Reworked Student Loan Law ready for Tinubu’s assent
The reworked student loan Bill is ready for President Bola Ahmed Tinubu’s assent.
The Senate yesterday passed the Student Loans (Access to Higher Education) Act (Repeal and Re-Enactment) Bill, 2024.
It was after considering the report of the Senate Committee on Tertiary Institutions and TETFUND.
The House of Representatives also passed the harmonised copy of the bill into law.
Both chambers passed the bill within three legislative days after President Tinubu sent an Executive Bill last Thursday.
A key highlight of the bill is that one per cent of collectable taxes by the Federal Inland Revenue Service (FIRS) will be used to fund the scheme.
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The FIRS set a revenue target of N19.4 trillion for this year after surpassing its 2023 target by 107 per cent.
It generated N12.37 trillion in 2023.
Should the FIRS hit its 2024 target, it means that N194 billion will go to the student loan fund.
The bill provides for the establishment of the Nigeria Education Loan Fund and removes the family income threshold as a condition for accessing the loan.
Under the new bill, false declaration attracts three years in jail, while there is loan repayment forgiveness in case of a beneficiary’s death.
Senate Committee Chairman, Muntari Dandutse (APC – Katsina South) presented the report during plenary.
At the House, Chairman of the Committee on Students Loan, Scholarship and Higher Education Financing, Isiaka Adegboyega, said a joint committee of the Senate and House critically examined the provisions.
He said the re-enactment would boost educational advancement.
The student loan programme would have officially kicked off last Thursday, but it was shifted indefinitely.
The new Bill scrapped and substituted the Student Loan Act.
Both chambers suspended their relevant rules and passed the new Bill for first reading last Thursday.
They, thereafter, referred the Bill to the Committee of the Whole where they separately considered and passed it for Second Reading before a public hearing.
President Tinubu, on June 12, 2023, signed into law the defunct Student Loan Bill to provide interest-free loans to Nigerians seeking higher education.
It was sponsored by former House of Representatives Speaker Femi Gbajabiamila, now Chief of Staff to the President.
The ex-lawmaker introduced the bill in 2016 as part of measures to address the funding gaps in tertiary education.
The new Bill got expeditious consideration at the two chambers.
The Bill proposes one per cent of all collectable revenue by the Federal Inland Revenue Service (FIRS) to fund the scheme.
The hurdles of a guarantor, a parent’s debt profile and others in the old Act have been removed in the new Bill, thereby making it easier for the loan to be accessed.
The proposal is entitled: “A Bill for an Act to Repeal the Students Loans (Access to Higher Education) Act, 2023 and Enact the Student Loans (Access to Higher Education) Bill, 2024 to Establish the Nigerian Education Loan Fund as a Body Corporate to Receive, Manage and Invest Funds to Provide Loans to Nigerians for Higher Education, Vocational Training and Skills Acquisition and Related Matters”.
A significant amendment, according to a policy brief, includes “the establishment of 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”.
On eligibility criteria for applicants, the new Bill removes the family income threshold to enable Nigerian students to apply for loans and accept responsibility for repayment according to the Fund’s guidelines.
It also 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.
The Bill 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 apply for loans to cover tuition and other fees payable to the school and maintenance allowance payable to the student.
On repayment of loans, the Bill indicates that beneficiaries of the Fund shall begin as soon as the beneficiary becomes employed in any capacity.
According to the brief, the Fund shall not initiate loan recovery efforts until two years after the completion of the National Youth Service Corps (NYSC) programme.
It states that a beneficiary may request an extension of enforcement action by the Fund by providing an affidavit indicating that he is not employed in any capacity and is not receiving any income.
It provides that any 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.
It makes provision for loan forgiveness in the event of death or acts of God causing inability to repay.
The brief says: “NELFUND can legally enter contracts, including loan agreements and may also initiate action to ensure repayment by beneficiaries.
“It also empowers the Fund to provide loans to qualified Nigerians for tuition, fees, charges, and upkeep during their studies in approved tertiary education institutions and vocational and skills acquisition institutions in Nigeria.
“It empowers the Fund 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.
“These changes will ensure that students can apply for and receive loans to cover tuition, institutional charges and some upkeep costs.
“It also separates the governance functions from the management operations of the NELFUND by establishing a Board of Directors with a Chairman and Secretary.
“The board’s members are drawn from the relevant ministries, regulatory bodies, and participating agencies, including the Federal Ministries of Finance and Education, the FIRS, National Identity Management Commission (NIMC), National Universities Commission (NUC), National Board for Technical Education (NBTE), and National Commission For Colleges of Education (NCCE), as well as representatives of universities, polytechnics, and colleges of education, students of tertiary institutions, and the organised private sector.
“It also properly defines the resource structure of the Fund by, amongst other things, establishing the General Reserve Fund into which shall be paid one per cent of all taxes, levies and duties collected by the FIRS and accruing to the benefit of the Federal Government of Nigeria.
“It indicated that this is 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 its objectives and functions.”
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