The Student Loan (Access to Higher Education) amendment bill 2024 has been successfully passed by the House of Representatives after its third reading. This bill aims to create a legal structure for the Nigerian Education Loans Fund (NELFUND), which will be responsible for managing and distributing loans to students in need. The bill that has been passed aims to offer financial aid to eligible individuals for covering tuition fees, miscellaneous charges, and living expenses while enrolled in recognized universities, colleges, and vocational training centres in Nigeria.
It includes provisions for collecting debts from borrowers, with exceptions made by the Board based on stipulated conditions. Exemption from repayment is only possible in the event of the Loanee’s death, taking into account factors such as hardship and fairness, along with situations of impossibility or excessive burden where the costs of collection outweigh the amount owed. During the Second Reading stage of the Bill, the Senate and House of Representatives Joint Committees on Tertiary Institutions and TETfund carefully considered the notions from Distinguished Senators and Honourable Members before finalizing the bills general principles.
Disbursement and repayment procedures were addressed.
Furthermore, the Joint Committee utilized media advertisements to promote the concept of ‘constituency outreach’ within legislation, ensuring transparency and stakeholder involvement in shaping the content of the bill. To gather feedback and enhance the proposed legislation, a public hearing was held by the Joint Committee on the 18th of March, 2024. Nevertheless, the implementation of the NELFUND and the Students Tertiary Education Loan Scheme has faced setbacks due to issues arising from certain sections of the Act.
In a cover letter titled: ‘Transmission of Student loans (Access to higher education) (Repeal and Re-enactment) bill, 2024’, dated March 14, 2024, President Bola Ahmed Tinubu requested Speaker Tajudeen Abbas to swiftly review and approve the proposed revisions to the proposed amendments. He believes that the bill aims to improve how the loan program is run by tackling issues with how the NELF is organized, applicant eligibility requirements, loan purpose, funding sources and disbursement and repayment procedures.
Amendment of the bill noted new conditions of eligibility.
Also, the bill outlines the Fund’s resource structure, including the creation of the General Reserve Fund where 1% of all taxes, levies, and duties collected by the Federal Inland Revenue Service will be deposited for the benefit of the Federal Government of Nigeria. This fund will be used to provide loans for tuition, fees, charges, and living expenses to eligible applicants, as well as cover operational costs and expenses needed to achieve the Fund’s goals and functions.
Comparably, the proposal suggests adjustments to the eligibility requirements for Applicants. This includes the elimination of the family income limit for Nigerian students seeking loans, allowing them to take on the responsibility of repayment in accordance with the Fund’s guidelines. Additionally, the need for a guarantor is eliminated, enabling students to request and receive loans pending application and identity verification procedures established by the Fund. The new bill states that student applicants will not face disqualification due to their parents’ loan history. Additionally, it requires the Board to guarantee a fair distribution of approved loans across the country each year.
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Under the proposed bill, beneficiaries of the Fund are required to start repaying their loans once they secure employment. The bill also states that the Fund will only start collecting loan payments two years after the beneficiaries must have completed the National Youth Service program. Beneficiaries can seek for extended time before the Fund takes any action by submitting a sworn statement confirming they are not working or earning any income. Anyone found to have lied to the Fund in this way could face a felony charge and up to three years in prison.
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