THERE was spontaneous excitement recently following the signing into law the Students Loans Act by President Bola Ahmed Tinubu with many people declaring the law the best thing to have happened to education in the country. However, it seems that those who welcomed the new law, albeit resurrected Student’s loan Decree of 1972, may have perhaps now realised that their ululation was after all akin to reacting to news headlines, which are often bones rather than flesh of news reports.
The Students Loans (Access to Higher Education) Act, 2023 purports to provide easy access to higher education for indigent Nigerians through interest-free loans from a Nigerian Education Loan Fund. While the goal of the law, which is to increase access to education, is commendable, a closer examination of the provisions of the Act, however, reveals a number of flaws and limitations, which are bound to undermine the effectiveness and fairness of the law, thereby rendering it incapable of actually improving access to education.
Firstly, the Act limits the purpose of the loans to the payment of ‘tuition fees’ only and neglects other existing exorbitant charges that students of Nigerian tertiary institutions pay. Students of public tertiary institutions in Nigeria are often told that they are not paying tuition fees; yet all students pay ‘fees’ ranging from N50,000 to N300,000.
“Overall, the flaws of this Students Loans Act did not seem to take into context the failure of previous such endeavours which collapsed due to systemic weaknesses symbolised in corruption and nepotism, all of which have mutated into murderous monsters in our society. The Students Loans Board Decree of 1972 (Decree No. 25) introduced by the Yakubu Gowon regime reportedly failed because of these vices, which were then at infancy.”
There is always a mistaken, if not dubious, assumption by past governments, a wrong narrative that has been transmitted through the Students Loans Act, that Nigerian public tertiary education is entirely free. In reality, students are overburdened with substantial fees disguised in various nomenclatures by bureaucrats in the system, such as acceptance fee, medical fee, etc. In addition to these charges, any parent/guardian with a student in any tertiary institution in the country expends huge resources on accommodation, feeding, books and ‘handouts’ irrespective of whether it is a federal or state tertiary institution.
The recent fees increment by the authorities of the University of Abuja, where fees ranging from N82,000 to N225,000 per annum were unilaterally imposed, is a typical example. Therefore, by limiting the use of the loans strictly for ‘tuition fees’, the Students Loans Act failed to address other pertinent and inevitable financial needs that ‘indigent student beneficiaries must shoulder. The reality, therefore, will be that the so-called indigents students are very likely to be encumbered by these compelling needs as they contend with the uncaptured but core existential necessities if the loans are disbursed directly to them. In other words, the loan scheme is a seeming Greek gift, a crafty means to now formally impose huge fees in our public tertiary institutions.
Apart from the above, another fundamental flaw of the Loan Act is section 14(b), which pegs the income benchmark of either the applicant or his/her family at less than N500,000. This provision is illustrative of the frustrating poverty and existential challenges of majority of Nigerians. While we wonder how the managers of the Loan Scheme will measure family income upon take off of the scheme, is it not anomalous even in our Nigerian context to classify a family whose monthly minimum wage earnings by father and mother (N60,000, i.e. N30,000 apiece) as financially comfortable as to be excluded from the loan scheme since the cumulative “family income must be less than N500,000 per annum”?
For National Record, it is impossible to fathom how earners of a national wage regime as Nigeria’s, generally agreed to be a starvation wage even in West African context, are imagined by those behind the students loans idea to be above the poverty bracket of the crowd of the indigent, and therefore capable of funding tertiary education of their children without assistance.
That Nigeria is classified as the global poverty capital derive essentially from a number of its socio-economic variables including low wage, size of informal economy (3rd largest in the world) all of which read negative. This means that children of the poorest Nigerian workers on minimum wage (that is not implemented by many states) and informal sector workers (majority of who earn below the current miserable minimum wage), are legally excluded from accessing loans as the law sees them as well-to-do by virtue of the income threshold of below N500,000.
