Student loan scheme may increase access to tertiary education, improve poor skills gap

A students’ loan scheme may empower financially disadvantaged students, narrow the widening skills gap and check rising social inequality, stakeholders say.

As an emerging economy, Nigeria is at a crossroads, to either take a long leap forward or lag, while each direction may depend on human capital development strategies deployed, they add.

According to the global competitiveness index report, 2014-15, overall, Libya ranks 126, Nigeria 127 and Mali 128. Nigeria sits between two countries going through political, social and economic crises. Switzerland ranks 1, Singapore 2, Chad 143 and Guinea 144. Competitiveness on this index represents the set of institutions, policies, and factors that determine the level of productivity of a country.

Justice Ngwama, a lecturer of Industrial Relations and Personnel Management at Crawford University contends that “Malaysia’s apparent huge industrial and developmental leap, springs from the effect of a synergy between institutions of higher learning and industry, collaboration between town and gown. “To achieve any significant transformation in Nigeria, the chasm between academics and industry practitioners must be bridged. This means elevated conversations, which in turn entails higher intellectual development.”

Analysts say massive access to tertiary education is necessary to transform Nigeria from a commodities based economy to a predominantly knowledge-based economy.They observe though, that this may be tough to achieve, given that about 67 percent of Nigerians live below the poverty line, or on less than $2 a day.

The need for a “decisive diversification of the economy becomes even more apparent when we consider the yearning needs of the populace for new jobs and/or welfare packages that will help drag significant numbers of them up from below the poverty line” Atedo Peterside, chairman StanbicIBTC Holdings PLC, said, during the 2016 Standard Bank West Africa Investors’ Conference.

“My parents are not interested in schooling. They believe it is a waste of time and resources. They do not see any reason why they should send me to school. I barely sailed through my National Diploma (ND), selling odds and ends to pay my school fees. I just arrived here in Ajegunle to hustle and save some money for my Higher National Diploma,recounted 20 year old, bar attendant, Isioma Izuegbu.

Izuegbu further said, “It is challenging to put money aside, because I am the first born and need to take care of my younger siblings. I do my best to wear a smile and please customers, but my situation is pathetic. My parents’ resources are meagre, we scarcely eat nutritious meals.

“I believe one day, this will become part of my testimony. I haven’t collected my WAEC results because I don’t have N10,000 the school authority requests”, she further stated .

Rather than hand out welfare packages, human capital development is a much more sustainable path. Students’ loan scheme may offer a leeway to increase access to higher education institutions and grow human capital capabilities analysts, say.

Students’ loan is a noble concept, “but I wonder how it will be made to work. Check the records and you will be astounded at the default and abysmal repayment rates of the National Directorate of Employment (NDE) and the Small Medium Enterprise Development Agency of Nigeria (SMEDAN) loans, designed to create and grow businesses.

“Besides, the means of repaying the students’ loan is contingent on getting a job after school. The prospects do not look good. Nigeria is a tough terrain” contended Francis Anyim, a lecturer at the department of Finance, University of Lagos.

“The National Orientation Agency has a lot of work to do. It is a systemic error. We need to fashion a national vision, like a Nigerian Dream that drives national development policies. Otherwise, the chance of such a scheme surviving is negligible. It comes to the whole problem of credit systems, there is none in Nigeria.

“A broader conceptualisation is needed to include a social security system. You see, without a national re-orientation and re-evaluation of our national value system, this will not work” explained Ngwama.

A source at Sterling Bank highlighted that it is workable, and that he would raise the question at their corporate headquarters. Among other things “we will need to do our due diligence, do our cost/benefit analysis and assess the risks. We will need a strong guarantor system to be put in place and develop a tracking mechanism to recover the loan. Like every other kind of loan, recovery mechanism is critical. Financial institutions are not charity organisations.”

Stephen Onyekwelu