A number of people shared an article with me, in which its author (unidentified) concluded that no student in Nigeria is eligible for the newly established federal student loan program. The people (friends and acquaintances) asked for my opinion of the article. So I am posting my opinion here.
There are a number of misrepresentations by the author concerning the Student Loan Act of 2023 (the Act). I will say this though, the author has one valid point. Other points are premised on misrepresentations. Let me try to address the issues (reasons for ineligibility as identified by the author). Note that I have not posted the opinions of the author. This is because doing so will further lengthen an already long post. I have crafted my response in such a way that you will be able the deduce the claim I am addressing even if you have not see the post/claims being addressed. So let me start.
1. Contrary to the claim by the author, tax clearance is not a requirement for the loan application. It is not mentioned in the Act… I should say the version of the Act I saw. If the author insists, s/he should cite the appropriate section of the Act.
2. This is a misrepresentation of the income threshold for qualification. The requirement is that “applicant’s income *or* family income must be less than N500k per annum” (Section 14(b)). This means that the applicant can apply based on his/her own income or that of the family. If the family income is above the threshold, the applicant can use his/her own income. In the case where the applicant is a minor (less than 18yrs old), it may be possible for the minor to seek legal emancipation. This will allow such minor to apply based on his/her income.
3. This is a valid concern. The act requires 2 guarantors each of whom must be one of the following: a level 12+ civil servant or, a lawyer with 10yr experience or, a judicial office or, a justice of peace (Section 14(c)). Very few people will have access to people with such qualifications. This is one that must be reviewed or expanded to include other qualifications. Loans should not be given without guarantee of repayment.
4. This is the same issue as number 3 above. The purpose of guarantor is to serve as surety in case of loan default. If the guarantor qualification pool is expanded, some people in the applicant’s circle may qualify as guarantor.
5. It is true that the Act says “Disbursement shall be on availability of funds” (Section 16(4)). This is a common clause in programs like this. It does not mean there won’t be funds. Saying that loan applicants are at the mercy of the system is scaremongering. There is nothing to suggest that funds will not be available. The source of funds for the loan scheme is robust. Six sources were identified in the Act (Section 12):
i.) education bonds
ii.) education endowment fund schemes
iii.) 1% of all taxes, levels and duties through FIRS (Federal Inland Revenue Service), Immigration Service and Customs Service
iv.) 1% of national profits from
oil and other minerals
v.) donations, gifts, grant, endowment, etc
vi.) revenue specified for the fund from any other source.
Now, it is important to note that funds are finite. So it is possible that some applicants may not be awarded the loan. So a summary claim that applicants will not get the loan after meeting all requirements is an utterance rooted in ignorance of the funding source.
In the author’s summary, s/he claimed that the Bank MD will approve the loan. This is false; it is not in the Act… At least not in the copy I saw. The Act established an 11-member Special Committee for the loan (Section 7). The committee, chaired by CBN Governor, does the review and approval of loans (Section 16(3)).
There is also a false claim that loan repayment default after 2 years of graduation will land the defaulter in jail. This is not in the Act… at least not in the version of the Act I saw.
The place were jail term was mentioned was in the case of a self-employed loan beneficiary who failed to inform the government about his/her self-employment status within the stipulated period (Section 18(6)). The punishment is N500k or 2 yr jail or both. For those who have employers, this does not apply since the employer will be responsible for direct remittance of 10% of employee salary as loan repayment (Section 18(2)).
By the way, it would have been better if the author provided a solution or modification that will make the loan scheme better. Complaint without possible solution is fruitless.
- Prof Ayodeji Alajo( GCIOB 89 set )
