Amid the rising numbers of students seeking higher education admission within the surging economic crisis, many Nigerians applaud the federal government’s introduction of a student loan scheme meant to give indigent Nigerians access to tertiary education.
Stakeholders believe that massive access to tertiary education is necessary to transform Nigeria from a commodities-based based to a predominantly knowledge-based economy.
Nevertheless, some experts are worried that this noble initiative has numerous loopholes that must be addressed, taking clues from what has happened in some of its peer groups in Africa.
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Inadequate funding
Research has shown that some of the challenges of student loans in Africa, especially in Nigeria include inadequate resources, unemployment among loan beneficiaries, and corruption on the part of the administrators, among others.
Most times student loan schemes in Africa, especially Nigeria operate with lean budgets that cannot cover their operational costs and absorb the rising cost of higher education and expanded enrolments in many universities.
According to the 2024 appropriation bill, a sum of N50 billion was apportioned for the loan policy which is a far cry compared to the N90 billion allocated to hajj pilgrims.
Experts say that this singular act cast doubts on the sincerity of the government to make the scheme work.
“The decision of the government to spend 80 percent of what was approved for students’ loans on religious tours depicts misplacement of priority,” they say.
David Imhonopi, a professor of Industrial Sociology and Human Capital Development at Covenant University, Ota, sees the student loan as a noble initiative that would end up an empty talk if the government fails to do the needful.
“The policy itself is a noble one but the political will for the implementation is grossly lacking,” he said.
Stakeholders maintained that for the student loan scheme to function adequately there must be proper funding in place.
Corrupt administrators
Besides, the challenge of incompetent administrators must be addressed to avoid a repetition of past pitfalls. Corruption, mismanagement, and non-repayment kill intervention credit schemes in Nigeria.
In the 1970s, the Federal Military Government promulgated the Nigerian Students’ Loans Board Decree to provide funding to students based on loans repayable 20 years after graduation but it collapsed after a while due to massive indebtedness and corruption.
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Loan recovery
In light of loan recovery, experts say that Nigeria has lessons to learn from South Africa, Kenya, and Ghana to maximise the use of student loan schemes, which have become popular in different African countries including Rwanda and Uganda.
Stakeholders familiar with the student loan history in Nigeria say the scheme existed in the past but had to be wound up because the repayment rate was pitifully low.
“Beneficiaries evaded re-payment claiming it is part of their share of the national cake. I am not sure that this posture among our students has changed,” a stakeholder said.
Victor Usifor, a legal practitioner, disclosed that one of the major challenges before the executors of the student loan scheme is an inaccurate database, which the authorities need to address to curb corruption, and misappropriation of funds.
“In addressing possible mutilations in the student loan scheme, the government will ensure accurate and detailed information of the beneficiary and their guarantor,” he stressed.
Friday Erhabor, the director of media and strategies at Marklenez Limited urges the Nigeria Education Loan Fund (NELFund) administrators to partner with private organisations for proper tracking of loan beneficiaries.
”Government can also partner with organised private sectors, that would make it easier to track those already employed and in a position to pay back their loan,” he said.
Boye Ogundele, an educationist urges the agency concerned to emulate Ladoke Akintola University in ensuring that the student loan scheme is a success.
“What they can do to get the loan back is what some schools are doing such as Ladoke Akintola University. The school will not deprive you of writing your examination in case you cannot pay for your school fees.
“You will graduate like every other person but you will go and source for the money before you get your original certificate. No notification of the result until you pay every kobo.
“They should ensure that their parents or guardians sign as guarantors with collateral security,” he said.
Job creation
The unemployment problem is not a new phenomenon in Nigeria. However, it has assumed a greater dimension in the past few years.
Nigeria’s unemployment rate surged to 5.0 per cent in the third quarter of 2023 from 4.2 per cent in the previous quarter, according to the Labour Force Survey report.
Experts believe that one of the ways to make the scheme succeed is to create more jobs for the upcoming graduates to enable them to pay the loans within the time frame.
