By Emmanuel Akanji
President Bola Ahmed Tinubu’s assented to the Access to Higher Education Bill weeks into his presidency, which effectively kick-started the journey of the landmark student loan program in Nigeria. The programme has sparked conversations nationwide.
However, amidst the discourse, it’s essential to recognize President Tinubu’s unparalleled track record of delivering concrete results throughout his distinguished political career. This particular programme was one of the promises made by the president in his Renewed Hope manifesto, a promise he is bent on fulfilling.
The moment the contents of the Students Loan Act became publicly available, a lot of misconceptions arouse from various quarters. Many were borne out of pessimism and few, outright mischief.
I will highlight some of these misconceptions with the intention of correcting them with the actual facts.
Misconception 1: It will lead to reduced government funding of public tertiary institutions
Contrary to the insinuations coming from ASUU and other quarters that the of student loan program will lead to a reduction in the funding of government tertiary institutions, the scheme would instead enhance the funding available to institutions. The various funding intervention of the federal government in federal institutions for instance, would continue.
Months after signing the student loan act and after earmarking N55 billion as take-off funding for the Nigerian Education Loan Fund, President Tinubu approved the disbursement of N683,429,268 billion as the 2024 intervention fund for public tertiary schools in the country. This figure is almost double the 2023 Tetfund intervention in public tertiary institutions. So, the refrain by ASUU and others that the loan program will lead to a reduction of funding for public universities is highly unfounded.
The student loan scheme will increase student enrolment because of increase in the number of people who can now feel confident of sponsoring their education and that means more funds available to the institutions.
Misconception 2: It will plunge students to perpetual debt
There is also an unnecessary apprehension that student loans may place a big burden of debt on the shoulders of the beneficiaries amidst high level of unemployment in the country. These fears are equally unwarranted because the repayment structure of these loans are very friendly.
First and foremost, unlike in most other jurisdictions, the student loan in Nigeria has zero interest rate. After completion of national youth service for graduates of tertiary institutions, the borrower is given two years grace period to get a job or start earning income from a potential private business. The borrower is then expected to be paying 10% of his/her net income monthly to clear the loan. The repayment is in proportion to their earnings.
However, if the borrower could not secure a job after the two years post-NYSC grace period, he or she is permitted to update the Loan Board on their employment status and the repayment commencement time would be further extended. In essence, repayment of the loan starts only when the borrower starts earning. Also, since the loan is interest-free, there is no risk of the amount owed increasing like seen in countries like US, Canada, UK etc.
Misconception 3: Limited to Traditional Tertiary Education
Contrary to this misconception, the student loan program has been expanded, at the directive of President Bola Tinubu, to support various educational pathways, including vocational training and skill development programs. This inclusivity expands opportunities for a diverse range of learners beyond traditional higher education institutions. It means that those who simply want to learn vocations or acquire technical skills instead of attending regular tertiary institutions can access the loans too.
Misconception 4: Indigent and underprivileged students will not benefit from the scheme
The student loan scheme is actually meant to assist poor students who could not afford to finance their education or vocational training. Modalities have therefore been put in place to ensure that it benefits only those who are indigent. BVN of the applicant is a crucial requirement in addition to the income threshold of the parents/guardian of the applicant. This is meant to sieve out those who can afford to finance their education expenditure. Crucially, the part of the loan for payment of fees is not given to the student applicant but paid directly to his or her institution.
Misconceptions 5: The student loan scheme will lead to increase in school fees
Some people including bodies like ASUU insinuate that the student loan scheme will lead to schools drastically increasing their fees. This is an erroneous belief. The essence of the student loan scheme is not to withdraw government support to tertiary institutions, which will then force them to charge fees that are commensurate to the actual cost of providing education to the students. The scheme simply seeks to help provide funding to students who cannot afford even the current amounts charged by some institutions
It is however, noteworthy to understand that before the Students Loan programme came into existence in Nigeria, public tertiary institutions have periodically increased fees payable by students in response to inflationary pressures, so if some institutions increase their ancillary fees, it must not be misinterpreted or termed as a direct consequence of the student loan scheme.
Misconception 6: Undermining Scholarships and Grants
There is a misconception that student loans will diminish the significance of scholarships and grants. However, these forms of financial aid serve different purposes and will continue to coexist. Scholarships and grants most times are extended to highly intelligent students and in some instances highly intelligent students who may come from a very poor background.
The student loan scheme is open to every student who is poor and not necessarily the highly intelligent ones. The loan scheme is therefore more encompassing than the restrictive scholarship and grant programmes. There is no way every indigent student in Nigeria can be placed on scholarship. It is unsustainable. The student loans scheme is very sustainable as the funding overtime would be revolving basically as former beneficiaries pay back their loans. Funding sources are equally guaranteed as outlined in the Act.
If there is one thing that can be said about President Tinubu’s track record in public service over the years, it is his ability to initiate landmark programmes and deliver tangible results especially in the face of adversity and opposition due to the inability of his critics to see the larger picture. Despite the attempts from some quarters to discredit the student loan scheme even before it has commenced, President Tinubu has remained determined with his eyes focused on the greater picture. His directive to expand the student loan program to include vocational training equally demonstrates his ability to adapt and readjust his policies to evolving needs.
This expansion of the student loan program not only enhances access to education but also empowers individuals with the skills necessary to thrive in Nigeria’s dynamic job market. It reflects President Tinubu’s recognition of the importance of equipping Nigerian youth with both academic qualifications and practical skills to drive economic growth and innovation.
President Bola Ahmed Tinubu’s student loan proposal aligns with broader efforts to address the root causes of educational inequality and economic disenfranchisement. By providing financial assistance to students from diverse socio-economic backgrounds, the program promotes inclusivity and social mobility, ensuring that no aspiring learner is left behind. Most importantly, this student loan scheme is set to catalyze a transformative change and unlock opportunities for generations of Nigerian students.