Students’ Loan Scheme will provide more access to tertiary education, FG insists

THE Federal Government has insisted that the Student Loan Scheme recently approved by President Bola Ahmed Tinubu is designed to provide more access to tertiary education in the country.

President Tinubu had signed the Student Loan Act few days after his assumption of office. The new law elicited divergent reactions from the public, with the Academic Staff Union of Universities (ASUU), kicking that the policy may lead to introduction of high tuition fees in universities.

ASUU president, Professor Emmanuel Osodeke, said, “It is a subtle hike in tuition fees in tertiary institutions. If a student says he cannot afford the fee, he would be referred to go and take the loan.

“We are not talking about how the children of the poor will be able to access it. We know that in Nigeria, things meant for the masses are always hijacked by the rich. After graduation, the children of the rich will get jobs and those of the poor, who may benefit from the scheme, will have no job from which to repay,” he said.

The former Speaker of the House of Representatives, Rt Hon. Femi Gbajabiamila, who is now the Chief of Staff to the president, the sponsor of the Student Loan Bill, had however noted that the student loan scheme was one of the best ways to solve the problem of funding education in Nigeria.

Speaking in the same vein, the executive secretary of the Tertiary Education Trust Fund (TETFund), Arc. Sonny Echono, in an interview in Abuja, said the rationale behind the reintroduction of the students’ loan scheme was to ensure that access to tertiary education is expanded.

He revealed that some commercial banks are currently granting loans to students, including those studying abroad at very high interest rates and short duration for repayment.

According to him, tertiary education is expensive and there is no way only the government can provide free higher education to every citizen.

The TETFund boss who insisted that the provision of quality education is expensive, coupled with the increasing demands for higher wages by the workers in the system stressed that in other climes, where they are reputed for delivering quality education, funding of education is taken as a collective responsibility.

He said: “Finland, where quality education is taken as a collective responsibility, has one of the highest tax rates in the world; it takes 37 percent of your income. Everyone is made to contribute to the education of a child.

“In the US, for example, former president, Barack Obama went to one of the best schools through the student loan and it was while he was a Senator and wrote some books that he was able to defray the cost of his student loan. Likewise, the current president, Joe Biden is trying to provide some kind of relief for students who had taken loans.

“Yes, there are challenges around it, we need to acknowledge that but it is a desirable thing to do,” he said.

On what happens if a student graduates and are not employed immediately, Echono, acknowledged that the situation in Nigeria is slightly different from other developed nations where it is easier to get jobs or activate economic activities upon graduation to keep oneself employed. However, he clarified that “of course, you can only pay when you get a job.”

He added that there are some other details that the government needs to work on, especially on who manages the loan scheme; how much at a time could be drawn and what are the mechanisms in place to ensure that the money is judiciously and prudently utilised.

“There is no doubt about it, we need to make it possible for the indigent to access loans that are not exorbitant. We have student loans already; most people don’t know that there are three Nigerian banks that are already giving loans to students, including those studying abroad. However, the problem with these loans is that they are of very high interest rate and short duration,” he noted.”

He further explained that what was being proposed by the Federal Government was of longer duration, so that people can pay without feeling the impact and that the rate would not be too high.

Echono said that “by the time it is implemented, the government would be able to complement it with an educational bank. According to him, education banks should be able to give out loans to students at lower interest rates.