The Presidency has revealed the main reasons behind the amendment of the Student Loan Act, which was signed into law by President Bola Tinubu on Wednesday, April 3, 2024.
Ajuri Ngelale, the special adviser to the President on Media and Publicity, In a statement on Thursday, explained the challenges with the previous Act and the major changes introduced by the newly enacted Student Loan (Access to Higher Education) (Repeal and Re-enactment) Act, 2024.
According to the statement, the repealed Student Loan Act, 2023, had issues related to governance and management, the purpose of the loans, eligibility criteria for applicants, the method of application, repayment provisions, and recovery of the loans.
He said the new Act addresses these shortcomings comprehensively.
According to him, one of the significant amendments was the establishment of the Nigeria Education Loan Fund (NELFUND) as a corporate body with the legal capacity to enter into contracts, including loan agreements, and initiate actions to ensure repayment by beneficiaries.
He said NELFUND is empowered to provide loans to qualified Nigerians for tuition, fees, charges, and upkeep during their studies in approved tertiary academic institutions and vocational and skills acquisition institutions in the country.
He said, “the repealed Student Loan Act, 2023, had some challenges bordering on governance and management, purpose of the loans, eligibility criteria for applicants, method of application, repayment provisions, and recovery of the loans.
“Student Loans (Access to Higher Education) (Repeal and Re-enactment) Act, 2024 sufficiently resolved the challenges highlighted above and includes the following amendments:
“Establishes the Nigeria Education Loan Fund (NELFUND) as a body corporate that can sue and be sued in its name and has the power to acquire, hold, and dispose of movable and immovable property for the purpose of its functions.
“This ensures that the Fund can legally enter contracts, including loan agreements, and may also initiate action to ensure repayment by beneficiaries.
“Empowers the Fund to provide loans to qualified Nigerians for tuition, fees, charges, and upkeep during their studies in approved tertiary academic institutions and vocational and skills acquisition institutions in Nigeria.
“Build, operate, and maintain a diversified pool of funds to provide loans to qualified applicants and ensure access to higher education, vocational training, and skills acquisition.
“These amendments ensure that students can apply for and receive loans to cover tuition, institutional charges, and some upkeep.
“Separates the governance functions from the management operations of NELFUND by establishing a board of directors with a chairman and a secretary.
“The board’s members are drawn from relevant ministries, regulatory bodies, and participating agencies, including the Federal Ministries of Finance and Education, the FIRS, NIMC, NUC, NBTE, and NCCE, as well as representatives of universities, polytechnics, colleges of education, students of tertiary institutions, and the organized private sector.
“Establishes a management team led by a managing director, including executive directors responsible for the day-to-day management and operations of the Fund.
“The President of the Federal Republic of Nigeria appoints the Board and Management.”
He said the governance and management structures have been separated, with a board of directors overseeing governance and a management team led by a managing director responsible for day-to-day operations.
According to him “the board comprises representatives from relevant ministries, regulatory bodies, and participating agencies, while the President appoints the board and management.
“The resource structure of NELFUND has been clearly defined, with 1 percent of all taxes, levies, and duties collected by the Federal Inland Revenue Service (FIRS) accruing to the General Reserve Fund.
“This fund will be used to pay loans to qualified applicants and cover operational expenses.
“Significantly, the eligibility criteria have been revised, removing the family income threshold and guarantor requirement.
“Students can now apply for loans and accept responsibility for repayment, subject to application and identity verification guidelines provided by NELFUND.
“Additionally, a student’s application can no longer be disqualified based on their parent’s loan history,” he added.
Ngelale also said the Act also establishes a justice and fairness provision, mandating the board to ensure a minimum national spread of loans approved and disbursed in each financial year.
“Applicants can apply for loans to cover tuition, fees, and maintenance allowances,” he added .
Regarding repayment, he said NELFUND cannot initiate loan recovery efforts until two years after the completion of the National Youth Service Programme.
He said “beneficiaries may request an extension of enforcement action by providing a sworn affidavit indicating unemployment and lack of income.
“Loan forgiveness is also provided for in the event of death or acts of God causing inability to repay.
The Presidency emphasized that the Act effectively removes the previous encumbrances and paves the way for protecting Nigeria’s future by ensuring that citizens have the means to fund their education, acquire critical skills, and become productive contributors to national development.
