FCT, Abuja—Nigerians have many questions about the recently updated student loan bill that President Bola Ahmed Tinubu signed. After the Nigerian Senate and House of Representatives approved the bill for presidential approval, Tinubu signed it.
This happened after the Committee on Tertiary Institutions and the TETFund’s findings were independently assessed by the Senate and the House of Representatives.
The Nigerian Education Loan Fund is intended to be established by the executive bill, which is titled “A Bill for an Act to repeal the Students Loans (Access to Higher Education) Act, 2023, and to Enact the Student Loans (Access to Higher Education) Bill, 2024.”
The organization would be founded as a corporate body with the express purpose of overseeing, managing, and investing money for the purpose of lending money to Nigerians who are interested in further education, career training, skill development, and other associated endeavors.
Students from impoverished backgrounds in Nigeria who attend universities, polytechnics, colleges of education, and vocational schools are eligible for the program.
What application mode is needed?
The student loan program is entirely computerized. During application, all human interaction is removed. To apply for a loan, applicants do not require an applicant. Which are the main prerequisites for applying?
- Registration number for the Joint Admissions and Matriculation Board (JAMB)
- Bank Verification Number (BVN),
- Matric Number (or school registration number),
- National Identification Number (NIN),
Things to be aware about
The Nigeria Education Loan Scheme (NELFund) was to be established as a corporate body with the legal authority to bring and defend legal actions under its own name, according to the new bill.
Additionally, the measure gives the Fund the power to lend money to eligible Nigerians, assisting them with the cost of tuition, fees, other expenses, and maintenance while they are enrolled in accredited postsecondary and vocational education institutions in Nigeria.
The revised bill eliminates the guarantor requirement and the family income barrier as qualifying requirements, and also states that “student applicants can no longer be disqualified based on their Parent’s loan history.”
Additional Understanding
President Bola Tinubu gave the Nigeria Education Loan Fund (NELFUND) management instructions earlier in February, according to a report from Nairametrics. to broaden its scope by providing interest-free loans to Nigerian students seeking skill-development program.
Furthermore, the President emphasized the imperative of equity and inclusivity in the program’s management.
- “No matter how economically challenged you are, accredited and qualified students will and must have access to this loan to advance their education in higher institutions. There is no compromise in our commitment to the disadvantaged citizens of this nation,”Tinubu said.
According to FG, student loan repayment would start two years after NYSC.
The Nigeria Education Loan Scheme (NELFund) repayment process will start two years after beneficiaries complete their National Youth Service (NYSC) obligations, according to a Federal Government announcement.
This revelation was revealed on Thursday in Abuja during an interview with the News Agency of Nigeria (NAN) by Dr. Akintunde Sawyer, the Executive Secretary of NELFund.
According to Sawyer, the two-year grace period that comes after the NYSC is intended to allow participants enough time to get work and establish financial security prior to beginning repayments.
- According to the legislation, students who begin paid employment must repay their loans two years after completing their NYSC, but they are not prohibited from repaying earlier.
- “But we can’t make them pay if, two years after NYSC, they don’t have a job. How are they going to obtain the funds? Thus, we shall assist them while we wait for their payment. Employers will have access to a register of all borrowers so they can know who has taken out a loan.
- “Once they identify a loan recipient, they will be required by the payroll system to return 10% of the loan amount when they hire that person.” earnings of that individual back to the fund,’’ he said.
Sawyer said that the modalities of how the money would be rooted were still being worked out, but the employer would be obliged to make those deductions for as long as that person is at work.
“They are not required to pay if they are unable to find work or if they lose their positions.
“Our goal is not to convert applicants into lawbreakers; rather, we aim to assist Nigerians in obtaining higher education so they can better their lives and the nation’s social-economic advancement can be enhanced overall,” he continued.
Things to be aware about
According to the budget’s specific appropriation, the federal government allocated N50 billion to the student loan program in the 2024 budget.
Additionally, President Bola Tinubu directed the management of the Nigeria Education Loan Fund (NELFUND) to expand the organization’s reach by offering interest-free loans to Nigerian students pursuing programs for skill development.
Known as the “Access to Higher Education Act,” it was passed in June 2023,” this initiative established an Education Loan Fund.
The Education Loan Fund, backed by the Student Loan Act, aims to provide interest-free loans to Nigerians pursuing tertiary education and skill development programmes.
“This program is not exclusive. It serves the needs of all of our youth. Nigerian youth exhibit talent in a variety of fields.
