Nigeria’s Student Loan: Taking Off Without a Base?
By Zikora Ibeh, A Policy & Research Officer at CAPPA
Since late last year, the launch of the student loan initiative has experienced multiple deferrals, with state authorities announcing its commencement at no fewer than three different times, with the most prospective date—as stated by its sponsor and Chief of Staff to the President, Femi Gbajabiamila—now being in a few weeks’ time. In the
interim, significant alterations have been made to the legislative framework of the scheme under the Students Loans (Access to Higher Education) Act, 2023. For instance, President Tinubu has gone ahead to instruct the Nigeria Education Loan Fund (NELFUND) management to broaden the scheme’s coverage to accommodate students interested in skill development programmes.
The stringent eligibility criteria initially required by the Act for student loan applicants, which includes securing two guarantors of notable professional standing, and falling under a specific income threshold, have also been relaxed, according to media reports. Previously, the Act mandated potential loan beneficiaries to supply at least two guarantors in the form of civil servants at or above grade 12, lawyers with a decade of post-call experience, judicial officers or
justices of peace. This raised concerns about how the criterion may exclude many deserving indigent applicants due to their lack of extensive social networks or high-status connections. Now according to the statements by the NELFUND, these requirements have been reviewed such that the entirety of the process will be technologically driven
with applicants only required to upload their details on a dedicated website.
If nothing, these delays and adjustments underscore the complex task of melding the policy into a viable framework, amid considerable doubts expressed about its workability by stakeholders in the education sector. Regrettably, the process of the student loan policy amendment has been so far shrouded in secrecy with information regarding the specifics of the revised policy is limited to sporadic media reports citing statements from legislators, the presidency, and the NELFUND management.
For the record, it is imperative to note the House of Representatives’ (HOR) response to public criticism of the flawed student loan policy framework. Reactions to the legislation necessitated the HOR to set up an Ad-hoc Committee tasked with obtaining feedback from the public and making recommendations for strengthening the policy. The Committee’s engagement with stakeholders, on August 15, 2023, at a one-day legislative summit on the issue, laid bare the manifold shortcomings of the legislation, culminating in decisive recommendations for its repeal and re-enactment, aimed at harmonizing and rectifying the identified discrepancies.
Despite news reports suggesting that troubling provisions of the policy have been reviewed, the absence of a publicly accessible document delineating these modifications casts a shadow of uncertainty over the entire reform process. This opacity has left stakeholders adrift in a sea of conjecture, uncertain whether the legislation was repealed, amended, remains untouched in its problematic form or if the changes made may also not have introduced new issues that require scrutiny. Against this backdrop, a pressing question arises: on what basis is the initiative set to launch, apparently circumventing essential democratic processes crucial for ensuring its legitimacy and the public participation that is critically important for its validation?
Unresolved Issues?
Beyond the ambiguity that shrouds the amended or re-enacted student loan framework, a critical question remains unanswered: will the scheme effectively tackle deep-seated issues afflicting the educational sector, such as funding deficits, the mass exodus of teaching talents, the dearth of research facilities, frequent staff strikes, inadequate staff remuneration, and the dilapidation of learning and hostel facilities? These factors critically impact the quality of student learning experiences and are structural problems that cannot be wished away by the student loan. Even so, the student loan framework conspicuously lacks mechanisms for grievances—vital for upholding students’ rights to obtain tangible value from their loans and for voicing concerns when educational outcomes do not meet expectations. As such, the scheme falls short of facilitating the holistic improvement of tertiary education in Nigeria, thereby undermining its potential to enhance students’ academic experiences and development.
In the final analysis, what the Nigerian government must undertake is a fundamental recalibration— a return to the basics of adequately funding the educational sector to unlock its full potential. While interventionist initiatives like the student loan fund may present an appealing facade, they scarcely tackle the root causes that have perennially constrained the educational system. This systemic oversight elucidates one of the reasons why the Academic Staff Union of Universities (ASUU) has persistently rejected the loan scheme and recently refused to sit on the management board governing the loan scheme.
Despite the challenges existing in its tertiary sector, Nigeria has the potential to nurture world-class university centers if state authorities commit to a sustained investment in education. If the government has the capacity to allocate funds to the student loan scheme from its various national coffers—tax income and profits—it undoubtedly possesses the capability to enhance funding for the educational sector.
Persistent underfunding has been identified as a critical barrier within the educational sector, with Nigeria continually failing to meet the global recommended funding benchmark of 26% of the national budget to education. In 2024, the sector’s allocation was a mere N2.18 trillion, representing only 7.9 percent of the national budget. An upward review of the budgetary allocation to education is imperative for the radical transformation of the landscape. A substantial injection into the system will not only effectively address entrenched issues that have historically undermined the sector, but also foster academic environments where emphasis is placed on quality over quantity. Ultimately, this strategic approach will guarantee the production of well-rounded individuals equipped with the necessary skills to advance society, rather than merely churning out graduates who have attended school without benefiting from a transformative educational experience.
