In Tinubu’s “hit the ground running” zestful mantra, he passed the Access to Higher Education Act, 2023, also known as the Students’ Loan Act into law in June with the aim of granting interest-free education loans to indigent or low-income Nigerians seeking tertiary education.
To say we were expecting him to sign it so soon would be an understatement even though he had made the pledge in his acceptance speech on March 1. Hence, the Students’ Loan Act’s crystallization does appear to be a laudable initiative. However, the Act itself seems like a somewhat incomplete work, something quite rushed and not properly premised in certain areas. Since its signing in law, relevant stakeholders have raised the alarm over the missing pieces and functionality of the Act, basically describing it as a clear case of “putting the cart before the horse.”
Some stakeholders in the education sector see the swift move as a potential premise for charging tuition fees in federal public universities and other higher institutions. Charging tuition fees is a sentiment that has been echoed by the Committee of Vice Chancellors of Nigerian Universities. And if public universities are granted full autonomy, they’ll charge tuition fees eventually. But that’s another kettle of fish.
The Academic Staff Union of Universities’ national president Prof. Emmanuel Osodeke called on President Bola Tinubu to change the loan to a grant for indigent students, insisting that the loan is impracticable and unsustainable.
Osodeke held that the conditions for the loan are not practicable, adding that more than 90% of students won’t meet the stringent requirements to access and repay the loan. Osodeke’s two cents, in some aspects of the requirements being stringent, is quite true. In fact, those requirements must be reviewed if the government truly wants the indigent to access student loans.
For starters, Section 14 (b) of the Act which deals with the requirements for obtaining the loan is bothersome. It reads that the applicant’s income or family income must be less than N500,000 per annum. Going by the national minimum wage which is N30,000, we can infer that if both parents earn that amount, then the total income of both parents monthly is N60,000. This means the family earns N720,000 annually, an amount that exceeds the threshold stated in the Act.
The Act needs to reflect present economic realities and predict future improvement in standards of living. Whenever the minimum wage is reviewed for an increase, most students would be ineligible to apply for a loan because they would no longer qualify resulting from the minimum wage increment.
Additionally, there are many families who earn N500,000 annually but struggle to or cannot pay the school fees of their children. For instance, a family whose income is over N500,000 annually with three children in school won’t, unfortunately, qualify for the loan. Just because a family earns over N500,000 annually doesn’t mean that they can handle paying school fees for all four children.
It is advisable that the financial threshold be reasonably increased from applicants or families earning less than N500,000 annually to those earning less than N720,000 annually as the N500,000 annual income ceiling on the student or family’s income is regrettably low.
Section 14(c) goes on to say that applicants must provide at least two guarantors, and each of the guarantors shall be a civil servant of at least level 12 in the service, a lawyer with at least 10 years post-call experience, a judicial officer, or a justice of the peace.
The federal government should ask itself where and how would an indigent student get speedy access or access at all to at least two guarantors, each of whom must either be a civil servant of at least Level 12, a lawyer with at least 10 years post-call experience, or a judicial officer, or a justice of peace. It is not just feasible in a country where getting access to civil servants is not a walk in the park. For physically challenged people, there might not be any of the above who’d want to be a guarantor to them. They are the least likely to get jobs or good high paying jobs after graduation due to discrimination.
It is either they review the guidelines for application or they provide a list of those guarantors for students to access as they apply for the loan. If the government provides a list of civil servants, lawyers, judicial officers or justices of peace on a website with their full information, then it’d be easy for students to reach out to them, schedule a meeting and get the documents signed.
This, however, could lead to corruption on the part of the guarantors. What If a level 12 civil servant asks for money to sign the document? This is definitely not impossible in a country where students sometimes pay non-academic staff to get their documents signed. There are potential pockets of corruption abound here and the act must look into sealing such pockets.
The Act is also not broad enough for those who are physically challenged. Section 18 states that the beneficiary of the loan will commence repayment two years after completion of the National Youth Service Corps, NYSC programme. Getting a job right after NYSC or the fund to set up a business is harder for a physically challenged person in Nigeria than an able-bodied person. Employment options are limited and even more limited for physically challenged people in Nigeria. it would be difficult for them to repay it and this means they will likely not take the loan.
Many physically challenged people in Nigeria are dead poor. There’s no sugarcoating it. The physically challenged cannot make much money, and the parents of those who are physically challenged often cannot make enough to get by. It is so bad that 9 out of 10 people with disabilities in Nigeria live below the poverty line of $1.90 a day.
On the other hand, how would the loan repayment work when a student who is now working unfortunately gets into an accident and becomes physically disabled and as a result, cannot pay back the loan? What if he or she suddenly gets diagnosed with a terrible illness? I’m not a negative person, but we must be broad-minded and realistic about how the loan act should work so it doesn’t leave out some life-changing aspects that could happen to anybody. In the United Kingdom, student loans may be cancelled for people who can no longer work because of illness or disability. What would the federal government do in this case or how would the government handle it? It’s not stated at all.
