The Nigerian Senate convened a plenary session two weeks ago to discuss the complexities of the anticipated Student Loan Scheme. This initiative, which is expected to benefit more than 140,000 students, has failed to kick-off despite previous assurances of a January, then early March start date.
The Federal Government first introduced student loans in 1974 under the leadership of then Head of State, Yakubu Gowon. The initiative offered a repayment term of 20 years post-graduation. Although the exact number of beneficiaries was not specified, Premium Times reported that the loans were effectively disbursed to support university students at the time.
The new student loan scheme, considered the brainchild of Chief of Staff Femi Gbajabiamila, has been met with a series of setback since the President signed the Student Loan Act into law in June 2023. These issues have raised concerns among stakeholders, particularly prospective beneficiaries who are eagerly awaiting the implementation of the scheme.
A Closer Look at the Student Loan Scheme’s Implementation Timeline
June 2023 – President Bola Tinubu signed the Student Loan Act into law, his second legislation since assuming office on May 29, highlighting imprisonment and a N500,000 fine for defaulters of the interest-free student loans. The President’s spokesperson, Dele Alake, described this legislation as the fulfillment of “a promise made during the presidential campaign” of the President.
September 2023 – The student loan bill, signed with an initial implementation timeline set for September to October 2023, experienced its first delay, pushing the launch to January 2024.
January 2024 -Despite the presidency’s best attempts, the loan program did not commence as planned in January. Instead, the President instructed the Nigeria Education Loan Fund (NELFUND), responsible for the implementation, to expand the scope of the bill to accommodate Nigerian youths seeking loans for vocational skills training. This revision led to a new projected start date in February.
February 2024 – Again, the bill encountered another setback in February. The Federal Government then announced plans to open the application portal in March 2024, enabling eligible students to apply for the loans.
Student Express Concern Over Delays and Economic Impact of Loan Schem
It would seem that the recent economic downturn in the country and the ripple effects on the purchasing power of Nigerians, particularly students, have driven more conversations about the failure of the student loan scheme to kick off.
According to Yakubu Musa, a final-year student at the University of Maiduguri, the continued postponement in the launch of the student loan scheme is making it out to be “another failed promise of the Nigerian government.”
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Yakubu explained to News Digest that the recent economic downturn in the country has made the loan a necessary survival aid for virtually all students across the country.
“These loans are supposed to help students, things are not getting easy anymore,” he said. “The cost of items is making even studying itself a tedious affair. One cannot study with an empty stomach and with the price of food items, it has affected the expenditure of the average student, which brings us back to the need for assistance from the government.”
Perhaps, what disturbs Yakubu most is the repayment plan for the loan upon completing the mandatory service year. In accordance with the terms and conditions of the interest-free loan, the student loan act states that beneficiaries must begin repayment two years after the completion of the NYSC programme.
Yakubu pointed out that the historical trends indicate that the average Nigerian graduate often struggle financially even two years after completing their service due to the high unemployment rate in the country.
The Nigerian Bureau of Statistics (NBS) released its findings a few weeks ago that Nigeria’s unemployment rate increased to 5 per cent from 4.2 per cent. In the third quarter of 2023. More recent open-sourced publications have reported that Nigeria has over 40 per cent unemployment rate.
“To really come through, the government must make sure they put in place adequate infrastructure and jobs to aid the smooth payment of these loans,” Yakubu added.
Government Cites Need for Policy Refinement, Education Advocates Call for Public Funding
The Student Loan Scheme has continued to be a subject of ongoing debate among stakeholders. Below are the latest conversations on the Student Loan Scheme.
As the launch of the loan scheme seem to be postponed for another month, Bayo Onanuga, the Special Adviser to the President on Information and Strategy, said in a statement two weeks ago that previous delays were necessary to further refine the policy.
NELFUND has also defended the postponements, citing a pressing need to get the scheme variables right before execution. “This is not a political programme where we say, ‘oh! We are just going to do it, it doesn’t matter how it works.”
However, some industry stakeholders have expressed concerns about the regulations surrounding the student loan scheme.
The Education Rights Campaign made a public appeal on National TV on March 17, urging the President to prioritize funding for public education over providing loans to students in Nigeria. Hassan Taiwo, the National Coordinator, suggested that huge wealth of the country, currently concentrated in the hands of a few individuals and multinational corporations, should be used to fund education, healthcare and job creation to ensure a decent life for all.
Niyi Sunmonu, the National President of the Congress of University Academics (CONUA), had previously expressed his views on the subject on Channels TV, saying, “The student loan is about promises; it is about pronouncements. We need to see it in action and see how it works.”
