The re-enacted student loan policy of the federal government has eliminated the eligibility clause requiring applicants to provide a guarantor and declare their family income.
President Bola Tinubu, in June 2023, enacted the student
loan policy to grant interest-free loans to needy students.
The scheme was slated to commence between September and
October 2023 but implementation was repeatedly deferred.
The policy was also heavily criticised for its stringent
requirements which many stakeholders argued would render the scheme
inaccessible to indigent students who need it the most.
These included that the prospective applicant’s family’s annual
income must be less than N500,000.
Another was that they needed two guarantors including a
civil servant with 12 or more years in the service and a lawyer of at least 10
years post-call.
In March, the president wrote to the national assembly requesting
the repeal and reenactment of the law.
At the state house in Abuja on April 3, Tinubu signed the
re-enactment bill into law, effectively repealing and reintroducing the policy.
Ajuri Ngelale, the special adviser to the president, said
the repealed Student Loan Act of 2023 had challenges bordering on governance,
management, purpose, eligibility criteria for applicants, method for
application, repayment provisions, and recovery of the loans.
Ngelale said the amendments made to the policy include the
establishment of the Nigeria Education Loan Fund (NELFUND) as a corporate
administrative body tasked with overseeing loan contracts and initiating action
to ensure repayment.
NELFUND is also tasked with providing 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.
The fund is also meant to 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.
Below are other attributes of NELFUND as reflected in the
amendments in the Student Loans Act 2024:
·
NELFUND’s governance and management functions
are separated by establishing a board of directors headed by 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.
·
Representatives of universities, polytechnics,
colleges of education, students of tertiary institutions, and the organized
private sector also have a place on the board.
·
The act also establishes a management team led
by an MD, including executive directors responsible for the day-to-day
management and operations of the fund.
·
The president is tasked with appointing the
board and management.
·
The act also redefines the resource structure of
the fund by, among others, establishing the General Reserve Fund.
·
The GRF is to be funded by 1 percent of all
taxes, levies, and duties collected by the Federal Inland Revenue Service
(FIRS) and accruing to the benefit of the Federal Government.
·
From the GRF, NELFUND is expected to disburse
amounts payable as loans to qualified applicants for tuition, fees, charges,
and upkeep.
·
The GRF will also finance the fund’s operational
expenses.
The re-enactment act also adjusted the eligibility criteria
for applicants.
·
It removed the clause requiring applicants to
declare their family income. This is so students can apply for loans and accept
responsibility for repayment according to the fund’s guidelines.
·
It removed the guarantor requirement so that
students can apply for and receive loans subject to application and identity
verification guidelines as provided by the fund.
·
Among the adjustments to the eligibility
criteria is that student applicants can no longer be disqualified based on
their parent’s loan history.
The re-enactment establishes a justice and fairness
provision mandating the Board to ensure a minimum national spread of loans
approved and disbursed in each financial year.
Applicants to the fund may seek loans to cover, tuition,
other fees payable to the school, and maintenance allowance payable to the
student.
Adjustments were also made to the guiding principles
surrounding the repayment of loans by beneficiaries:
·
The fund will not initiate recovery efforts
until two years after an applicant’s youth service run.
·
A beneficiary may request an extension of
enforcement action by the fund by providing an affidavit indicating that he/she
is neither employed in any capacity nor receiving any income.
·
Any person who provides a false statement under
this provision is guilty of a felony and is liable to imprisonment for three
years.
·
Makes provision for loan forgiveness in the
event of death or unforeseen tragedy causing inability to repay.
Ngelale said the re-enacted legislation “effectively removes
the previous encumbrances” in its first iteration.
“It 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,” the
special adviser added.
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