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Exploring the Student Loans Act: Hope or Hurdle

A contentious provision is that a beneficiary will commence repayment two years after the National Youth Service Corps programme. It is unrealistic. The Nigerian Graduate Report 2022 found that 58.9 per cent of HND graduates, 49.55 per cent of OND graduates, and 39.75 per cent of bachelor’s degree holders, are unemployed.
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President Bola Tinubu recently signed the Students Loans (Access to Higher Education) Bill, 2024, into law, aiming to ease the financial burden on Nigerian students. However, not everyone is celebrating. Despite its noble intentions, some critics are wary, pointing to past failures and current economic challenges.

The Act, an upgrade from its predecessor, promises to cover tuition and student welfare for a broader range of students, including those in fee-free public institutions and vocational training. It’s a move welcomed by many, including the National Association of Nigerian Students, who see it as a step in the right direction.

Yet, a major sticking point is the repayment timeline. Under the Act, beneficiaries must start repaying their loans two years after completing the National Youth Service Corps program. This has sparked concerns, especially considering Nigeria’s staggering unemployment rates. According to recent reports, a significant percentage of graduates remain jobless years after completing their education.

Comparisons to the student loan crisis in the United States, where debt has reached a staggering $1.7 trillion, add weight to these concerns. Additionally, Nigeria’s history of corruption and mismanagement raises doubts about the effectiveness of such schemes.

In essence, while the Student Loans Act offers hope for many Nigerian students, its success hinges on addressing crucial issues like unemployment and ensuring transparency in loan management. Without these safeguards, the Act risks repeating the failures of past initiatives.

After thoughts

It’s clear that addressing the challenges of education financing in Nigeria requires a multi-faceted approach. While the Student Loans Act is a step forward, it’s essential to consider additional measures to support graduates in finding employment and ensuring the responsible management of loan funds. Collaborative efforts between government, educational institutions, and private sectors may offer solutions that go beyond financial aid to create a more sustainable and equitable education system for all Nigerians.

Building a sustainable education financing system in Nigeria requires addressing systemic issues beyond just loan provisions. This could involve investing in vocational training programs to equip students with practical skills for the job market, fostering entrepreneurship opportunities to create employment, and improving the overall business environment to attract investments and spur economic growth.

Additionally, enhancing transparency and accountability in government spending, as well as promoting financial literacy among students, can help prevent misuse of loan funds and empower individuals to make informed financial decisions. If we adopt a comprehensive approach that addresses both the immediate needs and underlying challenges, Nigeria can strive towards a brighter future for its students and the nation as a whole.

Tertiary education is witnessing a transformative shift with the Nigeria Education Loan Fund announcing that over 60,000 students have applied for its interest-free student loans, with successful applications surpassing 30,000. This milestone marks a groundbreaking achievement in the Fourth Republic. Yet, the initiative’s lasting impact hinges on its ability to be sustained over time.


The repealed Student Loan Act, 2023, had some challenges bordering on governance and management, purpose of the loans, eligibility criteria for applicants, method of application, repayment provisions, and recovery of the loans.


Student Loans (Access to Higher Education) (Repeal and Re-enactment) Act, 2024 sufficiently resolved the challenges highlighted above and includes the following amendments:

(a) Establishes the Nigeria Education Loan Fund (NELFUND) as a body corporate that can sue and be sued in its name and has the power to acquire, hold, and dispose of movable and immovable property for the purpose of its functions.

– This ensures that the Fund can legally enter contracts, including loan agreements, and may also initiate action to ensure repayment by beneficiaries.

(b) Empowers the Fund to provide loans to qualified Nigerians for tuition, fees, charges, and upkeep during their studies in approved tertiary academic institutions and vocational and skills acquisition institutions in Nigeria.

– Build, operate, and maintain a diversified pool of funds to provide loans to qualified applicants and ensure access to higher education, vocational training, and skills acquisition.

– These amendments ensure that students can apply for and receive loans to cover tuition, institutional charges, and some upkeep.

(c) Separates the governance functions from the management operations of NELFUND by establishing a board of directors with a chairman and a secretary.

– The board’s members are drawn from relevant ministries, regulatory bodies, and participating agencies, including the Federal Ministries of Finance and Education, the FIRS, NIMC, NUC, NBTE, and NCCE, as well as representatives of universities, polytechnics, colleges of education, students of tertiary institutions, and the organized private sector.

– Establishes a management team led by a managing director, including executive directors responsible for the day-to-day management and operations of the Fund.

– The President of the Federal Republic of Nigeria appoints the Board and Management.

(d) Properly defines the resource structure of the Fund by, among other things, establishing the General Reserve Fund into which shall be paid 1 percent of all taxes, levies, and duties collected by the Federal Inland Revenue Service and accruing to the benefit of the Federal Government, and

– From which the Fund shall pay amounts payable as loans to qualified applicants for tuition, fees, charges, and upkeep, as well as the Fund’s operational expenses and such expenditures necessary to attaining the Fund’s objectives and functions.

(e) Changes to eligibility criteria for applicants

– Removes the family income threshold so Nigerian students can apply for these loans and accept responsibility for repayment according to the Fund’s guidelines.

– Removes the guarantor requirement so that students can apply for and receive loans subject to application and identity verification guidelines as provided by the Fund.

– Student applicants can no longer be disqualified based on their parent’s loan history.

(f) Establishes a justice and fairness provision mandating the Board to ensure a minimum national spread of loans approved and disbursed in each financial year.

(g) Applicants to the Fund may apply for loans to cover tuition and other fees payable to the school and maintenance allowance payable to the student.

(h) Repayment of loans by beneficiaries

– The Fund shall not initiate loan recovery efforts until two years after the completion of the National Youth Service Programme.

– A beneficiary may request an extension of enforcement action by the Fund by providing a sworn affidavit indicating that he/she is not employed in any capacity and is not receiving any income.

– Only a person who provides a false statement to the Fund under this section is guilty of a felony and is liable to imprisonment for three years.

– Makes provision for loan forgiveness in the event of death or acts of God causing inability to repay.

The Act effectively removes the previous encumbrances found in the first iteration of the Act, and paves the path for the protection of Nigeria’s future by ensuring that citizens have the means to fund their education, acquire critical skills, and become productive contributors to national development.

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