National Assembly proposes jail terms for student loan defaulters
The National Assembly passed the Student Loans (Access to Higher Education) Act (Repeal and Re-Enactment) Bill, 2024.
The Senate and the House of Representatives have carefully reviewed the report of the Committee on Tertiary Institutions and TETFund.
Last Thursday, President Bola Tinubu wrote a letter to the Senate, requesting the repeal of the existing law and submitting a new one for approval.
The announcement of a temporary suspension of the student loan scheme, which would have offered interest-free loans to students in tertiary institutions to support their studies, prompted this request.
Last week, President Bola Tinubu sent a letter to the House of Representatives, requesting the repeal and reenactment of the Student Loan Act 2023 in order to address certain obstacles that are hindering its implementation.
According to a policy brief from the President, the new bill eliminates the family income threshold, allowing Nigerian students to apply for loans and take on the responsibility of repayment as per the Fund’s guidelines.It eliminates the need for a guarantor, allowing students to easily apply for and receive loans pending their application and identity verification.
The Fund outlines the verification guidelines. Applicants to the Fund have the opportunity to apply for loans that can cover tuition, other fees payable to the school, and a maintenance allowance for the student.
As stated in the policy brief, the repayment of the loans starts once the beneficiary secures employment, regardless of the position. The Fund will refrain from commencing loan recovery efforts until two years have passed since the completion of the National Youth Service programme.
If a beneficiary wishes to extend the enforcement action by the Fund, they can do so by submitting a sworn statement confirming their unemployment and lack of income.
However, despite the inclusion of provisions for loan forgiveness in cases of death or unforeseen circumstances, the bill also specifies that individuals who provide false statements to the Fund under this section will be held accountable and may face felony charges and imprisonment.
The previous act stated that students whose parents earn N45,000 a month were not eligible to apply for the student loan. Additionally, applicants for the loan were required to have two guarantors who met specific criteria, such as being a civil servant of level 12 and above, a lawyer with ten years of post-call experience, a judicial officer.
By Nnaemeka Odenigbo
