Following President Bola Tinubu’s approval of the Student Loans (Access to Higher Education)(Repeal and Re-enactment) Act, 2024, the Presidency has explained why the previous act was revoked.
As per an explanation by the President’s Special Adviser, Ajuri Ngelale, the revoked Student Loan Act, 2023, faced issues related to governance and management, loan purpose, eligibility criteria, application method, repayment provisions, and loan recovery.
However, the explainer notes that these issues have been effectively addressed with the revised law.
Here are the details of the new act as outlined in the explanation.
- Creates the Nigeria Education Loan Fund (NELFUND) as a legal entity with the ability to take legal action and be subjected to legal action in its own name, as well as possessing the authority to obtain, possess, and dispose of movable and immovable property for its functions.
- This guarantees that the Fund can lawfully enter into contracts, including loan agreements, and may also take action to ensure repayment by beneficiaries.
- Authorizes the Fund to offer loans to eligible Nigerians for tuition, fees, charges, and maintenance during their studies at approved tertiary academic institutions and vocational and skills acquisition institutions in Nigeria.
- Establish, operate, and manage a diverse pool of funds to provide loans to qualified applicants and ensure access to higher education, vocational training, and skills acquisition.
- These changes ensure that students can request and obtain loans to cover tuition, institutional charges, and some maintenance.
- Splits the governance functions from the operational management of NELFUND by forming a board of directors with a chairman and a secretary.
- The board’s members are chosen from relevant ministries, regulatory bodies, and participating agencies, including the Federal Ministries of Finance and Education, the FIRS, NIMC, NUC, NBTE, and NCCE, as well as representatives of universities, polytechnics, colleges of education, students of tertiary institutions, and the organized private sector.
- Forms a management team led by a managing director, along with executive directors responsible for the daily management and operations of the Fund.
- The President of the Federal Republic of Nigeria appoints the Board and Management.
- Clearly defines the resource structure of the Fund by, among other things, creating the General Reserve Fund where 1 percent of all taxes, levies, and duties collected by the Federal Inland Revenue Service and accruing to the benefit of the Federal Government shall be deposited, and
- From which the Fund shall disburse amounts due as loans to eligible applicants for tuition, fees, charges, and maintenance, as well as the Fund’s operating expenses and other necessary expenditures for achieving the Fund’s goals and functions.
- Revisions to eligibility criteria for applicants
- Eliminates the family income threshold so Nigerian students can apply for these loans and assume responsibility for repayment in accordance with the Fund’s guidelines.
- The requirement for a guarantor is removed so that students can request and receive loans, following the Fund's verification guidelines for applications and identity.
- Students applying for loans can no longer be disqualified based on their parents' loan history.
- The Board is now required to ensure that a minimum number of loans are approved and given out in each financial year to make the system fair for everyone.
- People applying to the Fund can ask for loans to pay for school fees and other expenses, as well as a living allowance.
- Repayment of loans by recipients
- The Fund will not try to get the money back from the loans until two years after the National Youth Service Programme is completed.
- A recipient can ask the Fund to delay taking action to get the money back by providing a written statement saying they are not working and not earning any money.
- It is a crime for someone to lie to the Fund under this rule, and they could go to prison for three years.
- There is a provision for cancelling the loan if the person dies or if they can't repay because of a natural disaster.