This isn’t just for people who wish to work as accountants, lawyers, or doctors. It’s also for people who want to create our country with their expert and trained hands.
He stated, “In light of this, I have directed NELFUND to investigate all avenues for implementing skill-development initiatives, as not all individuals aspire to pursue a four-year degree.”
Student Loan Act’s effects on Nigeria’s Access to Higher Education
In keeping with his campaign pledge to implement a trial student loan program that will increase access to education for all students, regardless of background, President Tinubu signed the Access to Higher Education Act 2023 into law on Monday, June 12. Known by many as the “Student Loan Act,” this law aims to give Nigerian students attending postsecondary institutions access to interest-free loans and creates the Education Loan Fund to assist Nigerians in paying for their higher education. The amount that can be received, both minimum and maximum, is not specified by law; it is limited to the payment of tuition fees, which must be repaid in installments two years after the National Youth Service Corps (NYSC) program is completed.
The Act, which was introduced as a part of efforts to close the budget gap for education in the university sector, has drawn both enthusiastic and harsh criticism. Emmanuel Osodeke, the president of the Academic Staff Union of Universities (ASUU), explained the action as an attempt by the government to “systematically” cut off funds for public universities and raise the cost of higher education out of the reach of low-income Nigerians. As expected, a few days later the Ministry of Education declared that the federal government could no longer afford to support institutions, resulting in an absurd increase in tuition costs. On August 24, however, Usman Barambu, the president of the National Association of Nigerian Students, requested that the legislature reconsider the Act in order to ease access and reflect economic realities.
What does this signify for Nigerian higher education?
Nigerian tertiary education faces several obstacles, chief among them being money, which has a big influence on access and quality. The UNESCO recommendation that developing nations (like Nigeria) devote 15-20% of their resources on education is frequently not met by the budgetary allocations. The budget for education in 2023 is the fourth highest, at NGN 1.08 trillion (USD 2.4 billion), 5.3% of the budget overall and 16% more than that of the budget for 2022. Nevertheless, this amount is still less than the UNESCO proposal. This translates to antiquated curricula, inadequate facilities, and lecturers who are not paid. Due to an ongoing strike, tertiary institutions were closed for more than ten months between 2022 and 2023 by the Academic Staff Union of Universities.
Nowadays, fewer than half of the 1.5 million applicants who sit for the entrance exams to postsecondary schools, known as the Unified postsecondary Matriculation Examination (UTME), get admitted. Even when some of the candidates fall short of the qualifying scores, many public schools are underequipped to handle all of the hopefuls. Just 612,098 candidates, or 33.7% of the 1.8 million who took the UTME in 2019, were admitted. According to data from the Joint Admission and Matriculation Board, which administers the exams, 367,499 students applied for the 43,717 available slots in the college of medicine, and 231,907 individuals applied for the 93,277 available spaces in the social sciences, just like in the other faculties.
Up to 4 out of 10 Nigerians, according to the World Bank, live below the USD 1.9 daily poverty level. Nigeria has continued to hold its position as the global center of poverty since 2016. For this reason, a large percentage of the population frequently cannot pay tuition fees and related costs. Many qualified students are therefore discouraged from pursuing postsecondary education as a result. The Act addresses this and should result in a rise in enrollment for students who otherwise could not afford it, advancing the nation’s workforce and development. Higher education is made possible by the loan, but there is a payback obligation attached to it. Despite the Act’s provision that payments must begin two Years after the required NYSC program ended, unemployment is rising in Nigeria, where there are few opportunities for successful self-employment or even post-graduation work. Out of 21 million Nigerians, one in five are underemployed, and the country’s unemployment rate is expected to increase to 40.6% in 2022 from 37.7% in 2022. Students’ debt profiles can get worse as a result of this. Therefore, the government itself needs to contribute to encouraging the kind of investment and growth that leads to the creation of jobs.
Education quality is another important factor. Formal or informal education is a major factor in determining career prospects. Therefore, in order to prevent the impending employment crisis, countries must prioritize high-quality education and encourage the creation of new job possibilities. No matter how long they spend studying or receiving training, young people with low levels of education will never be able to contribute meaningfully to the workforce. Even if more students enroll as a result of the Act, if education quality is inadequate, we will still graduate young people who are unemployed and unable to even pay back their loans, thus congesting the labor market. This is happening against the backdrop of Nigeria’s GDP per capita falling well short of that of comparable emerging markets like China and South Africa. Although it’s a good start, having access to student loans is just one step in the process.
