Student Loan Scheme: A New Perspective to Nation Building?

By Joshua Odidi

In 2016, the former Speaker of the House of Representatives, Femi Gbajabiamila, introduced a bill to address the funding gaps in Nigeria’s tertiary education subsector. He played a critical role in resolving the faceoff between the Academic Staff Union of Universities (ASUU) and the Federal Government in the previous administration. Hence, he was determined to sponsor the bill. 

On June 12, 2023, President Tinubu took a bold step by signing the Student Loans (Access to Higher Education) Act, 2023, which aims to raise Nigeria’s tertiary education rate by providing interest-free loans to qualified Nigerians seeking higher education. This act was the fulfillment of the President’s campaign promise to provide students with accessible education for all; especially to students who are unable to afford fees for their education.  

After the announcement made by Dele Alake, a former senior aide to the President, students responded with overwhelming feedback. However, education stakeholders had mixed feelings of hope and doubt regarding the announcement’s feasibility, implementation, and timeline. This post will focus on the crucial question of how and when this act will be implemented. 

A Spotlight on the Students Loan Act 

The Nigerian government’s “Students Loans (Access to Higher Education) Act, 2023”, makes the loan available to all students in tertiary institutions, whether in public or private universities. However, access to the loan is not automatic as it is granted only to those students who meet certain stringent criteria.  

Loan Criteria 

These criteria include  

• Providing at least two guarantors who must be civil servants with a minimum of twelve years in service 
• The applicant’s income or family income being less than five hundred thousand Naira per annum.  
• The repayment plan starts two years after the National Youth Service Corps (NYSC) program. As the saying goes, nothing is free, even in Freetown. 

Although many believe that the proper implementation of this law can bring about positive change and will be a significant step towards tackling the challenges faced by Nigeria’s tertiary education subsector, the Academic Staff Union of Universities (ASUU) opposed the idea of student loans. They argued that tuition isn’t charged in unity schools, making the act discriminatory. Professor Olusiji Sowande, the ASUU National Treasurer, stated that students only pay sundry fees to cover the cost of accommodation, ICT, power, and other expenses. Instead of student loans, the ASUU National Chairman, Emmanuel Osodeke, suggested that the Federal Government should provide grants to institutions and students. He believes that student loans are a scheme to benefit a few individuals who own private universities in the country. 

According to Adda247, South Korea has the highest education rate of 69.29%. Observing global best practices, South Korea did not achieve this through empty promises and signatures. Instead, they established a comprehensive and competitive education system that motivated students to study and contribute to the country’s economy. As a result, South Korea was ranked among the top ten most innovative countries in the developed world by a 2017 Bloomberg report. Nigeria can follow in South Korea’s footsteps by taking bold steps to invest in students’ education. 

In addressing the proposed Students Loan Act in Nigeria, it is crucial to recognize that while the government aims to provide financial support for tertiary education, the existing challenges faced by students primarily revolve around the lack of quality learning environments and the uncertainty of securing well-paying jobs post-graduation. Therefore, the focus should be on enhancing educational infrastructure and facilitating employment opportunities. 

To ensure the success of this initiative, the government must implement a sophisticated monitoring system to prevent fraudulent activities, manipulations in the loan application process, and acts of corruption. Additionally, it is imperative that the loan system is designed to cater to the specific needs of students, discouraging unnecessary borrowing and promoting responsible financial decision-making. 

Moreover, the government should adopt an inclusive approach, making this initiative universally applicable, including the requirement for all beneficiaries, regardless of socioeconomic status, to repay the loan upon graduation. This will not only promote equality but also ensure sustainability and accountability within the program. Ultimately, prioritizing improvements in educational and employment conditions will address the root issues faced by students, making the Students Loan Act more effective and aligned with the genuine needs of the youth in Nigeria. 

Conclusion 

In conclusion, the implementation of a student loan scheme has the potential to revolutionize education in Nigeria and diminish the prevalent trend of young Nigerians seeking opportunities abroad – aka “Japa Syndrome”. To achieve this, the government should prioritize substantial investments in the education sector, ensure measures to curb corruption are being adhered to, and support education initiatives across all educational levels. 

Furthermore, transparency and accountability are vital in ensuring the success of, and public trust in this initiative. The federal government should commit to making its records on the student loan scheme accessible to the public. Leveraging the efficiency of the Treasury Single Account (TSA) system can play a pivotal role in maintaining the financial integrity of the program. By fostering transparency, accountability, and bolstering educational support, the Nigerian government can pave the way for a robust education system that meets global standards and curtails the urge for Nigerian youth to seek opportunities abroad.