• Friday, February 23, 2024
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Student loan scheme is a better way of funding higher education


In the face of rising number of qualified students demanding higher education amid dwindling government revenue, Nigeria needs to review its model of funding higher education. Continued subsidisation of tuition fees is putting financial pressure on government.

It costs an average of N270,000 per annum to train a science student in some federal universities in Nigeria, while it costs about N800,000 on average per annum to train a medical student, findings show. However, most federal universities charge tuition fees of between N9,000 and N25,000. When in 2017 Adamu Adamu, minister of education, said the government was contemplating increasing tuition fees in all federal universities to about N45,000, there was public outcry and the move was shelved.

Student loan scheme, a better model of financing higher education, has been successfully used in South Africa, Kenya and Ghana, and has recently become popular in Rwanda and Uganda.

In Ghana, the student loan scheme first started without a law in 1971, was reintroduced in 1975, and later in 1989. It was first managed by Ghana Commercial Bank, then by the Social Security and National Insurance Trust, and now by Student Loan Trust Fund and is backed by an Act. The scheme charges subsidised interest rates on loans, demands for no guarantors, and loans are collected through employers.

Sources say a similar scheme existed in Nigeria in the past but was discontinued because repayment rate was pitifully low as beneficiaries claimed it was part of their share of the national cake. The onus is on government to find a creative way of enforcing repayment without fear or favour.

Besides easing the pressure on public funds, state-supported student loan scheme helps students and their families in that it enables students to study now and pay for their education later when they are in receipt of the higher salaries that generally accrue to university graduates. The present system not only imposes a heavy burden on public funds but also threatens quality of higher education and the achievement of other important goals, including the provision of basic education for all.