Students Loan Bill and What You Need to Know?

As Nigeria is celebrating June 12—A day politically linked to democracy Day—President Bola Tinubu signed the Student Loan into Law. While this may be a piece of good news that gives a fresh breath to the deadening democracy, it is absolutely novel in Nigeria’s history, living the possibility of many dead to its essence and importance to the country’s staggering economy and them. This article will explain all you need to know about the Students Loan bill signed and its importance to you, as a student in Nigeria. 

 

Background

Over the past few years, Nigeria’s economic progress has slowed down due to the global pandemic. This has reduced the revenue generated by the government in various sectors, thereby reducing the budget allocated for the education sector. Despite many children wanting to go to school, many regions of the country do not have the resources for their educational needs. This is why there is a high record of illiteracy in an over 200-million-population country with over 135 million living in abject poverty.

 

An article published by Premium Times in September 2022, and per the latest data by UNESCO, there are 20 million non-school-going children in Nigeria. And the major reasons have been attributed to lack of funds.

 

UNICEF, cited by Reliefweb said 18.5 million children were out of school in Nigeria by May 2022. 60% of these children were girls. With the staggering economy of Nigeria, there is a tendency the per cent will increase by 10% in 2023/2024.

 

Data sourced from Statista noted that 20% of all Nigerian children were out of school around the middle of 2022. In 2019, 22.7 million children were enrolled in public elementary schools. Another 5.4 million went to private schools.

 

In 2018/2019, around 7.4 million students were enrolled in lower secondary education schools.

 

In 2021, there were 170 universities in Nigeria. 79 of them were private, while 43 were federal universities. 48 were state universities.

 

In the year 2018/2019, women accounted for 38% of the total students pursuing master’s studies. Similarly, female students among undergraduate university students totaled around 44%.

 

According to Vanguard Media and based on a report by Invictus Africa, the budget allocated to education in Nigeria in 2022 was 5.39%. This is a reduction of 50% from what it was in 2015 (10.79%).

 

So, this among others are mitigating factors to good education in Nigeria for any youth. But with students loan, what are the possible solutions to these.

 

President Tinubu and the Students Loan Bill 

On Monday an Aide to the President, Dele Alake, said President Bola Tinubu has signed the Student Loan Bill into law. ⁣⁣

 

This was coming at a critical time when Nigeria’s economy had posed for a collapse and educational sector downtrodden. The bill is expected to enable Nigerian students to access loans at interest-free rates. ⁣⁣

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News agents reported that the piece of legislation passed the second reading at the House of Representatives on May 25, 2023 and this became a law.

 

What Is a Student Loan Bill?

A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in the fact that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in school. It also differs in many countries in the strict laws regulating renegotiating and bankruptcy.

 

Countries like Australia, Canada, France, Germany, New Zealand, Thailand, India, South Korea, United Kingdom, United States and Hong Kong have put students loans in place to ease the burden of education for them.

 

With students’ loan bill signed to law in Nigeria, Nigerian students can access it through an education bank.

 

In November 2022, the bill, which seeks to provide interest-free loans to indigent Nigerian students, was passed by the national assembly.

 

The bill was sponsored by the immediate-past speaker of the House of Representatives, Femi Gbajabiamila.

 

Recalled Tinubu in one of his campaigns held at the British Royal Institute in London had promised to give student loans as part of efforts to develop the education sector and also build the youth capacity.

 

“Youths are the greatest asset of tomorrow,” Tinubu said in Chatham House while fielding questions from participants at the event, adding that they will be part of his “all-inclusive” government, pointing to the Lagos State Governor Babajide Sanwo-Olu.

 

“The education system is to change. We would overhaul it and tinker with some areas with the philosophy that no one would be left behind. There will be student loans for all. We are going to reform the Almajiri system, We are equally going to build more schools, recruit more teachers and train them,” the former Lagos state governor said.

 

To further help young people, he said if elected, his government would equally introduce technology hubs where youths can acquire digital skills to better develop their leadership skills.

 

“Youths can even develop technological languages on their own and make a better 21st-century approach to governance in Nigeria,” he said.

 

Benefits of A Student Loan Bill

The major benefits of student loan is to ease the financial burden of education and build the economy and the country’s illiteracy.

 

But following are the provisions available based on the bill as published by The Punch Newspaper:

 

1. The new act will establish the Nigerian Education Bank, which will supervise, coordinate, administer and monitor the management of student loans in Nigeria.

 

2. Applicants will go through screening to determine whether they meet the requirements for the loan.

 

3. Students in all the higher institutions are eligible for the loan.

 

4. It provides funds for all education-related matters, including textbooks, and research.

 

5. It is only accessible to students studying in Nigeria.

 

6. There will be jail terms for student loan defaulters.

 

7. The repayment of the loan will begin two years after the National Youth Service Corps Scheme is completed.