The travesty that surrounds the student loan Act as signed by President Bola Ahmed Tinubu on Monday, June 12, 2023, is such that has left many confused about what the piece of legislation stands to offer Nigerians.
The Act which is a brain-child of Femi Gbajabiamila, the immediate past speaker of the House of Representatives, now the chief of staff to the president was said to enable Nigerian students to have access to interest-free loans.
Consequently, many stakeholders such as the National Association of Nigerian Students (NANS) have in their wisdom poured encomium on the president for signing the bill.
One would think going by this that the Act can solve the age-long problem of lack of access to education that has plagued the country for years.
On the contrary, it is either that these people are ignorant of the real consequences or that they are against the well-being of the poor masses.
The Act can best be described as the work of con artists whose goal is to hoodwink the mass of Nigerian people into thinking that the student loan expands access to higher education whereas what it does is to shut the door more firmly against the majority of Nigerians seeking higher education.
According to Hassan Soweto, a national executive council member of the Democratic Socialist Movement (DSM), “The student loan Act is a fraudulent contrivance by elements who have no interest of the poor and indigent at heart, and whose only real achievements would be an increase in the cost of education through the introduction of tuition fee and subjection of loan beneficiaries to life-long indebtedness and misery.
If truly the Tinubu government wants to help poor and indigent students who are in millions, then it would recover trillions of naira being stolen legally and illegally from public coffers by big businesses and politicians in order to ensure that there is adequate government funding for public education.”
The Act defined for itself the following aim and objective; ‘to provide easy access to higher education for indigent Nigerians through interest-free loans from the Nigerian Education Loan Fund established in the Act with a view to providing education for all Nigerians, and for related matters.’
However, a clause-by-clause analysis of the Act shows the following;
The student loan Act takes care of only tuition fee
The student loan Act only takes care of tuition fees which is a fraction of the total payable fees by students in tertiary institutions.
Buttressing this point, Gideon Adeyeni, coordinating collective member at Africans Rising, the Obafemi Awolowo University (OAU), stressed that section 13 of the Act states that the fund shall be to “facilitate the mobilisation of funds to provide interest-free loans to students of institutions of higher learning in Nigeria for the payment of tuition fee”.
“By virtue of the Act, an indigent student is encouraged to obtain a loan from the Education Bank to pay tuition fees. Now, since the prospective loan beneficiaries are indigent, how will they pay the sundry fees which in many tertiary institutions run into tens of thousands of naira?
If a student pays tuition fees through the loan but has no money to pay for other fees such as acceptance fees, development levy, and library fees, among others; will such a student be able to attend lectures, sit for tests, examinations, and graduate? he asked.
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The qualification criteria are choking
The high qualification criteria for the loan mean that only a tiny fraction of indigent students can qualify for it. Section 14, subsection (b) of the student loan Act stipulates that students applying for the loan must satisfy the following: “Applicant income or family income must be less than N500,000 per annum”.
This section of the Act depicts the scheme as an unreasonable, unrealistic, and absurd contrivance.
Adeyeni reflecting on this, said: “It is as if the drafters of this legislation are living on the moon.”
By virtue of the minimum wage Act 2019, the lowest-paid worker in Nigeria is meant to earn nothing less than N30,000 per month. In a year this will sum up to N42,000.
Going by this wage Act, the lowest family income of two parents should be nothing less than N60,000 per month, which amounts to N720,000 in a year.
What this means is that the children of the lowest-paid worker will not be able to access the loan. And if the lowest-paid worker does not qualify as poor in the wisdom of the drafters of this legislation, then who exactly is poor in Nigeria?
According to the National Bureau of Statistics (NBS), 133 million Nigerians are living in multidimensional poverty. Even a worker that earns N100,000 a month is poor considering the rate of inflation in the country.
In the face of all these, the Act did not really guarantee the availability of the fund. Section 16 subsection (4) of the Act clearly states that “disbursement will only be on the availability of funds”.
This simply suggests that indigent students may have to wait endlessly for months and years with the likely consequence that they lose their admission or are forced to drop out.
Invariably, going by the usual corruptible tendencies in the country’s ministries, and parastatals the scheme mean give indigent students access to education would be a clog to their academic wheels.
The loan repayment scheme is unrealistic
To further buttress this, is the loan’s repayment structure, which is seen by many as liable to subject beneficiaries to depression and eventual suicide if allowed to fly.
Section 18 (1) of the Act says that “Any beneficiary of the loan to which this Act refers shall commence repayment two years after completion of the National Youth Service Corps (NYSC) programme.”
This means that it does not matter whether or not the beneficiaries have succeeded in getting jobs or not, they must start paying. What is meant to protect the poor is obviously exposing them to early death.
Or how best can one reconcile this, in a country where the unemployment rate is at least 40 percent for the general population and 53.6 percent among the youths?
Besides, research has shown that the majority of graduates seldom get employed within the first two years after graduation. How does the government expect unemployed beneficiaries to begin repayment?
Moreover, the Act’s section 18, subsection (6) says that beneficiaries that default on the loan shall be “liable on conviction to a fine of N500,000 or imprisonment for a term of two years or both.”
The fear here is that this could be a window for oppression and extortion by the law enforcement agents and other bodies involved in executing the Act.
After all, this is not the first time students loan is introduced in Nigeria. In the 1970s, the federal military government promulgated the Nigerian Students’ Loan Board decree to provide funding to Nigerian students based on loans repayable 20 years after graduation, but the idea collapsed due to massive indebtedness.
Charles Onwunali, a senior lecturer at the University of Lagos (UNILAG) insists that the country does not have a system in place to monitor the disbursement and repayment of the loan.
“They want to use it to increase school fees. We don’t have the system to monitor it. Even in advanced countries students still default in payment of the loan, talk-less in Nigeria where the system is porous,” he noted.
Presently the US government is coming to the end of a student loan repayment freeze since early 2020 because a lot of people could not afford to get gainful employment.
In Britain, graduating students legally face 40 years of debt repayments.
Achike Chude, deputy chairman of Joint Action Front believes that Nigeria does not necessarily need a student loan Act but a well-tailored scheme to fund education in the country.
“The government should fund public education adequately, ensure democratic management of allocation and finance of all institutions,” he said.
Chude, aligning his views with the Education Rights Campaign (ERC) demands that the student loan should be turned into a grant to support the expenses of students in public tertiary institutions whose cost of living has risen astronomically due to the fuel subsidy removal.
Simply logic suggests that the government ought to focus more on funding public tertiary education adequately, and ensuring that the staff are well taken care of.
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