According to a news report, the Students Loan Bill that the National Assembly recently passed proposed two years in prison or N500,000 or both for students who default on their loan payments or anyone found helping defaulters.
The National Assembly recently enacted the Student Loan Bill, which has drawn heavy criticism, into law as part of efforts to resolve funding issues in the nation’s tertiary institutions of learning.
The Speaker of the House of Representatives, Femi Gbajabiamila, reportedly issued a warning against the Student Loan Bank’s planned condemnation in the Student Loan Bill.
A Bill for an Act to Provide for Easy Access to Higher Education for Nigerians Through an Interest-Free Loan from the Nigerian Education Bank Established in This Act to Provide Education for Nigerians and Other Purposes Connected Thereto was the name of the bill that Gbajabiamila supported.
The bill aims to create the Nigerian Education Bank, which will have the authority to oversee, coordinate, manage, and administer student loans across the nation.
It will also receive applications for student loans through higher institutions in Nigeria on behalf of the applicants and screen the applications to ensure that all requirements for the grant of such loans under the Act are satisfied.
Also, the bank shall have the powers to approve and disburse to qualified applicants and ensure compliance in respect of disbursement, and monitor academic records of grantees to obtain information on their year of graduation, national service, and employment to ensure that grantees of the loan commence repayment as at when due, among other functions.
According to the Act, all students seeking higher education in public institutions of higher learning in Nigeria shall have an equal right to access the loan without any discrimination arising from gender, religion, tribe, position or disability.
On the repayment plan, the bill recommends that “Any beneficiary of the loan to which this Act refers shall commence repayment two years after completion of the National Youth Service Corps programme.”
It also recommended that repayment shall be by direct deduction of 10 per cent of the beneficiaries’ salary at source by the employer and credited to the students’ loan account to be prescribed by the bank.
“Where the beneficiary is self-employed, he shall remit 10% of his total profit monthly to the student loan account to be prescribed by the bank.
“For the purpose of sub-section 3 above, a self-employed person shall, within 60 days of assuming that status, submit all information such as the name of business, address and location, registration documents, registered, name of bankers, names of partners, name of directors and shareholders to the Commission.
“Anyone in default of the provisions of sub-section 4 above or
found to be aiding the default of any of the provisions of this Act is guilty of an offence and if convicted shall be liable to imprisonment for two years or a fine of N500,000 or both.”
The head of the Federal University of Technology, Minna chapter of the Academic Staff Union of Universities, Prof. Gbolahan Bolarin, described the law in a conversation with our correspondent in Abuja on Tuesday as “dead on arrival.”
He stated that, “The problem in Nigeria is that we copy policies from other countries and want to replicate them in our country without considering the situation here. Where are the jobs in Nigeria? There are graduates from over 20 years ago who are still jobless. Now the thing about this scheme is that as you repay, another person gets access to the loan.
“Now that the scheme will provide N1m per year, suppose a student comes to FUTMinna and stays for five years. That means you will receive N5m; what is the guarantee that you will get a job to pay it back? As of today, the minimum wage is N30, 000. Is it feasible?
“From the beginning, ASUU fought against it because of these issues. There are no two ways about it; this scheme is not going to be sustainable. You can see universities hiking fees, more universities will do this because governing councils of schools are looking for ways to fund schools; before you know it, the level of enrolment in public universities will be reduced.”
Additionally, Ayodamola Oluwatoyin, an advocate for education who spoke with our correspondent in Abuja, pointed out that a law of this nature cannot be effective in Nigeria.
She said, “I am very concerned about the repayment options. In Nigeria, graduates have issues getting jobs after graduation; we are also in a country where the conditions are not favourable for business.