Nigeria’s Student Loan: Taking Off Without a Base?

Since late last year, the launch of the student loan initiative has experienced multiple deferrals, with state authorities announcing its commencement at no fewer than three different times, with the most prospective date—as stated by its sponsor and Chief of Staff to the President, Femi Gbajabiamila

 

Now being in a few weeks’ time. In the interim, significant alterations have been made to the legislative framework of the scheme under the Students Loans (Access to Higher Education) Act, 2023. For instance, President Tinubu has gone ahead to instruct the Nigeria Education Loan Fund (NELFUND) management to broaden the scheme’s coverage to accommodate students interested in skill development programmes.

The stringent eligibility criteria initially required by the Act for
student loan applicants, which includes securing two guarantors of
notable professional standing, and falling under a specific income
threshold, have also been relaxed, according to media reports.
Previously, the Act mandated potential loan beneficiaries to supply at
least two guarantors in the form of civil servants at or above grade 12,
lawyers with a decade of post-call experience, judicial officers or
justices of peace. This raised concerns about how the criterion may
exclude many deserving indigent applicants due to their lack of
extensive social networks or high-status connections. Now according to
the statements by the NELFUND, these requirements have been reviewed
such that the entirety of the process will be technologically driven
with applicants only required to upload their details on a dedicated
website.

If nothing, these delays and adjustments underscore the complex task of
melding the policy into a viable framework, amid considerable doubts
expressed about its workability by stakeholders in the education sector.
Regrettably, the process of the student loan policy amendment has been
so far shrouded in secrecy with information regarding the specifics of
the revised policy limited to sporadic media reports citing statements
from legislators, the presidency, and the NELFUND management.

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For the record, it is imperative to note the House of Representatives’
(HOR) response to public criticism of the flawed student loan policy
framework. Reactions to the legislation necessitated the HOR to set up
an Ad-hoc Committee tasked with obtaining feedback from the public and
making recommendations for strengthening the policy. The Committee’s
engagement with stakeholders, on August 15, 2023, at a one-day
legislative summit on the issue, laid bare the manifold shortcomings of
the legislation, culminating in decisive recommendations for its repeal
and re-enactment, aimed at harmonizing and rectifying the identified
discrepancies.

Despite news reports suggesting that troubling provisions of the policy
have been reviewed, the absence of a publicly accessible document
delineating these modifications casts a shadow of uncertainty over the
entire reform process. This opacity has left stakeholders adrift in a
sea of conjecture, uncertain whether the legislation was repealed,
amended, remains untouched in its problematic form or if the changes
made may also not have introduced new issues that require scrutiny.
Against this backdrop, a pressing question arises: on what basis is the
initiative set to launch, apparently circumventing essential democratic
processes crucial for ensuring its legitimacy and the public
participation that is critically important for its validation?

Unresolved Issues?

Beyond the ambiguity that shrouds the amended or re-enacted student loan
framework, a critical question remains unanswered: will the scheme
effectively tackle deep-seated issues afflicting the educational sector,
such as funding deficits, the mass exodus of teaching talents, the
dearth of research facilities, frequent staff strikes, inadequate staff
remuneration, and the dilapidation of learning and hostel facilities?
These factors critically impact the quality of student learning
experiences and are structural problems that cannot be wished away by
the student loan. Even so, the student loan framework conspicuously
lacks mechanisms for grievances—vital for upholding students’ rights to
obtain tangible value from their loans and for voicing concerns when
educational outcomes do not meet expectations. As such, the scheme falls
short of facilitating the holistic improvement of tertiary education in
Nigeria, thereby undermining its potential to enhance students’ academic
experiences and development.

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In the final analysis, what the Nigerian government must undertake is a
fundamental recalibration— a return to the basics of adequately funding
the educational sector to unlock its full potential. While
interventionist initiatives like the student loan fund may present an
appealing façade, they scarcely tackle the root causes that have
perennially constrained the educational system. This systemic oversight
elucidates one of the reasons why the Academic Staff Union of
Universities (ASUU) has persistently rejected the loan scheme, and
recently refused to seat on the management board governing the loan
scheme.

Despite the challenges existent in its tertiary sector, Nigeria has the
potential to nurture world-class university centers if state authorities
commit to a sustained investment in education. If the government has the
capacity to allocate funds to the student loan scheme from its various
national coffers—tax income and profits—it undoubtedly possesses the
capability to enhance funding for the educational sector.

Persistent underfunding has been identified as a critical barrier within
the educational sector, with Nigeria continually failing to meet the
global recommended funding benchmark of 26% of the national budget to
education. In 2024, the sector’s allocation was a mere N2.18 trillion,
representing only 7.9 percent of the national budget. An upward review
of the budgetary allocation to education is imperative for the radical
transformation of the landscape. A substantial injection into the system
will not only effectively address entrenched issues that have
historically undermined the sector, but also foster academic
environments where emphasis is placed on quality over quantity.
Ultimately, this strategic approach will guarantee the production of
well-rounded individuals equipped with the necessary skills to advance
society, rather than merely churning out graduates who have attended
school without benefitting from a transformative educational experience.

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Zikora Ibeh is a Policy & Research Officer at transparency watchdog
Corporate Accountability and Public Participation Africa (CAPPA).

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