A CRITICAL ANALYSIS OF THE STUDENTS LOAN (ACCESS TO HIGHER EDUCATION) ACT, 2019: INNOVATIONS, PROS AND PROBLEMS

By: Keulere Nabil Olarewaju
At the last hour of the democracy day, 2023, the newly sworn in president of Nigeria, President Bola Ahmed Tinubu assented to a bill sponsored to the House of Representative by the new Chief of Staff to the president and the outgoing Speaker of the Green Chambers, Hon. Femi Gbajabiamila, having passed to the normal procedure, the bill was forwarded to the former president, however, he couldn’t sign it before leaving office. Meanwhile, the new president in the interest of continuity, signed the bill into law thereby formerly known as AN ACT TO PROVIDE EASY ACCESS TO HIGHER EDUCATION FOR NIGERIANS THROUGH INTEREST FREE LOANS FROM NIGERIAN EDUCATION BANK ESTABLISHED

The Act seeks to provide easy access to higher education for Nigerians through interest free loans from a bank which shall be known as Nigerian Education Bank. In achieving its aim, lots of innovation were put in place however, in the course of this write up, vital ones will be highlighted and the pros and problems associated with the innovations shall be discussed.

INNOVATIONS

1. Establishment and Composition of the Nigerian Education Bank (hereinafter referred to as “the bank”): It creates a bank whose functions shall be to implement, supervise and monitor the purpose of this act and as well receive, approve and disburse the loan to the qualified applicants.

This bank shall have a governing board which comprises of: (1) A Chairman; who shall be a professor and a retired VC of any Nigerian University (2) The bank managing director (3) The bank secretary (4) The minister of education (5) The chairman of NUC (6) A representative of the VCs forum (7) A representative of the Provosts forum (colleges and polytechnics) (8) The Minister of finance or his representative (9) The auditor General (10) A representative of the NLC (11) A representative of the NBA (12) A representative of the ASUU

The members of the governing board is constituted by the president subject to the National Assembly. Members shall be of high integrity and shall hold office for a term of 4 years however can be re-nominated for second tenure and no more. A member shall cease to hold office when he dies, resign, unsound mind, becomes bankrupt or convicted of felony or any other offence relating to fraud or dishonest. Meanwhile, where a member cease to hold office, another person shall be appointed to fill the vacuum representing the interest of the so called who ceased to hold office and shall hold office for the remaining period of the person.

The president under the act, has the power to remove any member he feels is not worthy to be there however, the chairman can only be removed with the confirmation of the National Assembly.

2. Qualified applicants and purpose of the loan: Any one, without discrimination on the basis of sex, race, religion or whatsoever, who has secured admission into any of federal or state higher institution of learning including federal universities, state universities, federal polytechnics, state polytechnics, federal colleges of education, state colleges of education, Federal Vocational schools and state vocational schools shall have access to the loan for the purpose of paying tuition fee and nothing more.

To be qualified for the loan, the applicant’s income or family income must be lesser to ₦500,000 (five hundred thousand naira) annually and shall provide two guarantors who shall be a civil servant of at least 12 years service or a lawyer of at least 10 years post call or a Judicial officer or a justice of peace.

However, an applicant may be disqualified on the ground that he has defaulted in payment of any loan or any of his parents has defaulted in payment of any student loan granted them or is convicted for felony or any other offence relating to fraud or dishonesty or is being convicted of examination malpractice or drug relating offence.

3. Method of Application: Qualified applicants are to apply through the Students Affairs of their school, such application which shall be signed by the VC and Student Affairs must be forwarded to the bank within 30days after the closure of the school admission for the academic year. The application shall be accompanied with the applicant’s admission letter, a letter from the guarantor recommending the student for the loan and accepting liability in the instance of default, the guarantor must also submit two passports and the name of his employer, and evidence of being employed at the said time however, in case of self employment, he must tender a copy of his business as registered with CAC or any other authorized body and his banker.

Disbursement is made 30days after the application by the school and must be approved by the minister.

4. Repayment of the loan: Beneficiaries of the loan shall start repaying back after 2 years of compulsory NYSC service. The bank shall allocate a Student Loans Account for the beneficiary and 10% of the beneficiary salary shall be deducted source directly from the employer and credited to the prescribed loan account. Where the beneficiary is self employed, he shall within 60 days of assuming such status submit his business information which contains the Name, Location, registration documents if registered, bankers etc with the bank. Failure to comply with this amount to felony and if convicted shall be liable to imprisonment for 2 years or fine of ₦500,000 or both.

