SPECIAL REPORT: How Tinubu’s Student Loan Policy can Work in Nigeria
By Salis Mohammed Manager and Mukhtar Ya’u Madobi
Few months ago, American students who graduated from tertiary institutions and couldn’t afford to refund their loan were seen celebrating President Joe Biden’s decision to write off their student loan debts and revisit the entire policy.
In line with his electoral promise, President Bola Ahmed Tinubu has however decided to try out such a policy in Nigeria.
The Students Loan Act, 2023
On Monday, June 12, 2023, President Tinubu signed the student loan bill into law in an attempt to make tertiary education more accessible to Nigerian youths. The interest-free loan scheme will be coordinated by a newly established body, the Nigerian Education Loan Fund. The scheme target students whose personal or family income comes to below ₦500,000 per annum.
Applicants looking to take advantage of the loan scheme would need to have guarantors in the form of two civil servants not below the rank of a director with a minimum of 12 years of experience or a lawyer with at least 10 years of post-call (to the bar) experience. While the student loan covers academic expenses like tuition and school materials, non-academic expenses such as student accommodation still fall on the shoulders of each student.
Additionally, the loan repayment will commence two years after completion of the NYSC programme, where failure to make payments could potentially lead to a two-year jail sentence and/or a ₦500,000 fine.
The bill, first introduced in 2016 by Femi Gbajabiamila, the immediate past Speaker of the House of Representatives who is now the Chief of Staff to the President, was reintroduced in 2019 and received more attention from the National Assembly in November 2022.
A beneficiary who secures employment shall remit 10% of their income to the Fund at the end of every month. For self-employed individuals, 10% of their total monthly profit shall be remitted as part of the repayment plans.
President Tinubu explained his rationale for signing the bill, saying: “We all believe that education is the greatest weapon against poverty, then we have to invest in it …”
This implies that Mr President is of the opinion that universities serve as a tool for empowering students from low-income backgrounds and increase their earning potential, thereby lifting them out of poverty. However, experts are worried that with unemployment rate of BSc graduates standing at 40%, it appears that getting a university degree is not a reliable way for Nigerian youth to attain financial freedom.
While the student loan scheme will be a welcome addition to the education system, some experts say the primary focus should have been to reform the tertiary education system to a functional level if the aim remains to improve economic viability by empowering youths with relevant skills that will make them employ themselves or be employable.
What the Students are Saying
Udeh Anebe Joseph who hails from Benue State is currently a Law student at the Nasarawa State University, NSU, Keffi, said he was very elated when he received the news that the federal government has signed a Bill into an Act that will provide interest-free loans to students in order to pursue higher education.
He commended the government for championing this initiative that will assist him and other poor citizens alike to realise their ambitions.
He however lamented the kind of strict conditions put in place before somebody would be able to access this loan. According to him, fulfilling these stringent conditions is a herculean task.
He lamented that even after graduation, jobs are not readily available for someone to be able to pay back the loan and this ultimately make them vulnerable to imprisonment in accordance with the provisions of the Act.
“The federal government always tries to frustrate Nigerian youths. For example, they are now increasing the school fees which is the reason why they introduced this so-called Students Loan Act thinking that it will cushion the effect of the tuition hikes.” Joseph complained.
He emphasised that if the government truly wants to help poor masses, rather than introducing a loan, it should instead provide a grant for the students to support their education where they will have no fear of being imprisoned after graduation.
Chibuke Joshua, a 400 Level student of Mass Communication, expressed doubt on whether young people like him who have no connection can access the loan, not to even talk of refunding it.
“The loan is good in enhancing access to tertiary education but my concern is that some of the requirements put in place before obtaining the loan are very harsh.
He enjoined the Student Union leaders to wake up to the issue of school fees hike by engaging their respective institutions managements to avoid discouraging children of the poor from accessing education.
Also, when asked about her opinion regarding the loan, Viveline Ogoni who is a female student from the same varsity, said; “I am not in support of this initiative personally because I have no assurances of getting a job after graduation in order to get a refund. So, I don’t want trouble afterwards.” Ogoni added.
