Student Loan: What You Need To Know About New Bill

Understanding the New Students Loan Bill: Key Changes and Implications.

In a significant move, the National Assembly recently passed the Students Loans (Access to Higher Education) Act (Repeal and Re-Enactment) Bill, 2024, following meticulous reviews by both the Senate and the House of Representatives. This development comes as a response to the need for comprehensive adjustments, as highlighted in the report of the Committee on Tertiary Institutions and TETFund.

Notably, less than a year after the initial signing of the Students Loan Bill into law by President Bola Tinubu, it underwent thorough reconsideration, leading to its return to the National Assembly for a complete overhaul. The process was marked by challenges, with President Tinubu encountering criticisms due to missed deadlines in implementing the policy he had championed.

However, President Tinubu recently forwarded a bill to the National Assembly, seeking the repeal and re-enactment of the existing legislation. This move was prompted by identified provisions within the law that posed obstacles to the effective initiation of the student loan project. In his communication to the National Assembly, the President emphasized the necessity for a comprehensive overhaul to address issues related to the management structure of the Nigerian Education Loan Fund (NELF), applicant eligibility criteria, loan allocation, funding sources, and repayment mechanisms.

Outlined below are some of the key amendments proposed by President Tinubu in the new bill:

1. Inclusive Student Coverage: The proposed amendment aims to rectify the exclusion of certain groups of students resulting from the restrictive wording of the current law. Unlike the existing Act, which limits loans to tuition fees only, the new bill broadens the scope to encompass various expenses incurred by students during their studies, including tuition, fees, charges, and upkeep costs.
2. Transfer of Operational Powers: Under the current Act, the administration of the fund is overseen by the Governor of the Central Bank of Nigeria (CBN). However, the new bill proposes to transfer operational responsibilities from the CBN governor to the Managing Director of the Fund, aligning with the core mandate of the CBN.
3. Removal of Guarantor Requirements: The bill seeks to eliminate stringent conditions, such as the requirement for two guarantors, which posed obstacles for students in accessing loans. Additionally, the income threshold for eligibility is expected to be revised to ensure broader access to students from diverse socioeconomic backgrounds.
4. Access for Children of Defaulters: Unlike the existing Act, which bars the children of loan defaulters from accessing loans, the proposed bill removes this restriction, thereby promoting equal opportunities for all eligible applicants.
5. Repayment Conditions: While the current Act mandates loan repayment to commence two years after the completion of the National Youth Service program, the new bill proposes repayment to begin as soon as beneficiaries secure employment. Furthermore, provisions for loan forgiveness in the event of death or extenuating circumstances are included to alleviate undue financial burdens on beneficiaries.

In summary, the proposed amendments to the Students Loan Act represent a significant step towards enhancing access to higher education for Nigerian students. By addressing existing limitations and streamlining operational procedures, the new bill endeavors to create a more inclusive and equitable framework for student loan disbursement and repayment.