1. INTRODUCTION

Education is the key to every national development. It will not be a gain saying that no nation can have access to development—be it political, economic, social, or otherwise—when it has no access to education, most especially for the youths of the country, who are inevitably the future of that nation and often make up the majority of the population. Indeed, education is the catalyst for all-round development through which individuals and nations as a whole can overcome ignorance, tribalism, poverty, and even insecurity.

Nelson Mandela argued that “Education is the most powerful weapon which you can use to change the world.” Taken in a narrower scope, one can say education is the most powerful weapon we can use to change Nigeria. In transforming Nigeria from its current unwanted situation, what we need is education. An access to education is indeed an access to personal and national development. Any nation that knows what is better for it will prioritize education and put all efforts to ensure that everyone has access to education despite their social class or financial status. That is to say, a better nation is a nation with a better and flexible education system where everyone can afford to go to school without compromising the quality of education.

Education is made free of charge for all and sundry in some countries, while in others, systematic approaches are put in place to make education accessible to a large number of citizens, if not all—through scholarships, education grants, allowances, or loan schemes. Nigeria is not an exception. Thus, this work briefly overviews the major provisions of the newly enacted Students’ Loan Act 2024, with a view to shedding more light on the most relevant provisions of the Act to the fingertips of every interested student. In an attempt to appreciate the strengths or otherwise of the Act, references to previous similar laws—most especially the repealed Students’ Loan Act 2023—will be inevitable.

2. THE BACKGROUND OF THE STUDENT’S LOAN ACT 2024

The new Student Loan Act 2024, also known as the Access to Higher Education Act, 2024 (hereinafter referred to as the New Act), aims to provide more access to higher education in Nigeria by addressing major challenges of the previous Student Loans Act 2023 (hereinafter referred to as the Repealed Act). Identifiable challenges of the repealed law include, but are not limited to: poor governance and management of loan funds, narrow purpose and scope of the loans, strict eligibility criteria for applicants, a rigorous and inflexible method of application, and unfavourable repayment and recovery provisions.

The new Act was enacted to cure the loopholes of the repealed Act, which was passed on 12th June 2023, just a year prior. The primary objective of the Act is to make higher education more accessible to Nigerians through student loans, ultimately aiming to provide quality education with less financial burden.

The Students Loans (Access to Higher Education) (Repeal and Re-Enactment) Act, 2024 was an Executive Bill. It was passed by both chambers of the National Assembly on 20th March 2024 and signed into law by the President on 3rd April 2024. The expediency of its passage is commendable, especially considering the fact that the previous Act lingered for 7 years in the National Assembly before it was passed in March 2023. The new Act repeals the 2023 Act, which in turn repealed the Nigerian Education Bank Act 1993, which itself repealed the Students Loans Board Act 1990.

3. ELIGIBILITY OF APPLICANTS

The eligibility criteria for applicants are more flexible under the new Act compared to the repealed one. Under the old Act, students whose parents earned more than ₦500,000 per annum were disqualified. Additionally, a student was ineligible if any of their parents had previously defaulted on any loan.

Under Section 23 of the new Act, to be eligible:

• The applicant must be a citizen of Nigeria.
• They must have secured admission into:
  • A university, polytechnic, or college of education established by the Federal or State Government, or
  • A vocational or skills acquisition school licensed by the Federal Government.
• However, beneficiaries of any Federal Government loan or scholarship scheme are disqualified.

Thus, the loan applies only to students in public institutions and not private ones. This is confirmed under Section 36 of the Act:

• "Institutions of higher learning" refer to public universities, polytechnics, colleges, and vocational schools approved by the Board.
• “Loan” applies to Federal institutions.
• “Student” means one with a valid admission into a Federal Institution of Higher Learning.

This exclusion may seem discriminatory, but it can be justified by the intent to assist students in cheaper government institutions who cannot afford even minimal tuition fees.

The Act does not set an age limit. However, since minors lack the legal capacity to enter contracts, this could pose enforcement issues unless there's a provision for guardianship or ratification upon reaching adulthood. It is submitted that age should be part of the criteria, and a clause for guardian consent in the case of minors should be included.

4. LOAN APPLICATION PROCESS

A key innovation in the new Act is the flexibility in the loan application process.

Under the repealed Act:

• Applications were submitted through the applicant's bank.
• Required documents included a cover letter signed by the VC, Dean of Students Affairs, and two qualified guarantors.

This made it tedious and inaccessible for many.

Under the new Act:

• Applications are to be made in the form and manner prescribed by the Board's guidelines (Section 23(c)).
• The Board can issue regulations each financial year, allowing adaptive procedures depending on prevailing conditions.

5. FUNDING AND MANAGEMENT OF LOAN

The General Reserve Fund is established as the funding body for the scheme, sourcing funds from:

• 1% of all FIRS-collected taxes, levies, and duties accruing to the FG.
• National Assembly appropriations.
• Loan repayments (principal + interest).
• Investment income of the Fund.
• Education bonds and debt instruments.
• Presidential grants.
• Charges, fees, donations, grants, and endowments.

Under Section 27, the loan now covers:

• Tuition and other school fees (paid directly to the institution).
• Maintenance allowance (paid directly to the student).

This is a notable improvement over the repealed Act which only covered tuition.

6. REPAYMENT OF LOAN

Being a loan, repayment is essential. The new Act provides flexible terms:

• Repayment is by monthly deduction of up to 10% of the beneficiary’s gross income.
• Repayment starts 2 years after NYSC, providing a grace period.
• If the beneficiary is unemployed, repayment may be deferred.

The Fund can only initiate recovery action after this period. (Section 28)

Employers are:

• Mandated to inquire about employees' loan status.
• Obligated to remit deductions if the employee is a beneficiary.
• Non-compliance is a criminal offence punishable by ₦2,000,000 fine, 1-year imprisonment, or both.

However, the Act:

• Does not require the debtor to disclose their loan status to the employer.
• Does not address employer obligations where the employer is a government agency.

The Fund is empowered to waive repayment where justified.

Observations:

• NYSC Clause: Not all students undergo NYSC (due to age, health, etc.). The Act should peg repayment to a fixed period like 4 years after graduation.
• Unemployed Repayment: No minimum income threshold is defined. This may subject students earning below minimum wage to unfair repayment terms.
• Interest: The Act is silent on whether loans are interest-bearing. This lack of clarity needs correction in future amendments.