Again, on the Student Loans Act

In 2016, Femi Gbajabiamila, the immediate former Speaker of the 9th House of Representatives, took a bold step by introducing a bill aimed at addressing the financial challenges faced by students in higher education institutions across the country. The proposed legislation, known as the Student Loan Act, sought to provide students with access to loans from the federal government to alleviate the burden of educational expenses.

After its initial introduction, the bill was later reintroduced in 2019. However, when it resurfaced in 2022, it sparked a heated debate within the National Assembly, with members expressing divergent views on the matter. 

On June 12, 2023, President Bola Ahmed Tinubu signed the Student Loan Bill into law, demonstrating his administration’s commitment to strengthening the educational sector of the country. 

Although concerns have been raised regarding the extent of student access to these loans, considering the persistently high rate of unemployment afflicting the country, one of the key considerations surrounding the implementation of the Student Loan Act is the number of students who will benefit from the financial assistance, as it remains unclear how many students will qualify for and receive loans. 

The current provision stating that loan repayment begins two years after the completion of participation in the NYSC programme is being questioned. With graduates struggling to secure employment for up to eight years or longer, the government should reassess this strategy. Given the prevailing circumstances, it is highly unlikely that the beneficiaries will be able to repay their loans within such a short timeframe. 

I was also taken aback when I discovered a particular element of the loan procedure: defaulters face the risk of being fined N500,000 or even being incarcerated for up to two years. Is it, not a grave injustice to punish our helpless teeming youths who are already battling to secure jobs with imprisonment simply because they are unable to repay their loans? 

The fundamental component of the loan process that caught my attention is the requirement for students to provide at least two guarantors who must meet specific criteria, such as being a civil servant of at least Grade Level 12, a lawyer with at least 10 years of post-call experience, a judicial officer, or a justice of the peace. This provision raises concerns, particularly for individuals residing in rural areas or those without any relatives in government positions who could serve as guarantors. 

Since the loan programme intends to support the financially disadvantaged, the requirement for guarantors with specific professional backgrounds seems to create a barrier for those who lack connections with people in high positions in government.  

Another facet of the Act that appears contradictory is the provision that a student’s family must have an income of less than N500,000 to qualify for the loan. This condition seems to limit the accessibility of the loan to only a select few people, raising questions about the effectiveness and inclusivity of the Loan Act. 

The intention behind setting an income threshold may have been to target students with financial constraints, ensuring that only those with the greatest financial need receive the necessary support. But the specific income limit of N500,000 may inadvertently exclude a considerable portion of students who could benefit from the loan. 

Considering the drawbacks of the Loan Act, it becomes evident that the federal government should augment its efforts to fund tertiary institutions across the country. By so doing, education can become more affordable and accessible to a wider range of students. 

While providing loans to students is one possible solution, it is essential to address the underlying issue of inadequate budgets for public universities.  

The United Nations Educational, Scientific, and Cultural Organisation (UNESCO) recommended that developing nations give up to 15–20 per cent of their annual budget to public education. Nigeria’s allocation to the education sector has not been meeting the UNESCO standard. 

The government at all levels should prioritize funding for education as a necessary step before implementing student loans.  

Ibrahim Abubakar, Department of Mass Communication, University of Maiduguri