BRIEF ON THE STUDENTS LOANS (ACCESS TO
HIGHER EDUCATION) (REPEAL AND RE-ENACTMENT) BILL, 2024 (EXECUTIVE BILL BEFORE THE NATIONAL ASSEMBLY ON MARCH 14, 2024)
1. BACKGROUND
The Student Loan (Access to Higher Education) Act 2023 was signed into
law by President Bola Ahmed Tinubu GCFR on 12th June 2023.
The Act established the Nigerian Education Loan Fund (NELFUND) to supervise, coordinate, administer and monitor the management of
student loans in Nigeria.
The administration of the Fund was vested in a Special Committee, with
the Governor of the Central Bank of Nigeria (CBN) as the Chairman. The Governor implements the committee’s executive decisions and appoints a Secretary to assist.
The Federal Government has taken action to implement the legislation, including providing over N200b to the Fund through appropriations and presidential directives. However, efforts to operationalise the NELFUND and implement the Students Tertiary Education Loan Scheme have been hampered by problems with some provisions of the Act.
Hence, the proposed amendments in the Students Loans (Access to Higher Education) (Repeal and Re-Enactment) Bill 2024 were presented to the National Assembly by President Bola Ahmed Tinubu GCFR on Thursday, 14th March 2024.
2. CHALLENGES WITH THE EXISTING ACT – Student Loan (Access to
Higher Education) Act 2023
Some of the challenges with provisions of the Act affecting
implementation include –
a. Governance and management.
• The Act imposes on the Governor of the CBN management and
executive responsibilities outside the core mandate of the CBN, which should be the Governor’s focus.
• Additionally, responsibility and accountability for the Fund’s day- to-day management are not adequately provisioned in the Act.
b. Purpose of the Loans.
• Under the current legislation, students can only apply for loans to pay tuition fees. Federal tertiary institutions don’t charge tuition
fees. However, students must pay other institutional charges.
• Under the current Act, students would not be able to apply to the Fund for loans to cover those other institutional charges or their other upkeep costs, thus defeating the purpose of the loan, which is to ease access to tertiary education for young Nigerians.
c. Eligibility Criteria for Applicants.
• The current Act allows only applicants with a combined family income of less than N500,000 per annum to apply. Under this provision, the child of a person who earns N45,000 a month is
disqualified from applying for this loan.
• The Act also requires that applicants provide two guarantors who shall be a civil servant of level 12 and above, a lawyer with ten years
post-call experience, a judicial officer, or a justice of the peace. This is a high bar that would have disqualified many more of the people
who need these loans from applying.
• The Act disqualifies the children of parents who have defaulted on any loans previously from applying for the student loans.
d. Method of Application
• The application method provided for in the Act is entirely manual. However, the application, identity verification, and disbursement should ideally rely on technology tools to ensure that data such as NIN and BVN can be integrated into the process to prevent fraud, enhance efficiency, and guarantee transparency.
e. Repayment provisions.
• The Act criminalises failure to repay loans obtained from the Fund without consideration for circumstances, including unemployment, death, or disability, that may affect an individual’s
ability to pay.
f. Recovery of Loans.
• Under the Act, the Nigerian Education Loan Fund is not a body corporate. This creates potential problems around the Fund’s
ability to enter contracts, including loan agreements with applicants, or to initiate enforcement actions to recover loans from
beneficiaries.
3. CHANGES UNDER THE PROPOSED BILL – Students Loans (Access to Higher Education) (Repeal and Re-Enactment) Bill 2024……(1)