By Femi Oluwasanmi
The current state of the nation has shown that there is a need for a revamp, a turnaround, and heavy investment in the education sector. That is why both local and international organizations are advocating vigorously for heavy investment in public institutions of learning. Unfortunately, the more the resonation in the call the less it seems the government’s response putting into consideration the amount of funds allocated for the commencement of student loans in the supplementary budget.
On 2nd November 2023, the Nigerian National Assembly approved the supplementary budget sent by President Bola Ahmed Tinubu for approval. Based on the provisions in the budget, a sum of N5 billion was allocated for the proposed student loan scheme while a total of N20 billion was allocated for the renovation of President Tinubu and Vice President Kassim Shettima’s official residences in Lagos, Abuja, purchase of a presidential yacht and official vehicles for the First Lady’s Office.
Though the funds allocated for the scheme were later increased to N10 billion by the lawmakers the initial allocation speaks volumes about the commitment of the government for education in the country.
Student loan scheme started in Nigeria with Decree No. 25 of General Yakubu Gowon’s regime in 1972 which laid the foundation for the establishment of a students’ loan board that provided loans to students between 1973 and 1991.
The challenges encountered during the implementation necessitated the inauguration of regional offices through the promulgation of Decree No. 12, 1988 which later metamorphosed into Decree 50 1991 that birthed the Nigerian Education Bank (EDUBANK) in 1993 but wound up in 2001.
The idea resurfaced again with the introduction of the Student Loan Act sponsored by Hon. Femi Gbajabiamila, the immediate past speaker of the House of Representatives and the current Chief of Staff to the presidency in 2022 and signed into law by President Tinubu in June.
Based on the projections and publicity given by the government pundits, the scheme seems to appear as a device designed to ensure that indigent Nigerian students have access to interest-free loans to facilitate the payment of their tuition but a deeper x-ray of the scheme revealed that it’s likely to follow the path of the previous attempted efforts that died at infancy because of the inherent contradictions in the decrees.
This seems to have started manifesting in the form of postponement already witnessed at its commencement. For instance, the take-off stage that was slated for September and October has been moved to January 2024, raising anxiety among the potential applicants who have placed their hope in the programme.
In a society where planning and people’s welfare are placed above political calculation, the applicants would have sent in their application and be waiting for a response. That is why some have argued that the delay in the commencement of the scheme is unconnected with the calculation for the 2027 election because that will coincide with the graduation period of most of the first beneficiaries if it commences in January 2024 based on the latest date.
Apart from the postponement, the N500,000 designated as the maximum per annual income of the applicant or family of the applicant seems not to be done based on the realities on the ground in Nigeria because the last wages review in 2019, set the minimum wage at N30,000. By calculation, this shows that the annual income of a couple working in civil service will be N720,000 per year. This automatically disqualifies their children from applying for the loan.
With the inflation in the country, it’s obvious that those earning N55,000 monthly might find it difficult to pay the tuition of their children at the higher institution if there is no additional source of income to augment their earnings, not talk of those earning N30,000 minimum wage. This then raises questions on the hope it seeks to renew because as it stands, it is only the children of those earning a maximum of N21,000 monthly that seem to be eligible to apply for the loan.
However, because those earning N21,000 monthly are not at the arena where they can easily access civil servants at level 12, they might be forced to enter into bargaining options with other guarantors outside the civil service permitted by the act or continue to wait till the expiration of the admission.
Also, the process of obtaining signatures from different stakeholders at the institution of learning might encourage corruption and sexual abuse. This can be deduced from the cases of sex-for-marks, sex-for-admission and forms of harassment being reported at the citadel of learning in recent times.
Similarly, the repayment process designed for two years after the National Youth Service Corps service might be difficult for the beneficiaries because of the oversaturated labour market in the country. Most graduates don’t get a good job four to six years after completing their NYSC. Currently, not less than 50 million Nigerians are unemployed while close to 30 million people are underemployed. This shows that over 70 million people are struggling to survive.
In countries like the United Kingdom, and the United States of America where this idea is in use, the government first puts the horse before the cart by working on their economy, creating an enabling environment for businesses and opening other avenues where people are gainfully employed not the other way round as it is being experienced in Nigeria.
In the United States, the student loan scheme started in 1958, with the passage of the National Defense Education Act (NDEA), and provided low-interest loans for students in fields like sciences, engineering, and teaching before it later evolved to become the Federal Direct Loan programme, which allowed students to borrow directly from the US Department of Education. And despite the over 45 million Americans in student loan debt hovering at an amount valued around $2 trillion, the system continues to work because of the strong economic base of the country.
The realities on the ground in Nigeria suggest a need for an acceleration in the quest to reduce unemployment and poverty rates, correct the inherent contradictions in access to higher education and design a policy that will mandate the utilization of the recovered loot for the revitalization of institutions of learning across the country so that the proposed student’s loan scheme will not follow the path of the previous attempted efforts that died at infancy.
Oluwasanmi writes from Atakunmosa, Osun State.