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Students Loan: What you need to know about new bill.

The National Assembly, on Wednesday, passed the Students Loans (Access to Higher Education) Act (Repeal and Re-Enactment) Bill, 2024. This comes after separate considerations by both the Senate and the House of Representatives of the report of the Committee on Tertiary Institutions and TETFund

EPRODITY recalls that less than one year after President Bola Tinubu signed the Students Loan Bill into law, the legislation was returned to the National Assembly for a complete overhaul.

For eight months, President Tinubu, who campaigned on providing loans to students, struggled to implement the law with several missed deadlines.

The president faced criticism over the several missed deadlines for the implementation of the policy.

However, Mr Tinubu on Thursday forwarded a bill to the National Assembly seeking a repeal and re-enactment of the bill.

According to the president, some of the provisions of the law made it difficult to kickstart the project. He, therefore, urged lawmakers to do a complete overhaul of the legislation.

“The bill seeks to address the challenges relating to the management structure of the Nigerian Education Loan Fund (NELF), applicant eligibility requirements, loan purpose, funding sources and disbursement and repayment procedures,” the president said in a letter addressed to the National Assembly.

In this report, EPRODITY reviews some of the changes President Tinubu is proposing in the law.

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Inclusion of all students

One of the major issues the proposed amendment seeks to cure is the exclusion of some of the group of students because of the wording of the law.

The existing Act provides that the loan is for payment of tuition fees and nothing more. President Tinubu, in the letter, said such provision would prevent federal university students from accessing the loan because they don’t pay tuition.

Under the current legislation, students can only apply for loans to pay tuition fees. Federal tertiary institutions don’t charge tuition fees. However, students must pay other institutional charges.

Also, under the current Act, students would not be able to apply to the Fund for loans to cover those other institutional charges or their other upkeep costs, thus defeating the purpose of the loan, which is to ease access to tertiary education for young Nigerians.

The proposed bill says the fund can “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.”

Transfer of operational powers from the CBN governor

In the current Act, the CBN Governor has the responsibility of administering the fund. The administration of the Fund is vested in a Special Committee, with the Governor of the Central Bank of Nigeria (CBN) as the Chairman. The Governor implements the committee’s executive decisions and appoints a Secretary to assist.

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If the new bill is passed, the CBN governor will be stripped of the implementation of the fund. The implementation will now be handled by the Managing Director of the Fund.

Mr Tinubu said in his letter: “The Act imposes on the Governor of the CBN management and executive responsibilities outside the core mandate of the CBN, which should be the Governor’s focus.”

Removing Guarantors

The bill by the President is also seeking to remove some of the conditions to qualify students for the loan.

For instance, for any student to qualify for the loan, he must provide two guarantors who shall be a civil servant of level 12 and above, a lawyer with ten years post-call experience, a judicial officer, or a justice of the peace

Also, the current Act allows only applicants with a combined family income of less than N500,000 per annum to apply. Under this provision, the child of a person who earns N45,000 a month is disqualified from applying for this loan.

Children of loan defaulters banned from accessing loan

In addition, the Act contains a provision that bans the children of defaulters from accessing loans.

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In the proposed Act, student applicants can no longer be disqualified based on their parent’s loan history.

Payment to commence two years after work

The Act criminalises failure to repay loans obtained from the Fund without consideration for circumstances, including unemployment, death, or disability, that may affect an individual’s ability to pay.

It merely provides that “The Fund shall not initiate loan recovery efforts until two years after the completion of the National Youth Service programme.”

In the letter, the president said beneficiaries of the Fund shall begin repayment as soon as they are employed in any capacity.

Loan forgiveness on event of death

In the proposed bill, the loan ends with the death of a beneficiary.

The president said the bill “makes provision for loan forgiveness in the event of death or acts of God causing inability to repay.”

“A beneficiary may request an extension of enforcement action by the Fund by providing a sworn affidavit indicating that he is not employed in any capacity and is not receiving any income.

“Only a 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.”

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