Students Loan: Important Information regarding the New Bill
Comment
The National Assembly, on Wednesday, passed the Students Loans (Access to Higher Education) Act (Repeal and Re-Enactment) Bill, 2024. This bill will repeal and replace the existing legislation on student loans and access to higher education. It has been carefully considered and reviewed by the Senate and the House of Representatives, as well as the Committee on Tertiary Institutions and TETFund, before being passed. This new bill aims to provide better and more accessible opportunities for students to acquire higher education through loans.
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This highlights the challenges and complexities involved in implementing new legislation, especially one that involves financial resources and affects a large portion of the population. It also brings attention to the importance of thorough planning and consideration before enacting new laws, as well as the need for efficient and effective implementation strategies. Ultimately, this serves as a cautionary tale for future legislators and policymakers to carefully assess the potential difficulties and implications of their proposed legislation before it is signed into law.
The president’s actions were met with criticism and backlash due to the numerous missed deadlines for the implementation of the policy. However, on Thursday, Mr Tinubu took action by forwarding a bill to the National Assembly that aims to repeal and re-enact the legislation. The president stated that certain provisions in the law were hindering the progress of the project and called for a complete overhaul of the legislation.
The bill aims to tackle various issues surrounding the administration of the Nigerian Education Loan Fund (NELF). These include clarifying the criteria for applicants to be eligible for loans, specifying the purpose for which the loans can be used, determining the sources of funding for the loans, and establishing procedures for disbursement and repayment. President Buhari conveyed these points in a letter directed to the National Assembly.
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This amendment aims to address the issue of students being excluded from accessing loans due to the wording of the current law. The current law only allows the loan to be used for tuition fees, which excludes students who do not have to pay tuition, such as those in federal universities. This change will allow more students to have the financial support they need to pursue their education without being limited by their university’s payment structure. President Tinubu has recognized this issue and is seeking to expand the eligibility of students to access loans for other education-related expenses, such as textbooks, housing, and other necessary materials. By expanding the scope of the loan, more students from diverse backgrounds will have the opportunity to access higher education and achieve their academic and career goals.
The proposed bill seeks to amend the current legislation and allow students to apply for loans to cover not only tuition fees but also other institutional charges and upkeep costs. This would greatly benefit young Nigerians who may struggle to afford the additional costs associated with tertiary education. This amendment would align with the purpose of the loan, which is to ease access to education and provide opportunities for students to pursue their chosen fields without financial burden. It is a step towards creating a more equitable education system in Nigeria.
Transfer of operational powers from the CBN governor
Despite the proposed changes in the new bill, some believe that the CBN governor should still retain the responsibility of administering the fund. They argue that the CBN governor has the necessary expertise and experience to effectively manage the fund, and that it falls within the core mandate of the CBN to promote economic stability and growth. However, others believe that the Managing Director of the Fund, who would now be responsible for implementation under the new bill, would be better suited for the job as they would be more familiar with the specific needs and goals of the fund. Ultimately, the decision on who should administer the fund will have to be carefully considered and balanced between the expertise and experience of the CBN governor and the Managing Director.
Removing Guarantors
However, the President’s bill aims to remove these strict conditions and make it easier for students to qualify for the loan. This will provide more opportunities for students from less affluent backgrounds to access higher education without the financial burden. Additionally, the bill proposes to increase the maximum loan amount from N500,000 to N1 million, allowing students to borrow more to cover their tuition and living expenses. These changes aim to make higher education more accessible and affordable for all students, regardless of their family income or profession of their guarantors.
Children of loan defaulters banned from accessing loan
This provision aims to break the cycle of generational debt and prevent children from being unfairly penalized for their parents’ financial mistakes. By removing this barrier, the proposed Act aims to provide equal opportunities for education and financial aid to all students, regardless of their family’s financial history.
Payment to commence two years after work
The president’s statement seems to contradict the purpose of the Act, which was to protect individuals from facing harsh consequences for failing to repay loans due to unforeseen circumstances. By requiring repayment as soon as employment is obtained, the Act’s intention of providing a grace period for loan repayment is undermined. This may lead to further financial burden and hardship for individuals who are unable to secure employment immediately after completing the National Youth Service programme. This contradiction highlights the need for careful consideration and potential revision of the Act.
Loan forgiveness on event of death
The proposed bill includes provisions for loan forgiveness upon the death of the beneficiary or in cases where the beneficiary is unable to repay the loan due to unforeseen circumstances, such as natural disasters. In such cases, the beneficiary may request an extension of enforcement action by providing a sworn affidavit stating their current employment status and income. However, the bill also specifies that providing false information to the Fund in these cases is a felony and punishable by imprisonment for up to three years.
