How Nigeria’s Student Loan Policy Limits Govt. Tertiary School Students’ Access

Before  it will eventually launch the Students Loan Scheme, the federal government may still do more tinkering with it. Like shoehorn rich kids in private tertiary institutions into the scheme. Not necessarily because Bell University and others carp about their exclusion. President Bola Tinubu just likes manicuring policies to perfection.

But for now, the Access to Higher Education Act 2023 makes the scheme accessible to beaneaters only: those of them in government schools. That’s a problem on its own. It makes little difference in the poverty levels of those in the government schools, and their counterparts in Nigeria’s ivy leagues.

Let’s see how.

Status: Genteel Poverty vs Acute Poverty

The law pegs the annual income of parents whose children seek the loan at less than N500,000 a year. That could pay a king’s ransom when former Speaker Femi Gbajabiala first sponsored the bill. But factor in inflation and other economic fundamentals that have interplayed so far, the amount becomes a piffle. Only the poorest of the poor live earning below that. And tertiary education won’t appear anywhere on their laundry list of lifetime priorities. Children of parents earning above N500,000  yearly will then have to lie through their teeth to qualify. Pity them. Their parents’ annual income of over N500,000 can’t bankroll a B.Sc at Covenant University, for instance. And their genteel poverty will  exclude them from the scheme  if they don’t sanitize the information they fill in the applications.

Programmes Covered

The Student Loan Scheme covers only the first degree, or HND, or NCE, or technical education certificates. Except they mark up their fees soon, government schools offering these don’t charge fees for which you have to rob a bank to pay. That is if the school’s carrying capacity has enough legroom for as many that can afford the fees.

Most students will prefer scraping through earning the first degree to stacking up debt for it–considering the run of things now. For those who really want to study, master and Ph.D programmes are the real McCoy. They are worth borrowing for. Just that the scheme does give a damn about anything beyond the first degree.

How about the Banksters?

The Act establishes the Nigerian Education Bank to run the process through its branches across the nation. Because it’s not their piggy bank, the applicants should brace up to deal with the bank workers. Some may not like the applicant’s nose. That’s even nothing compared to the trouble of getting two guarantors. Lawyers of a decade of practice, or civil servants with 12 years behind them. A justice of the peace can also stick out their neck for an applicant. All the bank wants from parents are clean credit-worthy report all round, including from the last payday loan app they stung for a loan. Junkies, cultists, fraudsters, and deadbeats applying are wasting their time. The office of each school’s student affairs weeds out these unwanted elements. No provision for those who have gone through rehab, and have returned to the straight and narrow. 

The office of the minister of education finally decides who makes the cut. After that, within 30 days, the Bank grants the loan.

Payback

It’s an interest-free loan for those who grab it. That makes sense. So when it’s payback time, borrowers are struggling under the burden of compound interest. The federal government starts tapping them to pay two years after their NYSC programme—10 percent of their salary or income. The family of applicants who die or become eternally incapacitated won’t face any harassment to pay back. But loanshirkers can pull off any stunt.