the announcement of a new date.

It is against this backdrop that we, as a newspaper, urge the government to keep to its promise this time round, by working out modalities for students to start accessing the loans by January 2024. We also consider it imperative for the government to review certain components of the scheme with a view to making it function as efficiently as possible.

On paper, we are of the view that the loan scheme is a lifer-saver for the intended beneficiaries. But we are apprehensive that the devil may be in the detail. Already, stakeholders have raised concerns about the stringent conditions attached to the scheme such as the period of repayment, and others. 

Similarly, it is important, in our view, that the policy as a whole be reviewed. The section that stipulates the amount to be accessed by students is not sufficiently tidy in our considered opinion. For instance, the law says that students can only access a maximum of N500, 000 or $650 per academic session. With the present value of the Naira, N500,000 is just painfully paltry indeed. At the current market rate of the currency, is $650 the equivalent of N500,000? There’s little that the amount can do today for any student.

Another concern is that the nation was told that tuition in all government schools remains free and that the only fees that have been increased are accommodation, laboratory, library and other costs. So, if tuition is free and the Students Loan Act covers only tuition fee, it means the Student Loan Act is pointless. It doesn’t cover any other educational expenses. This contradiction needs to be revisited.

The steps to access the loan are perceptibly cumbrersome. For instance, it says that students must apply to the Chairman of the Bank through their respective institutions upon securing admission into public Nigerian university, polytechnics, colleges of education and others. But where is the Nigerian Education Bank? When will it be established? How will it be funded? These are pertinent questions that require urgent answers.

Other issues that require to be clarified are as they affect applicant’s income or family income that must be less than N500,000 per annum, while applicant must also provide at least two civil servants as guarantors: of not less than level 12 in the civil service; or a lawyer with at least 10 years post-call experience; a judicial officer; or a Justice of Peace. Also, students who have defaulted in previous loans; found guilty of exam malpractices, felony, drug offenses will not be considered.

Furthermore, students with parents who have defaulted in respect of previous loans will not be considered, while all applications will be submitted through the Students Affairs Office via a list of all qualified applicants from the institution by a cover letter signed by the Vice Chancellor or Rector or the head of the institution. We are worried that very few students and their parents will pass this test to be able to access the loan.

The government has continued to insist that the law provides easy access to higher education for indigent Nigerians through interest-free loans from the Nigerian Education Loan Fund. But to this moment, there are no structures on ground to suggest that the scheme is about to take off.

Repayment of student loans in the United States, for instance, begins six months after graduation, and the terms of the loan will determine the length of the repayment period and the interest rate. This is one aspect of the student loan scheme that the government can adopt. Is that six-month provision applicable in a situation where a student remains unemployed five years after graduation?  

In a nutshell, the federal government must ensure that everything that needs to be done for the commencement of the student loan scheme in January must be seen to be in place by the end of the year, 2023. There should be no further excuses by January next year. The level of preparation will tell whether this policy is viable or not.

We urge the government to go beyond the student loan scheme and prioritise education by investing in schools. This will go a long way in ensuring that every Nigerian child has access to quality education. This includes increasing funding for education generally and improving the quality of teaching and learning in schools.