By Jeremiah E. Aneji

Introduction

The Students Loans (Access to Higher Education) Act, 2023 recently assented to by the President of the Federal Republic of Nigeria has elicited so much excitement within the polity, primarily amongst students and their parents/guardians as they eagerly anticipate such a time when this timely intervention would be implemented so as to drive aspirations for higher educations for themselves or their wards. This excitement is not only limited to parents and their wards as direct beneficiaries of the Act, it has equally drawn the attention of members of the general public who somewhat see it in commendable light.

The excitement notwithstanding, as it is common with many Nigerians, there are unending speculations as to what the Act actually provides for, who or what body would administer or disburse the loans provided for under the Act, the criteria for eligibility, the nature/tenure of the loan and the consequences to follow in the event of a default and finally the larger implications of this intervention on the overall players in the academic.

This present author would bring you up to speed on all the issues itemized above, however in order to attain our set out objective, we will be discussing this subject in the following order;

1. An overview of the Student Loan Act, 2023.
2. Nigerian Education Loan Fund
3. The Nature of the Loan.
4. The Criteria for Eligibility Access the Loan
5. Procedure for Application
6. Repayment Plan.
7. Consequence of Default

1. An Overview Of The Students (Access To Higher Education) Loan Act

Nigeria ranks low in terms of access to basic education and by wide implications, access to higher education. As of 2021, Nigeria ranks 152 out of 187 countries in the UN’s Human Development Index, below Kenya, Ghana, Botswana, and Rwanda.ᶦ  The reasons for these low ratings are not farfetched and could be attributed to the high level of poverty and lack of will on the part of policymakers to ensure education is made affordable to the poor masses.

While the Federal governments and states largely subsidize public higher institutions of learning, the resources, and will-power to undertake such a venture
has been largely over-stretched consequent of which we have now witnessed spats of industrial actions from academic and non-academic staff unions including poor infrastructures which are not conducive for research and learning in these institutions. It cannot afford to go further to provide free higher education as would have been the case if Nigeria was a communist state. To salvage the situation, funds must somehow be placed in the hands of the indigent, the poorest of the poor, so they would not be deprived of the opportunities higher education could avail them.

The Students Loans (Access to Higher Education) Act was introduced with the intent to re-enforce the right of every indigent Nigerian to access higher education through the provision of interest-free loans. To put it succinctly, the Act in its preamble provides thus:

“An Act to repeal the Nigerian Education Bank Act Cap. NI04, Laws of the Federation of Nigeria, 2004 and enact the Students Loans (Access to
Higher Education) Act, 2023 to provide easy access to higher education for indigent Nigerians through Interest free loans from the Nigerian
Education Loan Fund established in this Act with a view to providing education for all Nigerians; and for related matters)”

The Act repealed the dormant Nigerian Education Bank Act, LFN, 2004 which was not fashioned to accommodate the funding of student loans and related matters. It provides for the establishment of the Nigerian Education Loan Fund from which the loans provided for under the Act would be pooled.

2. The Nigerian Education Loan Fund

This present Act, in repealing the former made provisions for the establishment of what is now known as the Nigerian Education Loan Fund. The Fund shall be managed and administered by the Central Bank of Nigeria (CBN) through a Special Committee and shall operate as a bank. In simple terms, the Nigerian Education Loan Fund (The Fund) is now a specialized bank with limited operations.ᶦᶦ  This is because the loans to be disbursed and repayment of the loans would not be directly made to the Fund but through an arrangement with money deposit banks. In essence, the regular banks would be the channels through which the Education Loan Fund can disburse these loans. This is contrary to the speculations that bank offices would be erected across the states for the disbursement of the loans.ᶦᶦᶦ

Administer the Nigerian Education Loan Fund

The Act provides that The Fund would be managed by a Special Committee. ᶦᵛ The Committee would become the interface between the general public and The Fund. It mandates the Governor of the Bank to set up this Special Committee which shall comprise of 11 statutory members which are;

1. The Governor of the Central Bank of Nigeria
2. The Secretary of the Fund is appointed by the Governor of the CBN.
3. The Minister of Education
4. Chairman of the Nigerian University Commission
5. A representative of the Vice Chancellors Forum of all Nigerian Universities
6. A representative from the Rectors Forums of all Nigerian Polytechnics and Provosts Forum of Colleges of Education in Nigeria.
7. The Minister of Finance or representative.
8. A representative of the Auditor-General of the Federation
9. A representative of the Nigerian Labour Congress
10. A representative from the Nigerian Bar Association
11. A representative of the Academic Staff Union of Universities (ASUU)

The mandate of this Committee is to establish regulations and guidelines for the management, administration. disbursement and recoupment of students’ loans under this Act, and all stakeholders including parents, student applicants, and beneficiaries of the students’ loans and ensure compliance by deposit banks with the regulations and guidelines so enacted.ᵛ

For the purpose of clarity, Act establishes the Fund, while the Central Bank of Nigeria constitutes the Special Committee to administer same.

Source of Generating Capital for the FUND

In our overview of this Act, we must not fail to address concerns from Nigerians as to how funds would be generated to implement the ambitious project to be undertaken by the Fund. The Act addresses this and provides that the funds shall be sourced from the following ᵛᶦ:
I. 1% of the Federal Government’s profit from Solid Minerals
II. 1% of taxes, levies, and duties accruable to the Federal Government of Nigeria.
III.Education Bonds
IV.Education Endowment Fund Scheme
V. Donations, gifts, etc., and other sources.
Having established this, we can now verge to address the questions in the hearts of many, which is who and who is qualified to access these facilities?

