Loans and grants

Student loans and tertiary education funding crisis

PRESIDENT Bola Tinubu finally signed the Student Loan Bill into law last week establishing a Nigerian Education Loan Fund from which interest-free loans would be given to indigent Nigerian youths. Long canvassed by some stakeholders to complement other funding sources, the move has nevertheless attracted vocal support and vociferous opposition in equal measure. Stakeholders should take a critical, holistic look at the crisis of funding of tertiary education in the country to avoid hasty or misguided responses that could create bigger problems.

Presidential spokesman, Dele Alake, explained that Tinubu signed the bill in fulfilment of his campaign promise to liberalise the funding of education. Actually, the bill was passed by the Ninth National Assembly, sponsored by its House of Representatives Speaker, Femi Gbajabiamila, who is now the President’s chief of staff.

The law takes “immediate effect,” but an inter-ministerial committee would be set up to work out procedures for its implementation. The Ministry of Education stated that modalities were being worked out to begin disbursement in September, as Tinubu had directed that the first recipients must be available for the 2023/2024 academic session.

This should ordinarily be cheering news, given the poverty ravaging the land and the attendant hardship faced by students from poorer homes. Indeed, the National Association of Nigerian Students has welcomed it as the “way forward,” as have Tinubu’s cheerleaders.

But others have outrightly opposed the return of a policy that was scrapped four decades ago. Some, like this newspaper, seek clarity and a seamless, well-structured and effective student funding policy, learning from the country’ past experiences and from other countries.

Moreover, the move is perceived as a precursor to charging tuition fees in federal public universities and other higher institutions. Tinubu has unambiguously declared that tuition-free higher education “is no longer realistic.” Other officials and university managements have also hinted that tuition would be charged as early as from the 2023/2024 academic session.

Taken together therefore, the swift assent to the bill and the military-style “immediate effect” flurry of confused activities to launch in September are rightly interpreted as a sop, or in official parlance, a “palliative” ahead of the introduction of tuition fees in federal tertiary institutions.

The Academic Staff Union of Universities and the Academic Staff Union of Polytechnics believe so. Emmanuel Osodeke, ASUU president, declared, “We are not in support of any move to hike fees,” as it may force many students out of school.

Given today’s realities – revenue issues, large number of students and institutions, and the sheer cost of providing facilities, staff, and services – it is obvious that the government can no longer solely bear the cost of tertiary education. Over the years, students have had to pay more for accommodation, services, feeding, transportation, and learning materials. The United Kingdom government has also cut its funding of higher education.

The best way to go is to share the burden among the federal, states, and local governments, the business community, non-profits, and charities. It should be well planned, stakeholders carried along, and a multi-pronged approach of direct funding, scholarships, bursaries, grants, and loans adopted and synchronised.

Education is too important to be toyed with by staccato policies or unplanned shock measures. Accepted as a human right, education, says the World Economic Forum, is the key to development. The World Bank adds, “Tertiary education is instrumental in fostering growth, reducing poverty, and boosting shared prosperity.”

The government is obviously not ready. Conditions spelt out in the Act to obtain the loan are tedious and the Federal Ministry of Education noted that institutions did not have the autonomy to introduce tuition fees yet. A fatal flaw in the law is that it did not identify or create any specific funding source. For a country spending 96.6 percent of its revenue servicing debt, this is shaky.

Conditions such as insisting that an applicant’s income or family income must be less than N500,000 per annum, provide at least two guarantors; each being a civil servant of at least grade level 12, a lawyer with at least 10 years post-call experience, judicial officer, or justice of the peace are recipes for corruption.

The one that a beneficiary will commence repayment two years after the completion of the National Youth Service Corps year, is patently unrealistic. The Nigerian Graduate Report 2022 found that 58.9 percent of HND graduates, 49.55 percent of OND graduates, and 39.75 percent of bachelors’ degree holders are unemployed. The National Directorate of Employment says majority of Nigerian graduates remain jobless five years after NYSC. Multinational consultancy, KPMG, said Nigeria’s unemployment rate grew from 37.7 percent in 2022 to 40.6 percent in 2023 due to the high influx of job seekers – 4.4 million annually – into the market. The repayment plan is therefore dead on arrival.

Corruption, poor management, and the non-repayment kill all intervention credit schemes in Nigeria. A students’ loan scheme introduced in 1974 with advances repayable 20 years after graduation crashed. In the United States, Forbes reported that Americans owed up to $1.7 trillion in student loan debt as of May 2023. Tinubu should imbibe the culture of meticulous planning. He needs to rationalise the federal universities, polytechnics, and colleges of education that the government has been recklessly establishing with no thought given to their funding.

Nigeria must reach into its past to recover its success in tertiary education. Then, the old regions and successor states awarded scholarships, bursaries, and grants. These were awarded for study at higher institutions at home and abroad. The Federal Government and the LGs also awarded scholarships and bursaries.

The way forward is to mobilise all tiers of government to return to that template. They should harmonise, build joint data banks so that students have a choice of either scholarship, bursary, or loan. Technology-supported infrastructure should be put in place to ensure that no beneficiary gets from more than one funding stream. This will ensure that no qualified Nigerian youth desirous of higher education is denied because of lack of funds, with space as the only constraint.

The government should also encourage charities, faith-based organisations, and NGOs to offer scholarships and bursaries. Corporate organisations should also be incentivised with tax breaks to offer grants, scholarships, and bursaries. Student loan is a good idea; but not as a standalone panacea; its implementation should be preceded by thorough planning, with realistic conditions, targets, and reliable funding sources.

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