“It would have been better that in relaunching this scheme, a broad spectrum of stakeholders, cutting across the federal, state and local government levels, as well as tertiary education-based trade unions, were involved in the design as against the current content produced by self-interested actors with all its limitations meant to serve individual and group interests of the ruling class who continue to rig the entire political economy in favour of themselves.”
Paradoxically, the same law bars those who earn below the minimum wage from accessing the loan by dint of the prerequisite of providing evidence of tax payment. This is because the minimum wage law exempts people earning below the minimum wage from tax payment; and without tax payment, how will parents or guardians of indigent students get evidence of tax payment? Practically, this means that no one can access the loan!
Another steep hurdle an indigent student must scale is to get the loan the requirement of providing guarantors, which on the face of it looks easy for the average Nigerian. But the Nigerian indigent does not have such luxury of access to the categories of guarantors listed in the Students Loans Act, section 14(c), subsections (i) to (iv). The portion reads: “applicant must provide at least two guarantors, and each of the guarantors shall be a – (i) civil servant of at least level 12 in the service, (ii) lawyer with at least 10 years post-call experience, (iii) judicial officer, or (iv) justice of peace.”
A few indigent Nigerians will have the luxury of such connections or social capital, but we may guess that not many in the category of guarantors are likely to be willing to undertake the risk against the stringent penalties for default in loan repayment. This condition will therefore encourage the prevailing corrupt culture of hiring guarantors or sureties rampant in our legal system, and which may eventually truncate the scheme.
We’re of the opinion that in order to boost the spirit of patriotism, these connection and privilege driven criteria should instead be replaced by designing a sufficiently fool proof mechanism based more on communal affiliation, personal character and abilities, amongst other native parameters. By privileging individuals with connections to those with certain positions or credentials, the act perpetuates a system that prioritises nepotism over meritocracy, excluding those without linkage to influential networks.
Overall, the flaws of this Students Loans Act did not seem to take into context the failure of previous such endeavours which collapsed due to systemic weaknesses symbolised in corruption and nepotism, all of which have mutated into murderous monsters in our society. The Students Loans Board Decree of 1972 (Decree No. 25) introduced by the Yakubu Gowon regime reportedly failed because of these vices, which were then at infancy.
“There are of course many other limitations beyond the scope and space of this editorial commentary, but our conclusion on the basis of a careful review indicates essentially that the “Student Loans (Access to Higher Education) Act, 2023” is nothing other than an ad hoc approach to the otherwise huge and complex snags that Nigeria’s education system has been turned into.”
It would have been better that in relaunching this scheme, a broad spectrum of stakeholders, cutting across the federal, state and local government levels, as well as tertiary education-based trade unions, were involved in the design as against the current content produced by self-interested actors with all its limitations meant to serve individual and group interests of the ruling class who continue to rig the entire political economy in favour of themselves.
In the same vein, the mandate that the Nigerian Education Loan Fund will be managed by the CBN Governor as Chairman of a Special Committee with representatives from key agencies of government as well as the Nigeria Labour Congress (NLC), is a red flag for fraud, potential bureaucratic inefficiency and opaqueness. The powers vested in the Chairman and the Special Committee can lead to abuse and mismanagement of funds, especially in the context of recent corruption allegations surrounding the CBN. Other than the President of Nigeria, the Act does not provide any other oversight for checks and balances required for a just, accountable and transparent operation of the Special Committee.
There are of course many other limitations beyond the scope and space of this editorial commentary, but our conclusion on the basis of a careful review indicates essentially that the “Student Loans (Access to Higher Education) Act, 2023” is nothing other than an ad hoc approach to the otherwise huge and complex snags that Nigeria’s education system has been turned into.
We believe that the entire Nigerian education system, in the context of the dangers lined up against it, demands a comprehensive and strategic approach to be able to not only effectively identify and resolve the inherent contradictions, but also to remedy the huge injuries sustained over the decades. In that regard, the Students Loans Act is just a mere glimpse, not even a scratch, at the crust of heaps of dirt on the system.
STUDENTS LOANS BOARD DECREE 1972 -NG-government-gazette-supplement-dated-1972-07-06-no-32-part-a