PROS OF THE ACT

1 Access to Education: with this law, willing average or poor background students will be able to finance their education. It will close the door “I don’t have money to sponsor myself” syndrome thereby giving chance to high literacy rate if judiciously maintained.

2 No-Interest Loan scheme and soft & reasonable repayment time schedule: The act provides that the money would be paid without any interest thereby giving room for so many students to apply and there won’t be fair of excess increment in the repayable amount. It also creates that the fund shall be repayed back starting from second year after NYSC and it’s not paid once rather 10% on monthly income

3 Incessant ASUU strike: since students will start paying tuition fee, ASUU won’t have the course or at the bearest minimum, to go on strike since a major reason for their strike is the lack of proper finance of the Universities, hence, the money paid by students if adequately utilized, will be used to finance properly, our higher institutions.

4 Access to quality education: Students will have the right to question the quality, service and support provided by their university since the now pay tuition fee. Credit hours have to be met in full, course content must be delivered to the letter, and course delivery rigorously scrutinized.

5 Easy school life: Indigent students will by this, spend the money they could gathered on other things aside from spending it on paying tuition fee thereby allowing them to use the money for something else like buying foodstuffs, materials, textbooks, laboratory materials etc

PROBLEMS WITH THE ACT

1. Power of the president to appoint and remove a member of the governing board: Appointment of members of this board should be on recommendation by appropriate bodies to the president, the president shouldn’t on his own will appoint whom he feels. Also, the power to remove a member of the board shouldn’t be absolute, the same process adopted in removing the board chairman should be used in removing other members.

2. Minimum income: In the real sense, the act doesn’t sound to yield to cries of many Nigerians. The stipulated annual ₦500,000 income seems unrealistic, there’s a need to increase the amount. The reason for this is not far fetched, approximately, the applicant or his parents needs to be receiving less than ₦45,000 monthly to be entitled to this loan, where in the real sense, even the ₦100,000 monthly is of nothing under this economy. Imagine a family of 5, where the breadwinner receives ₦100,000 monthly, how exactly will he cater for the family, especially as it’s anticipated that this act will lead to increase in tuition fee?

Also, as it’s anticipated that the minimum wage will be reviewed based on the recent directive of the president, the so called income under the act will be of no value to most Nigerians as it’s anticipated that even those collecting the minimum wage will be collecting above the so called ₦500,000 annually.

Hence, there’s a need to increase the amount or it should be provided that it will be reviewed annually based on the economic reality of the country.

3 Reviewing the sin of parents on the Children: The act also provides that children of parents who are defaulted in a loan scheme before won’t be qualified under the loan scheme, this is more of punishing the child for the sins of his parents.

4 Failure to acknowledge the Private Institutions: The act only accommodate the government owned institutions, this actually shouldn’t be so, rather, it should acknowledge all higher institutions of knowledge including the private schools. This would eradicate discrimination already created by the act itself

5 Failure to acknowledge the Private secondary school principals as Guarantor: The act ought to acknowledge the private secondary school principals, they know their students more and by this would allow them to know who in the real sense needs to be on this loan.

6 Failure to acknowledge other fee: the Act only focus on tuition fees but instead should extend same to other needs such as Housing, Meals, books, laptops and transportations in school.

CONCLUSION
The president by assenting to this bill making it an act, has dealt with part of the problems facing indigent members of society who can’t afford tuition fees in our higher institutions which hopefully will encourage high literacy rate. However, public enlightenment on the details of the said Act cannot be overemphasized and should be encouraged, especially on the benefit and gains, otherwise, the law will be like any other law that is only observed.

Finally, as anticipated, there will be increase in tuition fee however, if the resources is judiciously utilized and necessary amendment done, we hope that the act will serve the pleasure of majority of Nigerians.
God bless the Federal Republic of Nigeria!

Keulere Nabil Olarewaju is a law student of Ahmadu Bello University, he enjoys writing, researching and drafting. He could be contacted via 09058688488 (WhatsApp only) or mbamj1012@gmail.com