LAGOS, NIGERIA (VOICE OF NAIJA)- Federal Government‘s has proposed a new scheme of student loan to the National Assembly for review by promising easier access to loans for students across Nigeria.
The proposed plan, introduced as an Executive Bill to the Senate and the House of Representatives, aims to streamline the process for students to obtain loans for higher education.
Originally scheduled to commence yesterday, the program’s official launch has been postponed indefinitely.
The new legislation seeks to replace the existing Student Loan Act, signed into law by President Bola Ahmed Tinubu on June 12, 2023, with a more comprehensive framework to provide interest-free loans to Nigerian students pursuing higher education.
Spearheaded by former House of Representatives Speaker Femi Gbajabiamila, the bill was initially introduced in 2016 as part of efforts to address funding gaps in tertiary education.
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Under the proposed bill, significant changes are envisaged to facilitate loan access for students.
Notably, the requirement for a guarantor, scrutiny of a parent’s debt profile, and other hurdles present in the previous legislation are slated for removal, aiming to simplify the loan application process.
One of the key provisions of the new bill includes allocating one per cent of all collectable revenue by the Federal Inland Revenue Service (FIRS) to fund the student loan scheme. This measure aims to ensure sustainable financing for the program.
Additionally, the proposed legislation emphasizes fairness and inclusivity, removing barriers such as the family income threshold and parent’s loan history as grounds for disqualification.
Furthermore, it establishes a provision mandating a minimum national spread of loans approved and disbursed annually.
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Regarding loan repayment, beneficiaries are expected to commence repayment upon securing employment, with a grace period of two years following completion of the National Youth Service Corps (NYSC) program. The bill also allows for loan forgiveness in cases of death or unforeseen circumstances preventing repayment.
Furthermore, the proposed bill outlines the governance structure of the Nigerian Education Loan Fund (NELFUND), separating governance functions from management operations. The board of directors will comprise representatives from relevant ministries, regulatory bodies, educational institutions, students, and the private sector, ensuring effective oversight and management of the fund.
The bill also establishes the General Reserve Fund, funded by one per cent of all taxes, levies, and duties collected by the FIRS to bolster the financial stability of the program.
As lawmakers deliberate on the bill, stakeholders anticipate its swift passage to enhance access to higher education for Nigerian students and address longstanding funding challenges in the tertiary education sector.