The Federal Executive Council has proposed a bill that would allocate 30 per cent of the Tertiary Education Trust Fund’s (TETFund) resources to the Student Loan Scheme.
The bill aims to amend Section 3 of the Tertiary Education Trust Fund Act No. 16, 2011, which addresses the establishment of the TETFund.
Mr Bayo Onanuga, the Special Adviser to the President on Information and Strategy, announced this during a briefing with State House correspondents at the Aso Rock Villa in Abuja on Wednesday.
Onanuga stated that this was part of the omnibus Economic Stabilisation Bills (2024), which had been considered and approved at Monday’s Council meeting for transmission to the National Assembly.
If the bill is passed by the National Assembly, TETFund will be required to allocate 30 per cent of its initial funding from the Federation Account to the Nigerian Education Loan Fund (NELFund).
The bill stipulates, “The Fund shall, before disbursement of the amount in the Fund, set aside in each year (a) one-third of the amount to be transferred to the Nigerian Education Loan Fund established under the Students Loans (Access to Higher Education) Act.”
It also places a five per cent cap on TETFund’s annual administrative expenditure.
It states, “An amount not exceeding five per cent of the total monies accruing to the Fund in the preceding year, which shall be applied for – (i) the cost of administration and management of the Fund, necessary for the due administration and implementation of the purpose of this Act, (ii) the maintenance of any property acquired by or vested in the Fund, and generally to pay for services rendered to the Fund, and (iv) any other expenditure as may be approved by the Fund, from time to time, in connection with all or any of its functions and powers under this Act.”
Onanuga emphasised that the proposed legislation would provide a sustainable financial source for student loans.
“Some of us may have wondered how we are going to fund the loans being given to Nigerian students. Most of the funding will now come from the money allocated to TETFund.
“An amendment to the TETFund Act of 2011 will now require the fund, before disbursing any money, to set aside an initial one-third of its allocation to the Nigerian Education Loan Fund. This means that 30 per cent of what TETFund receives from the Federation Account will now be directed to NELFund, providing a reliable funding source.
“TETFund has also been restricted to spending no more than five per cent of its income on administration. Whether it’s for capital projects or salaries, it cannot exceed five per cent of its total income from the Federation Account. That is the maximum allowed. So, 30 per cent of TETFund’s resources will go towards the NELFund, and five per cent will be for its own operations,” Onanuga explained.
He added that the Federal Government was proposing these changes because “TETFund cannot continue building lecture halls and laboratories without ensuring that students can benefit from these facilities with loans from NELFund.”
He noted that the new allocation would be “supplementary,” as “there will also be budgetary allocations from the Federal Government to NELFund on a regular basis.”
