Student loan bill: Game-changer for youths or disaster in disguise?

Recently, President Bola Ahmed Tinubu signed into law the Student Loan Bill. The initiative is geared towards providing interest-free loans to Nigerians seeking higher education through Students Loan Fund (SLF).

The bill, which was first introduced in 2016 as part of measures towards addressing the funding gaps in the country’s tertiary education, was sponsored by Femi Gbajabiamila, the immediate-past speaker of the house of representatives and newly appointed chief-of-staff.

The establishment of an education bank as aided by the bill will provide students of Tertiary institutions with loans starting September, 2023 with repayments to begin after graduation as promised by the president in his manifesto prior the election.

“We will institute a pilot student loan regime…this will expand access to education to all Nigerians regardless of their backgrounds,” he had written in his manifesto titled ‘Renewed Hope’.

“At the same time, this will give institutions the ability to charge more cost-reflective tuition fees. Because of the current employment rates and other conditions, the loan program will have a maximum limit any student may borrow and must have flexible repayment provisions.”

Poor funding has been an issue that public tertiary institutions have been struggling with. The frequent strikes by the Academic Staff Union of Universities (ASUU) strikes are of that problem.

The budget for education in 2022/2023 was N1.18 and N1.79 trillion respectively which falls below the annual education budget standard set by UNESCO for developing nations.

In a bid to provide easy access to education, students in public tertiary institutions enjoy the privilege of paying educational service fees as low as N20,000 without the inclusion of tuition compared.

However, in 2022/2023, these students have awakened to school fees spike trend with claims of the money being used to fund the schools, as the institutions could no longer rely on government funding.

The University of Nigeria, Nsukka, University of Abuja, University of Uyo, Federal University of Lafia, Michael Okpara University of Agriculture, Federal University, Dutse, and University of Maiduguri (UNIMAID) are some of the institutions that have made an 100 -200% tuition increase between 2022 and 2023.

MIXED REACTIONS

Some are of the opinion that the loan bil would help students in tertiary institutions address their financial challenges.

But others argued that the initiative might be affected by corruption considering the experience of other similar interventions in the past.

Speaking with CrispNG on the bill, Professor Leo Ukpong; an economist, said the country’s previous “records of corruption and debt mismanagement in projects like this might still surface in this case”.

He said: “Given our poor record of managing debt and the corruption involved in such schemes, I am afraid this might just add up to our national debt; and possibly end up enriching the designated lenders”.

On his part, Emmanuel Osodeke, national president of the Academic Staff Union of Universities (ASUU), said the bill is “just a surface sscratching” intervention.

Osodeke said the bill will lead to other unfavourable decisions, adding that it might have adverse effect on prospective students who depend on admission into tuition-free higher institutions as their of chance of accessing higher learning.

He said: “Every Nigerian should know what is going to happen next and there may likely be another bill waiting for signature that will introduce tuition fees. If the bill indicated that the loan is to pay tuition fees and there are no tuition fees in Nigerian universities, then what is your next approach?”

In the same vein, Prof. Ben Ugwoke of University of Abuja said the bill does not address the tuition-free policy in public institutions.

He said: ”Let me hazard a guess that the new act has laid a formal basis for the various governing organs of the public institutions in Nigeria to levy higher charges on students…To the naive, it means relief but to my mind, I think it means higher charges are on the horizon for students.

“It is pertinent to note that this bill is coming at a time when millions of student loan beneficiaries in the US have been said to be owing the government. Biden’s student loan forgiveness program announced August last aimed at providing debt relief to 40 million student loan debtors, with 16 million debt cancellation applications approved, however this move has been challenged in the US Supreme court as some Republicans believe that it will lead to an increase in tuition.”