Moreover, the government seems to have forgotten or is playing ignorant to the fact that the unemployment rate has been increasing for over a decade. Global audit and tax advisory firm, KPMG, projected that Nigeria’s unemployment rate is expected to rise to 40.6% in 2023 as compared to 2022’s 37.7%. Quite gloomy, isn’t it? But what’s even more distressing is that 4 to 5 million new entrants enter the Nigerian job market annually.
In fact, the World Bank disclosed, in 2022, that 80 million working-age Nigerians will not have a full-time job by 2030 if we don’t improve its employment rate. It further stated that 23 million more Nigerians would live in extreme poverty by 2030 if the nation’s poverty rate doesn’t fall.
Today, an average Nigerian graduate earns between N30,000 and N50,000 monthly for working like a bee in organizations. Mind you, this is barely a fraction of what it takes for them to survive and some graduates do not get a job for as long as 4 years after completing NYSC. As the government hopes to dish out loans to hundreds of thousands of students, it must ensure that there are enough high-paying jobs out there to provide them with the means to pay back the loans. We need workable bills and policies that will significantly reduce the growing rate of unemployment in the country.
With the way things are, it is unfortunately expected that many students will default on their loans; does this mean our cells would be brimming with defaulters according to section 18(6) of the act which states that individuals who default on the loan or aid in such default commits an offense and upon conviction, the defaulter is liable to a fine of N500,000 or imprisonment for a term of two years or both?
This raises questions about the extent to which the collections system and the penalties the act imposes would even promote successful repayment from students after schooling. While section 18(6) is a deterrent, would it work out well in the face of myriad challenges facing an average Nigerian once he/she is out of school including a shrinking job force? Let’s not forget that these people are indigent. The government ought to make provisions for loan debt cancellation or extended payment periods for the physically challenged.
In advanced countries, students still default in payment of their loans, let alone in Nigeria, where the system is full of loopholes and physically challenged students are one of the most vulnerable sections. In the United States, the Education Data Initiative found that 1 in 10 Americans has defaulted on a student loan and 5% of all student loan debt is in default.
Recently, the US Supreme Court blocked President Joe Biden’s student loan debt relief plan, saying his administration lacked authorization under the HEROES Act to forgive up to $20,000 in student debt per borrower. The relief plan was meant to erase up to $10,000 per individual borrower earning less than $125,000 annually or per married couple earning less than $250,000, and up to $20,000 for those who received a need-based Pell Grant while in college. Across the United States, 43.6 million people owe $1.6 trillion for federal loans taken out for college, more than they owe on car loans, credit cards or any consumer debt other than mortgages. All 43.6 million people would have been eligible to participate in the debt relief plan.
In 2016, the Institute for Fiscal Studies reported that only 17% of United Kingdom graduates earn enough over 30 years to pay back their student loans in full. The government ends up writing off more than 50% of student loans in part or in full. Of course, there are certain conditions to be met before loans can be written off based on any of the five student loan plans. Although student loans in the United States and the United Kingdom have interests and ours don’t, how exactly can an indigent defaulter get N500,000? It’s a question that sits on the minds of many including mine.
Furthermore, in section 7(2) of the Act, the Committee in charge of the fund consists of 11 people, with the last 3 being representatives of the Nigeria Labour Congress (NLC) and the Nigerian Bar Association (NBA) and the Academic Staff Union of Universities (ASUU). However, there is no one representing the students for whom the loans are.
It doesn’t sit well with me that the Act excludes the National Association of Nigerian Students. They are a key element in the student loan initiative. Why exactly is the Joint National Association of Persons With Disabilities (JONAPWD), an umbrella organization of persons with disabilities established in Nigeria to promote the rights and development of Nigerians with disabilities, not part of the committee? If the committee which is responsible for the performance of the functions of the fund doesn’t have representatives of NANS and one of the most underrepresented people in Nigeria, JONAPWD, then how can this performance be comprehensive?
In the United Kingdom, the Students Loan Company, SLC, the body in charge of student loans, has the Disabled Students Stakeholders Group (DSSG) as a stakeholder that advises and supports the provision of specialist support to disabled students. Under this group, you’ll also find the National Association of Disability Practitioners and the Association of Dyslexia Specialists in Higher Education as members.
There are many clamouring for the Loan Act to be open to all Nigerians irrespective of financial background and type of institution, and while that would be great, it is best to keep the loan accessible to public institutions for now. As time goes on and the system is perfected, it should be open to all students. This is a safe transition because we have learnt the hard way that government initiatives in Nigeria don’t often work seamlessly.
Albeit the Federal Government is quite energetic towards working out modalities so as to commence student loans in September 2023, it is rightly critical to call upon the president to review the loan act with proper stakeholders and the National Assembly in order to arrive at a mutually beneficial process that makes education accessible to all in public universities and beyond. The Act is the beginning of a progressive track for Nigeria and Nigerians, but the process must be meticulously perfected and the government must look for more ways to save our education system on all fronts. The government must not be dubious and increase school fees or officially introduce tuition fees in public tertiary institutions, using the Act as a footstool.
Salako is a journalist and editorial assistant at UK–based Divinations Magazine. He can be reached on Twitter @i_amseawater and email: firstname.lastname@example.org.