Implications Of Student Loan Act For Tertiary Education Access In Nigeria

On Monday 12 June, President Tinubu signed the Access to Higher Education Act 2023 into law in fulfilment of his campaign promise to institute a pilot student loan regime that will expand access to education regardless of background. Popularly known as the “Student Loan Act”, the Act seeks to provide access to interest-free loans to Nigerian students in tertiary institutions and establishes an Education Loan Fund to help Nigerians fund their higher education. The law is however silent on the minimum and maximum amount that can be obtained, limiting it only to payment of tuition fees- with an obligation to repay in instalments two years after completing the National Youth Service Corps (NYSC) programme.

Introduced as part of measures to address the education funding gap in the tertiary sector, the Act has been met with excitement on one hand and severe criticism on the other. The president of the Academic Staff Union of Universities (ASUU) Emmanuel Osodeke, described the move as the government’s attempt to ‘systematically’ wash its hands off the funding of public universities and make university education beyond the reach of poor Nigerians. Per prediction, a few days later, the Ministry of Education announced that the federal government was unable to continue funding universities, leading to an astronomical hike in tuition fees. Meanwhile, on 24 August, the president of the National Association of Nigerian Students, Usman Barambu called for a review of the Act by the legislature to ease access and reflect economic realities.

What does this mean for tertiary education in Nigeria?

Tertiary education in Nigeria is faced with a number of challenges, primarily funding with a significant impact on quality and access. Budgetary allocations are often far below UNESCO’s recommendation that 15-20% of the budgets of developing countries (like Nigeria) should go to education. Although education has the fourth largest allocation in the 2023 budget, with a total allocation of NGN 1.08 trillion (USD 2.4 billion), 5.3% of the total budget and 16% higher than the budget allocated in the 2022 budget, it still remains lower than the UNESCO recommendation. This translates to poor infrastructure, an outdated curriculum and non-payment of lecturers. Between 2021 and 2023, tertiary institutions were shut down for over ten months owing to incessant strike actions by the Academic Staff Union of Universities.

Currently, less than half of the 1.5 million candidates who take the Unified Tertiary Matriculation Examination (UTME), the entrance exams into tertiary institutions, gain admission. While a number of the candidates fail to meet the cut-off marks, many public schools lack the resources and infrastructure to accommodate all candidates. In 2019, only 612,098 of 1.8 million candidates, 33.7%, who sat for the UTME were admitted. Data from the examination administering body, Joint Admission and Matriculation Board shows that for the faculty of medicine, about 367,499 candidates applied for 43,717 available slots, in social sciences- 231,907 candidates applied for the 93,277 slots available, same as in other faculties.

According to the World Bank, as many as 4 in 10 Nigerians live below the poverty line of USD 1.9 per day. Since 2016, Nigeria has maintained its status as the poverty capital of the world. Thus, tuition fees and related expenses are often unaffordable for a significant portion of the population. The resultant effect is that many qualified students are constrained from pursuing tertiary education. The Act solves for this and would likely see an increased enrolment for students who would otherwise be unable to afford it, leading to a more developed workforce and development of the country. While the loan provides an opportunity to pursue higher education, it also comes with a responsibility for repayment. Although the Act provides for repayment to commence two years after the completion of the mandatory NYSC program, unemployment is on the rise in Nigeria, with limited guarantees of employment post-graduation or even profitable self-employment ventures. Of 21 million Nigerians—one in five people in the labour force are underemployed and the unemployment rate is projected to rise to 40.6% compared to 37.7% in 2022. This may likely worsen the debt profile of students. So, the government must play a role in enabling the sort of growth and investment that spurs job creation.

Quality of education is also a key consideration. Education- formal or informal, plays a critical role in determining employment outcomes. As such, averting the looming employment crisis demands that nations prioritise quality education and spur job creation opportunities. Poorly educated youths will remain unable to effectively participate in the workforce, regardless of years spent studying or training. While implementation of the Act may result in increased enrolments, if education quality remains poor, we would still graduate unemployable youths incapable of even repaying their loans, further clogging the labour market. This comes against the backdrop of Nigeria’s GDP per capita significantly lagging behind peer emerging markets like South Africa and China. Access to student loans is a commendable first step, but it is only one part of a multipronged solution required to revitalise tertiary institutions. More than access, there is a need to improve education quality, rehabilitate infrastructure like lecture theatres, school hostels and channel funding to these schools.

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