Mixed reactions trail students loan default penalty

• Published date: 12 January 2023
• Publication title: Nigeria - The Nation

In recent times, the rate at which students quit schooling and later venture into vices is highly alarming. These semi-educated youths go out and constitute nuisance in the name of idleness.

Most times, they attribute their actions to lack of funds and sponsorship, hence, the Federal Government in its drive to address financial constraint affecting students of tertiary institutions introduced students loan.

The National Assembly recently passed the Student Loan Bill to enable students have access to loans for their education.

The bill, which was sponsored by the Speaker of the House of Representatives, Femi Gbajabiamila, was entitled: 'A Bill for an Act to provide for easy access to higher education for Nigerians through an interest-free loan from the Nigerian Education Bank established in this Act to provide education for Nigerians and other purposes connected thereto.'

The bill seeks the establishment of the Nigerian Education Bank, which will have the powers to administer, coordinate, supervise and monitor the management of student loans in the country. It will also receive applications for student loans through higher institutions on behalf of the applicants and screen the applications to ensure that all requirements for the grant of such loans under the Act are satisfied.

Also, the bank shall have the powers to approve and disburse to qualified applicants and ensure compliance with disbursement, and monitor academic records of grantees to obtain information on their year of graduation, national service and employment to ensure that grantees of the loan commence repayment as and when due, among other functions.

According to the Act, students seeking higher education in public institutions shall have an equal right to access the loan without any discrimination arising from gender, religion, tribe, position or disability.

On the repayment plan, the bill recommended that any beneficiary of the loan to which this Act refers shall commence repayment two years after completion of the National Youth Service Corps (NYSC) programme. It also recommended that repayment shall be by direct deduction of 10 per cent of the beneficiaries' salary at source by the employer and credited to the students' loan account to be prescribed by the bank.

However, the bill also recommended two years' imprisonment, N500, 000 or both for students who default in repayment or anyone found aiding defaulters.This has elicited mixed reactions from many students.

Chairman, National Association of...