What Tinubu’s Student Loan Act Mean For The Nigerian Students




President Tinubu, in a bid to expand access to higher education and reduce financial burdens on students, has signed the Student Loan Bill into law.


Let's go back in time…


History has it that  the former head of state, Yakubu Gowon, introduced federal student loans in the 1970s. However, it had a payment period of 20 years. 

This decree provided money to students for their tuition, dues, and other costs that had been authorised by their schools. A few years later, the government started to push for "cost-reflective tuition," which culminated in the 1978 Ali Must Go protest in opposition to higher tuition. The current president's administration is following the same ‘cost-reflective’ path as stated in the party’s manifesto.


Where Will The Fund Come From?


As you may already be aware, the Act suggests that 1% of revenue from the Nigerian Customs Service (NCS), Nigeria Immigration Service (NIS), Federal Inland Revenue Service (FIRS), and 1% of profits from oil and mineral sales go to the Nigerian Education Loan Fund, a new fund housed by the Central Bank of Nigeria (CBN) to manage the operation.


The fund should start out with about N200 billion, and it should grow over time based on the historical annual revenue of these agencies. If this were based on the 2021 figure, FIRS would have contributed N101 billion, or 1% of its annual revenue, to the fund. The list goes on: NNPC will cough up N6.74 billion, Customs would have given N22.4 billion, etc.


The money will appear. In fact, the fund can support two million students (at N100,000 per year) with over N200 billion in annual revenue from these agencies.


What Are The Requirements?


The Act stipulates that you need two guarantors—a civil servant with 12 or more years of service and a lawyer with at least 10 years post-call—and that your family's annual income must be less than N500,000. Others believe it to be a lot, while others believe it to be simple. "My tuition is only 21,000, why do I need my entire village to know I want to take a N21,000 loan?" I've heard people say.


Are Private Universities Involved?

At the moment, federal and state government-established Universities, Polytechnics, Colleges of Education, and Vocational Schools are covered by the loans. That means, private universities are excluded.

Private universities ought to be included, in my opinion, but it's perhaps too early in the day to make that request. Imagine how happy private university students would be to receive interest-free loans since many of them already borrow money to pay their tuition.


How About Repayment Plan?


The Act mandates that borrowers of student loans in Nigeria begin making payments two years after completing the National Youth Service Corps (NYSC). The PAYE method of deducting funds at the source is how the education loan fund is required to work with the student and their employers.


Would There Be A Jail Term If I Am Unable To Pay Back?


The Act makes no mention of Nigerians who are jobless two years after completing NYSC, but it mandates a two-year prison sentence for loan defaulters. Will I be regarded as a defaulter if, after two years, I still haven't found employment?


Will my unemployment land me in jail? The guidelines for implementation need to be clear on this even though the answers are probably no.


So, What Does This Mean For Students?


In conclusion, the Loan Act ensures that the cost of tuition won't be a reason for Nigerian students to forgo a higher education.


For context, the US federal student loan program increased from $0 to $1.7 trillion over 64 years. We have little chance of experiencing this, largely because the debt does not have compound interest. However, we must be vigilant to prevent this from happening to us.


Instead of serving as the government's first step toward higher education fees, student loans should aid the poor.












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