The Student Loan Bill was sponsored by the former speaker of the 9th House of Representatives Femi Gbajabiamila. Nigerian President, Bola Ahmed Tinubu recently signed the student loan bill into law, ushering in a transformative era for educational funding in the country. We are aware of the controversy in relation to the constitutionality of its signing by the President. It has been argued that the signing was in breach of Section 58(4) and (5) of the Constitution of the Federal Republic of Nigeria. Some have also expressed concerns about the enforceability of the provisions of the Act against a student who may not have attained contractual age. This has led to the issue of whether education is considered necessary or not. This is not the focus of this write-up. The focus is on the implementation and operations of the law for the betterment of the nation.
Obviously, the primary objective of the Act is to make higher education more accessible to Nigerians through student loans, with the goal of providing quality education to all Nigerians with less financial burden.
The Act specifies criteria for eligibility for accessing the loan. Section 14 of the Student Loan Act provides that students seeking loans must apply to the chairman of the bank through their respective institutions if they meet the following criteria.
- Applicants must have been admitted into any Nigerian university, Polytechnics, College of Education, or any Vocational School established by the Federal and State Government of the Federation.
- Applicant or Family income must be less than #500,000.00 (Five Hundred Thousand Naira) per annum.
- Applicants must provide at least Two Guarantors. Each of the Guarantors must be a Civil Servant of not less than 12 years in service, or a Lawyer with at least 10 years post-call experience; a Judicial Officer, or a Justice of Peace.
Section 18 of the same Act also provides that the Repayment of the Loan will commence two years after completion of the National Youth Service Corps Programme.
Undeniably, the enactment of the Student Loan Act is a unique initiative to assist underprivileged Nigerians who are unable to pursue higher education or vocational schools owing to financial constraints. However, this Act appears to have set out criteria for eligibility based on current realities without anticipating future improvement in standards of living. The threshold for financial qualification is that applicant and their families who earn less than five hundred thousand naira every year may make the vast majority of the vulnerable unqualified. Whenever the minimum wage is reviewed for an increase, most students would be ineligible to apply for a loan because they would no longer qualify due to the increase in the minimum wage.
The Act also fails to take into account parents who have many children attending higher institutions and are making more than Five Hundred Thousand Naira a year. Clearly, the fundamental objective of the law is to assist parents and students to access higher education and ease financial strains. Parents who earn above five hundred thousand naira per annum with more than one child in higher institutions may be unable to take advantage of the law. Special accommodations should be made for those who fall into this category so that they can all take advantage of the student loan initiative. There is a need to reconsider the financial threshold for qualification.
The Act may have unwittingly destroyed the very fundamentals of its creation by leaving many vulnerable outside its net. With the enactment of this Act, there is a great possibility of an increase in school fees, making it difficult for individuals who are not eligible to apply for loans to pay their tuition.
Further, given that the Student Loan Act is to assist poor Nigerians, the stipulation that the applicant must furnish at least two guarantors, each of whom must be a civil servant with at least 12 years of service may be an herculean task for the poor. It may be a big challenge for the poor to get a lawyer with ten years of post-call experience as a guarantor. How is a student who lacks the funds to complete his study going to be able to find a lawyer with ten years of post-call experience to serve as a guarantor? The statute has to be reconsidered because few poor Nigerians will be able to utilize this student loan program as a result of this clause.
Additionally, the repayment plan is impractical because students must repay the loan two years after completing National Youth Service Corp. It is not news that some graduates struggle to find employment in the years following NYSC due to a lack of job opportunities in Nigeria.
Admittedly, the enactment of the Student Loan Act is a laudable step towards the provision of quality education easily accessible to the vulnerable in society. However, there is a need for appraisal in view of the development that will occur in the course of this administration. Clearly, the aim of this administration is to improve the standards of living of Nigerians. The financial threshold of less than Five Hundred Thousand Naira earning per annum to be eligible for the loan may be detrimental to its objective of easy accessibility to education. Many will be left out of the coverage of the Act. We recommend a review of the law to take care of these gaps or else many people in need may be denied access in spite of the Act's laudable provisions.
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