Loan Conditions Should be Relaxed – Parent
While reacting to the policy, one of the parents, Dominic Ogakwu, said the Students Loan Act is a welcome development, but cited stringent conditions as the only barriers.
Therefore, he called on the federal government to ease those conditions so as to make it easy for the students to access the loan and use it in building their career.
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“I am very sure the government will consider the opinions of the masses and review these stringent conditions within the shortest time possible,” said Ogakwu.
Regarding the hike in school fees by tertiary institutions, Mr. Ogakwu blamed the development on the rise in the price of commodities and other materials needed to run the universities smoothly.
“The rising inflation has been biting very hard and this has made the cost of providing services to clients to also increase across many organisations including universities. It is unfortunate that we found ourselves in this quagmire.” Ogakwu added.
Tuition Fee Reduction is Better – Student Leader
On his part, the President of Political Science Students Association, Nasarawa State University (NSU), Keffi, Comrade Adamu Isyaku, said the student loan policy will not address the major issue troubling Nigerian students.
Criticising the conditions attached to the loan, he said it is unfair the loan must be repaid after two years even when the graduate may not have secured a job.
“The best way to assist the citizens is to reduce the tuition fee if the country is really serious because we have the resources and capacity to do so,” he noted.
Student Loans not the Way Forward – ASUU
Comrade Samuel Alu, the Academic Staff Union of Universities (ASUU) branch chair of NSU Keffi emphasised that the whole idea of student loan is not the solution to the problems of tertiary education in the country.
Just like the majority of pundits and other analysts, he faulted the conditions laid down by FG before a student could be considered eligible to get the loan.
“For example, in the event that a student is unable to repay the loan, the guarantor goes to prison and as a Nigerian looking at the current economic hardship, who will be willing to sign such a condition? There is lacuna in this policy.
“How can students at the end of their program owe FG to the tune of N5-6 million? It is unrealistic.
“In America, many students committed suicide after graduation due to inability to settle this kind of education debt.”
He noted that the leadership of ASUU had on several occasions written to FG against this policy but their pleas were not heard.
Comrade Alu stated that other countries are busy implementing the policy of free education from primary up to university level, but in Nigeria, it is unfortunate that the government is creating conditions capable of denying such fundamental rights to the poor citizens .
“They are not seeing the importance of education, but let me tell you, no country can develop above its literacy level, he added.
Government Should Provide Grant to Students – Don
Although, the initiative of the loan is good but Nigerian graduates will find it difficult to cope the repayment in the long run.
This is in accordance with the view of Professor Muhammed S. Rabiu, the Head, Department of Mass Communication at NSU Keffi.
With regards to getting approval of sureties as one of conditions for securing the loan, he said; “How many people know directors both at State or Federal level who can stand as their guarantors? Students must pay back in five years after graduation while there are no job opportunities for them and whoever fails to repay after 5 years will be jailed.”
He jokingly added that; “I hope they have enough space for Nigerian youths in the prison.”
According to him, the best way to help citizens is for the government to institute a full grant scholarship for the students or a scheme that will shoulder their responsibilities throughout their tertiary education journey.
Student Loans Good for Nigerian Youths – Human Rights Lawyer
According to a Kano-based Human Rights Lawyer, Barrister Abba Hikma, despite the stringent conditions, modalities and bureaucracies attached to the Students Loan Act, it is still a good initiative from which benefits can be derived.
“It can help students to boost their education provided they are able to meet up with the criteria,” he added.
“No matter how stringent the conditions are, it is still possible. The students should be optimistic and do their best to reap the benefits of this initiative,” Barrister Hikma added.
Last Line
It is obvious that the policy is good on paper since the intention is altruistic. But since the voice of the people is the voice of God, government should therefore amend the law and emphasize getting jobs for graduates or empowering them so the ones who are owing are able to pay, instead of threatening jobless graduates with imprisonment.
This report is produced with support from the Wole Soyinka Centre for Investigative Journalism (WSCIJ) under the Collaborative Media Engagement for Development Inclusivity and Accountability project (CMEDIA) funded by the MacArthur Foundation.
