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The Impacts of the Student Loan Act on Education: Prospects and Problems

The Impacts of the Student Loan Act on Education: Prospects and Problems.
By ADEBAYO, Faruq Adebayo

The Student Loan Act on education is like dark cloud gathered overhead, signaling an approaching storm that would soon engulf the town. Conversely, it is a dream planted in fertile soil, ready to bloom into a garden of success in other hand. The speculations on the prospects and problems of the Student Loan Act will surely be through the haze of uncertainty and prophetic vision by painting it a portrait of hope or despair. In either side, it is a broken mirror that reflect a future, a sign of the challenge or possibility that lay ahead which is subject to the way of its usage. This essay focuses on the positive prospects and the potential problems of the Act. By exploring these aspects, we aim to provide comprehensive understanding of the effectiveness and implication of this Act.

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The bill was introduced on the floor of the House of Representative by Hon. Femi Gbajabiamila in 2016 and was reintroduced in 2019 which later received more regards from the National Assembly in November 2022. It was signed by President Bola Tinubu on Monday June 12, 2023. The main objectives are to facilitate the mobilisation of funds to provide interest free loans to students of higher institutions in Nigeria for the payment of tuition fees; and for the purpose of providing education to all Nigerians. Just like a modern-day Prometheus, this might bring enlightenment and revolutionized the world of Education in Nigeria. The Act is STUDENTS LOANS (ACCESS TO HIGHER EDUCATION) ACT, 2023 which was used to repeal the Nigerian Education Bank Act Cap. N104, Laws of the Federation of Nigeria, 2004.

It is natural that situations are two facets, for this same reason this aspect will briefly explore the side that appeal to our desire for progress on one hand. The following are the prospects of the Act on Education.

The Nigeria economy which is sinking and dragging everyone down with it has impeded the interest of some promising individuals from continuing their academic race. The Act provides affordable options to the financial disables which may enable them to pursue higher education despite financial limitation. By implication, it reduced the financial barrier for low income students. With reduced financial barriers, enrollment rates in colleges and universities could increase, leading to a more educated workforce and potential socioeconomic benefits.

By providing manageable repayment plans, the Student Loan Act may reduce default rates and improve borrowers’ credit scores, enhancing their long-term financial stability. This point is specifically addressed in the act that ” Any beneficiary of the loan to which this Act refers shall commence repayment two years after completion of the National Youth Service Corps programme”. The burden of repayment will be lifted until the second year of service when the debtor would be independent and comfortable to ease the payment.

Human beings as a result of nature tend to be lazy and feel relent when there is no driving force. People lose focus in their workplace when they believe nothing is after them. Hence, there is low workforce output. However, a situation where a debtor is indebted to a particular institution in the course of stepping to success, it would enable graduates to focus on career development, leading to a more productive and innovative workforce.

It’s hard not to be swayed by the benefits and prospects of the Act, but we must also consider the emotional toll of the potential problems. We must also empathize with the potential drawbacks that will be faced by certain individuals.

Impact on Government spending in implementing the Student Loan Act might require substantial government funding, potentially leading to budgetary concerns and prioritization challenges. The current situation in Nigeria is in line with the famous chiamus of “look for what you will do for your country and not what your country will do for you”. All sources of fund for Nigeria meant for other developments will be shared and spent on loan. Such as: 1% of all taxes, levies and duties accruing to the Government of the Federation from Federal Inland Revenue Service (FIRS), Nigerian Immigration Service and Nigerian Customs Service; 1% of all profits accruing to the Government of the Federation arising from oil and other minerals; etc.

Increased availability of student loans might contribute to rising tuition costs, offsetting some of the act’s benefits and creating a cycle of inflation. This is beyond speculation, it has been realized in some parts of the country where the tuition fees have been skyrocketed high. Imagine Federal Universities paying One hundred thousand and above. To me, “the subsidy has gone”, because of the loan!

The ease of access to student loans might lead some individuals to overborrow, resulting in higher debt levels and financial instability post-graduation. There is one very quality attributed to Nigerians which is Over- or Hyper-. Nigerians do everything in excess and this doesn’t need any parliamentary debates. It is a common fact commonly known to us, which needs no proof.

The government is responsible to provide adequate education facilities, in the course, government should balance the pros and cons of his policies. By then, the policies will not be a blessing in disguise and their names will be whispered by generations to come.

The fund for the loan can be converted to grant for students with financial constraints. By that, the same aim will be achieved in a less hardship manner. The future of Nigeria Education will be bathed in a warm golden glow, foretelling days filled with joy and endless possibilities.

1. Students Loans(Access to Higher Education) Act 2023, s13(a)(b).
2. SLA 2023, s22(1).
3. Ibid, s18 (1).
4. ibid, s12

About the writer:
ADEBAYO, Faruq Adebayo is a passionate 300 level law student at the University of Ilorin, Kwara State. With a keen interest in human rights, constitutional law, TechLaw and Arbitration. When he isn’t buried in his law books, he writes articles on divergent topics relating to diverse fields. His dedication has earned him different awards and certifications. He is passionate of making positive change in society. Faruq looks forward to a future of advocacy and impactful legal art.

Previous Articles by the Writer:

  1. An Examination of Ouster Clauses in the Nigerian Constitution: Lessons from India (2023)
  2. From Sovereignty to Solidarity: The Evolution of jurisprudence in International relations (2023)
  3. Police Officers as agents of Debt: The view of the Law .(2022)
  4. Russian Invasion of Ukraine and the Breach of International Law (2022)
  5. Liability of a Minor in the Breach of contract.(2022)


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