The National Assembly has introduced a significant overhaul to the Federal Government’s student loan program, aiming to facilitate easier access to loans for students.
The Executive Bill, which was due to launch yesterday, has been postponed indefinitely and is now under consideration by both the Senate and the House of Representatives.
The proposed legislation, endorsed by President Bola Ahmed Tinubu on June 12, 2023, seeks to replace the existing Student Loan Act with a new framework that simplifies the loan acquisition process.
The Bill, initially sponsored by Femi Gbajabiamila, outlines a funding structure that allocates one percent of the Federal Inland Revenue Service’s collectable revenue to the student loan scheme.
Key features of the new Bill include the removal of guarantor requirements and parental debt profiles as loan conditions, thus broadening eligibility for applicants.
The Bill has swiftly passed the first and second readings in both legislative chambers.
Titled “Transmission of Students Loans (Access to Higher Education) (Repeal and Reenactment) Bill 2024,” the document details the establishment of the Nigerian Education Loan Fund (NELFUND), a corporate entity empowered to manage and invest funds for higher education loans.
The Bill’s amendments aim to address the management structure of NELFUND, refine applicant eligibility, and streamline loan disbursement and repayment procedures.
Lawmakers have expressed unanimous support for the Bill’s expedited passage to enhance educational opportunities for Nigerians.
The newly proposed student loan legislation introduces significant changes to improve access to educational funding. The guarantor requirement has been eliminated, allowing students to secure loans based on their own credentials. Additionally, a student’s eligibility will no longer be affected by their parents’ financial history.
The Bill mandates equitable distribution of loans across the nation and permits loans to cover both tuition and living expenses.
Repayment is deferred until employment is secured and will not commence until two years post-NYSC program completion. Extensions on repayment can be requested through an affidavit of unemployment or lack of income.
False statements to the Fund are penalized with felony charges, and loan forgiveness is provided in cases of death or insurmountable circumstances.
These reforms aim to make higher education more accessible and the loan process more just for all applicants.
