Reps propose 3% of FG revenue for funding of Students Loan

Elizabeth AtimeAugust 16, 20235 min

The proposed increase, according to Rep. Ugboh, is to enable more new students as well as those who are currently in school and may wish to also apply for a loan to cover other years of studies

 

 

Students Loan

 

The House of Representatives has proposed a 2% increment in the funding of the Students Loan Scheme from the Federal Government Revenue from the 1% lawfully stipulated.

This is as it called for the swift amendment of the Students Loan Act to enable easy access for students in tertiary institutions at all levels.

The proposal forms part of the discussion of the House Ad-hoc Committee on Students Loans and Access to Higher Education at a resumed hearing on Tuesday.

Chairman of the Ad-hoc Committee on Student Loans, Rep. Terseer Ugbor, addressing the Federal Ministry of Education and the Implementation Committee, said lawmakers are ready to provide genuine intervention for the speedy take-off of the loan scheme.

 

READ ALSO: Job Racketeering: Reps declare employment waivers as fraudulent, want it scrapped

 

Ugbor expressed displeasure at the slow implementation process of the scheme, which he said would cushion the effects of fuel subsidy removal, and asked the implementers to ensure even distribution.

“I think we might just need to amend the Students Loan Act to accommodate some of these criteria and make the scheme accessible to all. We hope the system you are creating will be robust enough to take into account, students who are already in school and want the loan to cover for the one year or two years of their schooling or students who are coming through direct entry.

It seems to us from this perspective that 1% of the Federal Government Revenue as stated in the Act, would not be enough to cover students loans for a year given the hundreds of thousands of students that we have getting admission every year and those who are currently in school who may wish to also apply for a loan to cover for other years of their schooling.

I want to suggest that if there is the need to increase the requirement of 1% to 3%, then propose that, and we are ever willing to look at it. It is something that is quite critical. This is the area that the Ministry of Education can also hold on for it to jerk up to at least 3% of this revenue.

Now we are hearing that the states or local governments may or may not permit that deduction, so I think there may be a Constitutional amendment before that 1% may be drawn. So if that is not done, the Federal Government can only draw from its own share of revenue, which means state universities may be excluded if the State Governments do not agree to participate in funding these student loans from their allocation from the Federal Government.

The issue of transparency is very vital to a scheme like this. One of the reasons why many previous schemes (student loans) failed was the issue of transparency and commitment to executing this scheme. You have to create a technologically enabling system so that the issue of godfatherism will be out.

The National Assembly is the arm of government that does appropriation and you mentioned that with the current act as it is, you suggested that there could be a supplementary budget so that this scheme can start up. But we can’t propose a supplementary budget if we don’t have an idea of what you think this student loans scheme will cost Nigeria,” he stated.

The Director of Legal Services at the Central Bank of Nigeria (CBN), Kofo Alada, who spoke for the Technical Committee, said a supplementary budget is required to make funds available for the take-off of the scheme, assuring that his team has set a target earlier than November.

“We are technical people working and the kind of process flow that we are looking at is something that Nigeria will be proud of.

What I will be requesting or recommend to this Committee is that of the funding requirement of this project, this body (parliament) has the power to convene and say we want to give a supplementary budget for this particular project, it is within your power and for anybody, it is better to plan so it is better for us to plan.

Within what has been done by you, and the 9th National Assembly what we should do is that let’s look at how we can work. That’s why we are presenting this amendment to you. I am requesting the committee that rather than giving us stillbirth, be the vehicle that will give the lift for implementation.”

READ ALSO: Student Loans Act: Reps tackle Education Ministry over non-implementation

On his part, the Permanent Secretary of the Federal Ministry of Education, David Adejoh, assured that the scheme would kick off in the 2023/2024 academic session, which may begin in October or December.

“The Assurances I give to you are based on what I see, first is that no academic session in Nigeria is starting before September. Remember, because of the strike, apart from private and some state universities; the academic calendar has been moved back.

So what we are saying now is, it might not be a 100% catchment, but, the loan is going to start in the 2023/2024 Academic Session, it can be October, it can be November depending on the school. Between October and November, we still stand a good chance.

Once the technical Committee finishes and comes to the main committee, then we will revert to the National Assembly with the clean bill. I know we can start this loan 2023/2024 Academic Session,” he submitted.

 

Elizabeth Atime

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