Between students loan scheme and affordable tertiary education

When President Bola Tinubu recently signed the Students Loan (Access to Higher Education) Act 2023, nobody close to his new administration was under any illusion that it would not generate mixed reactions.

Curious that the bill was signed into law barely two weeks into the Tinubu administration, many who opposed it said it was driven by an eagerness to be seen as hitting the ground running.

The bill was sponsored by the immediate-past Speaker of House of Representatives, Femi Gbajabiamila, now Tinubu’s Chief of Staff.

Mr Dele Alake, Special Adviser on Special Duties, Communications and Strategy to the president, defended the act as a campaign promise kept.

“And today, that promise he made has been kept. He has just signed that bill into law, which henceforth would allow or enable our indigent students to access Federal Government’s loans to fund the educational pursuit or career,” Alake said.

But critics were quick to tear down some key provisions of the act, stating that the law’s workability and success depend on other factors which are not in place.

The National President of the Academic Staff Union of Universities (ASUU), Prof. Emmanuel Osodeke, told a national daily that the Act was discriminatory.

Osodeke had said at the National Summit on Tertiary Education Reform in 2022 that the student loan scheme would create more problems than the ones it is trying to solve.

The National Vice President of the Senior Staff Association of Nigerian Universities (SSANU), Abdussobur Salaam, was quoted by the media as saying that t the government imposed the Act on Nigerians.

However, there are other groups in support of the new law, including the National Association of Nigerian Students (NANS) who members are the direct beneficiaries of the law.

Whether in support or against, analysts have pointed out that the concept of student loans is not new to Nigeria.

The scheme was first introduced by the military administration of retired Gen. Yakubu Gowon in 1974. And unlike provisions of the new act, the loan was repayable after 20 years of graduation.

There was also Act in 2004 that established the Nigerian Education Bank to approve and disburse loans for educational purposes, which the present Act has repealed.

Section 3 of the new law states that: “The loans referred to in this Act shall be granted to students only for the payment of tuition.”

Critics say since there is presently no such thing as “tuition fees” in Federal Government-owned institutions of higher learning, the law only means one thing – its introduction.

Also, some stakeholders are say the creation of the Nigerian Education Loan Fund by the law would only increase the notoriety of bureaucratic bottlenecks which have been the bane of many such policies.

According to Section 5(6) of the new law, “The Fund shall be domiciled with, managed and administered by the Central Bank of Nigeria through the money deposit banks in Nigeria for the purpose set out under section 6 of this Act.”

The loan fund will also supervise, administer and monitor the management of the scheme, with an additional Special Committee of 11 people. In contrast, Gowon’s scheme disbursed to students through the universities.

Perhaps the contending doubts around the law are the issues of eligibility and repayment contained in Sections 14 and 18 respectively.

Among other requirements, an applicant’s income or that of their family must be less than N500,000 per annum and must provide at least two guarantors, who would present particulars of business registration with the Corporate Affairs Commission.

Beneficiaries are also required to commence the repayment of loans two years after completing the National Youth Service Corps programme.

“Repayment shall be by direct deduction of 10 per cent of the beneficiary’s salary at source by the employer and credited to the Fund.

“Where the beneficiary is self-employed, he shall remit 10 per cent of his total profit monthly to the Fund.” the section reads.

Stakeholders say, like many failed social investment and education policies, the law is lacking in feasibility.

Dr Temitope Babalola, an Associate Professor of Soil Pedology at the Federal University Oye-Ekiti, said the law failed to consider prevailing socio-economic issues.

“We are discussing repayment in two years without considering job availability for graduates and poor database to identify the actual people that need the loan.

“Also, how would the law address poor wages and low standard of living? At N500, 000 per year, the definition of who qualifies is whose parents are earning less than N42,000 a month!”

Babalola, who is also the Acting Head of Department, Soil Science and Land Resources Management, said the government should have retained and restructured the Nigerian Education Bank for such a scheme.

“Let the private sector invest in it and interested families should open and run accounts with a minimum opening deposit and monthly deposit. That will solve the challenge of database and repayment”, the don said.

However, there are others who believe that in spite of its shortcomings, Nigerians should not be quick to throw the baby out with the bathwater.

A social commentator, Azubuike Ishiekwene said in a newspaper write up that the scheme should be restricted to only students in any of the Science Technology Engineering and Mathematics (STEM) courses.

While also canvassing the need for the financial threshold for the students’ loans to be adjusted, he warned that no policy would work optimally if there’s no cut in the cost of governance.

As the debate continues, the government should consider alternative schemes to be established or revamped to complement the student loan programme.

For instance, if the scholarship boards are repositioned for better effectiveness, students who miss out on loans could be placed on scholarships or receive grants.

Stakeholders also say that government should take necessary measures to ensure that corruption does not mar the implementation of the scheme as has been witnessed in several others such as the pension scheme.

Transparent implementation of the scheme will go a long way in taking huge financial burden off the shoulders of parents and free up family resources for other critical areas such as health and shelter.

By Kayode Adebiyi