3. The Nature & Tenure of the Loan
The Loan to be disbursed under this Act is an interest-free loan. This is one of the most outstanding features of the law. The tenure of the loan is also flexible as repayment would commence only two years post-National Youth Service Corp program of the beneficiary. ᵛᶦᶦ

4. The Criteria For Eligibility To Access The Loans.
Nigerians ordinary from past experiences would be skeptical if the facilities would be within the reach of everyone without traces of discrimination or favouritism. This however has been addressed in the law as Section 2 of the Act specifically provides that “…all students seeking higher education in any public institution of higher learning in Nigeria shall have equal right to access the loans under this Act without any discrimination arising from gender, religion, tribe, position or disability of any kind.”

The conditions for eligibility were set out in Section 14 of the Act. These conditions are that;
I. The Applicant must have secured admission into any public higher institution in Nigeria. That is to say for one to qualify, he/she must be admitted into a Federal or State established higher institution.
II. The Applicant’s income or the income his family must be less than 500,000 naira per annum. This is what defines indigent under the Act.
III.The Applicant must be willing to produce two guarantors who should be civil servants of grade level 12, legal practitioners with 10 years post-call, judicial officers, or a justice of the peace.
It is worthy of note to state that one may not be guaranteed access to this facility despite meeting the above criteria by the Act, where he is disqualified from doing so under the Act.ᵛᶦᶦᶦ

5. Disqualification From Access to The Facility
An applicant may he/she may not if according to section 15 of the Act, he/she;
I. Is proven to have defaulted in previous loans issued by ANY organization.
II. Has been found guilty of exam malpractice by any school.
III. Being convicted of a felony or any offense involving dishonesty and fraud.
IV. Has been convicted of a drug-related offense.
V. Whose parent had previously defaulted on Student loans or any loans granted to the Applicant

6. Procedure For Application
Interested persons who have met the aforementioned criteria and are not disqualified under section 15, can apply for the loans by submitting an application
addressed to the Chairman of the Committee administering the fund. This application shall be accompanied by the following:ᶦˣ
I. A copy of the student’s admission letter
II. A letter by the guarantors addressed to the Chairman of the Committee stating their willingness to accept liability in the event of a default. Where
guarantor is self-employed, he should attach the [particulars to prove same.

A. Timeline for Approval – Upon receipt of the application, the Act mandates the Committee to communicate the status (approval or disapproval) of the
application to the applicant within 14 days.ˣ
B. Timeline for Disbursement – Where the Committee approves an application, the funds must be disbursed within 30 days of Reaching the Chairman of the Committee. ˣᶦ

7. Repayment Plan.
The Act provides for a repayment plan. As already mentioned above, the tenor of the loan is flexible, and repayment commences, two years after the National Youth Service Corp Programme of the beneficiary.ˣᶦᶦ The Act goes further to imply that the beneficiaries ought to be gainfully employed or engaged in profitable ventures for the repayment plan to be activated.
The Act for the purpose of repayment, categorizes these beneficiaries into two
groups. These groups and their method of repayment are thus:
A. The Regular Employees – 10% of Salary deducted at source from the employer who would in turn remit to the Fund. ˣᶦᶦᶦ
B. The Self-employed – 10% of the profit generated from the business would be remitted to the Fund. He/she would also disclose information such as his
business address, bank account details, Corporate Affairs Commission (CAC) business registration documents, etc., to the Committee which oversees the
Fund.ˣᶦᵛ

Under the Self-employed category, failure to disclose accurate information necessary to effect the repayment would attract criminal liability. Upon conviction, the convict would be liable to pay a fine of 500,000 naira or 2 years imprisonment or both.

8. The Consequence for Default
The law is silent on the penalty for default to pay as at when due especially when the criteria for commencement of the repayment has been met. The above
notwithstanding, Section 5(5) empowers the Committee to make regulations and guidelines for the management, and administration. disbursement and recoupment of student loans. It now behooves the Committee to fill in that lacuna.

CONCLUSION
The Students’ Loan gesture by the Federal Government is a welcome project. While there is so much to do in terms of stating a clearly defined tenor for the loans and the consequence for default, we are hopeful the Committee lives up to the responsibilities laid upon it by the Act and discharges them equitably for the overall intended objectives of the Act.

In the second part of this series, we would address various questions in the minds of Nigerians on the subject of student’s loans, prominent amongst which are:
i. Whether the loan can be stretched to cover students undertaking postgraduate studies or graduates who had previously served but are currently doing undergraduate courses.]
ii. The fin the legal implications of

DISCLAIMER:
This article is for information purposes, it may, or may not reflect the current position of the law and is therefore not intended to provide legal advice or guidance on litigation or provide commentary on any pending case or legislation.

REFERENCES
i https://copenhagenconsensus.com/publication/nigeria-perspective-education accessed on the 22/06/23
ii The Preamble & Section 5 of the Students Loans (Access to Higher Education) Act, 2023)
iii See Section 5(2) of the Act.
iv Section 7 of the Act.
v Section 5(5) of the Act
vi Section 12 of the Act.
vii Section 18(1) of the Act.
viii Section 15 of the Act.
ix Section 16 of the Act.
x Section 16(3) of the Act.
xi Section 17 of the Act.
xii Section 18(1) of the Act.
xiii Section 18(2) of the Act
xiv Section 18(4) of the Act.