The Students’ Loan Bill: Prospects, Implications, and Concerns
The President, Bola Ahmed Tinubu, just signed the Students' Loan Bill into law. The Students' Loan Fund will be held and managed by the Nigerian Education Bank, a new corporate entity to be fully owned by the FGN. (The sources of the fund will be discussed later.)
According to the Act, all indigent students seeking higher education in any public tertiary institution in Nigeria shall have an equal right to access the loan without any discrimination arising from gender, religion, tribe, position, or disability. This interest-free loan will only cover school fees. The applicant's income or family income must be less than NGN 500,000 per annum.
The beneficiaries shall commence repayment two years after the completion of the National Youth Service Corps program. Repayment shall be by direct deduction of 10% of the beneficiaries’ salary at source by the employer and credited to the students’ loan account to be prescribed by the bank. A self-employed beneficiary shall remit 10% of his total profit monthly to the student loan account to be prescribed by the bank.
The Act also recommended two years imprisonment, N500,000, or both for beneficiaries who default in repayment or anyone found aiding defaulters.
This loan program is fundamental to the implementation of university autonomy. It will lead to the removal of subsidies for tertiary education. So school fees will increase significantly, and the university workforce can now be properly remunerated and equipped. Any student who cannot afford to pay the higher school fee can apply for the government student loan.?
There are still many concerns/questions that the public seeks answers to:
? It is not clear if returning students and post-graduate students can access this loan.
? The applicant's or family's income may need to be revised upward to accommodate more applicants, especially if there is a hike in school fees.
? The class of the required guarantors may exclude some applicants. It may be better to request a guarantor who has tax clearance.
? What happens to beneficiaries who are neither employed or self-employed two years after NYSC, or those who lose their job before full repayment?
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? How will the government enforce repayment for beneficiaries who leave the country before repayment commences?
? Can the minister really approve all the loans?
? What is the yearly loan limit?
? Why are students' living expenses excluded?
? What if the self-employed beneficiaries declare losses perpetually?
There will also be private sector loan alternatives for students who cannot meet the government qualification criteria and those who prefer more flexible options at a cost. eduWallet, a digital bank for education, will soon launch its student loan product. It plans to fully fund school fees and living expenses for students at any level, from K-12 to tertiary institutions. It will also fund the academic research of lecturers and students. Furthermore, it will aggregate scholarships and student gigs for additional sources of funding for their studies.
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