Overhaul of Student Loan Legislation: Key Amendments You Should Know

The National Assembly has passed the Students Loans (Access to Higher Education) Act (Repeal and Re-Enactment) Bill, 2024, following deliberations on the report of the Committee on Tertiary Institutions and TETFund. This significant development comes after President Bola Tinubu forwarded a bill seeking a complete overhaul of the existing legislation.

Less than a year since President Tinubu initially signed the Students Loan Bill into law, the legislation faced challenges prompting its return to the National Assembly for revisions. President Tinubu cited various obstacles in implementing the law, leading to criticism over missed deadlines.

In his letter addressed to the National Assembly, President Tinubu outlined the need for a comprehensive review of the legislation, emphasizing challenges related to the management structure of the Nigerian Education Loan Fund (NELF), applicant eligibility, loan purpose, funding sources, and repayment procedures.

Here are some of the key changes proposed in the new bill:

Inclusion of all students: The proposed amendment aims to address the exclusion of certain groups of students by expanding the scope of loan eligibility to cover tuition, fees, charges, and upkeep during studies in approved tertiary education institutions and vocational and skills acquisition institutions in Nigeria.

Transfer of operational powers: The bill seeks to transfer the implementation of the fund from the Governor of the Central Bank of Nigeria (CBN) to the Managing Director of the Fund, relieving the CBN Governor of administrative responsibilities outside the core mandate of the CBN.

Removing Guarantors: The new bill proposes removing the requirement for students to provide guarantors, thus easing the conditions for loan eligibility.

Children of loan defaulters: Under the proposed Act, student applicants will no longer be disqualified based on their parent’s loan history.

Repayment conditions: The bill introduces flexibility in loan repayment, stating that beneficiaries shall begin repayment as soon as they are employed in any capacity. Additionally, it provides for loan forgiveness in the event of death or acts of God causing inability to repay.

Enforcement and penalties: The proposed bill outlines provisions for loan recovery, including initiating repayment two years after the completion of the National Youth Service program. It also imposes penalties, including imprisonment, for providing false statements to the Fund.

The passage of the Students Loans (Access to Higher Education) Act (Repeal and Re-Enactment) Bill, 2024, marks a significant step towards addressing challenges in student loan accessibility and administration in Nigeria.