Students Loan: What You Need To Know About New Bill

On Wednesday, the National Assembly approved the Students Loans (Access to Higher Education) Act (Repeal and Re-Enactment) Bill, 2024.

This decision follows individual reviews by the Senate and the House of Representatives of the report presented by the Committee on Tertiary Institutions and TETFund.

Less than a year after President Bola Tinubu initially signed the Students Loan Bill into law, it was sent back to the National Assembly for a comprehensive revision.

Over eight months, President Tinubu, who pledged to provide student loans, encountered challenges in implementing the law, leading to numerous missed deadlines and facing criticism.

Nonetheless, on Thursday, Mr. Tinubu forwarded a bill to the National Assembly, requesting the repeal and re-enactment of the legislation.

Proposed Amendments to the Students Loans Act

Addressing Exclusion:

The proposed amendment seeks to rectify the exclusion of certain student groups due to the existing law’s wording. Presently, the Act limits loans solely to tuition fees, disadvantaging federal university students who don’t pay tuition but must cover other institutional charges. The amendment expands loan eligibility to cover tuition, fees, charges, and upkeep costs.

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:

Under the current Act, the CBN Governor oversees fund administration. The proposed bill transfers this responsibility to the Managing Director of the Fund, removing the Governor’s executive role to focus on core CBN mandates.

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.”

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Removing Guarantor Requirements:

The bill aims to eliminate conditions for loan qualification, such as the need for guarantors. Additionally, it removes the income threshold disqualifying applicants and bans the discrimination of student applicants based on their parents’ loan history.

Children of Defaulters:

The proposed Act no longer bars children of defaulters from accessing loans, fostering greater accessibility and equity.

Commencement of Repayment:

Unlike the existing Act, which delays loan repayment initiation until after the National Youth Service program, the proposed bill mandates repayment commencement upon employment.

Loan Forgiveness and Extensions:

In the event of death or unforeseen circumstances preventing repayment, the proposed bill allows for loan forgiveness. Beneficiaries facing unemployment may request repayment extensions, with false statements subject to legal consequences, ensuring integrity in loan management.