A major rejig of the student loan scheme of the Federal Government has been proposed for legislation by the National Assembly.

The new plan will ease loan access by students.

It was sent yesterday as an Executive Bill to the Senate and the House of Representatives for consideration and passage.

Yesterday would have been the official kick-off of the programme, but it was shifted indefinitely.

The new Bill seeks to scrap the Student Loan Act, which is to be substituted.

President Bola Ahmed Tinubu on June 12, 2023, signed into law the Student Loan Bill to provide interest-free loans to Nigerians seeking higher education.

It was sponsored by former House of Representatives Speaker Femi Gbajabiamila, now Chief of Staff to the President.

It was introduced in 2016 as part of measures to address the funding gaps in tertiary education.

The new Bill got expeditious consideration at the two chambers.

It spells out the funding structure and other conditions attached to the loan.

The Bill, which scaled the first and second reading on Day 1, proposes one per cent of all collectable revenue by the Federal Inland Revenue Service (FIRS) to fund the scheme.

The hurdles of a guarantor, a parent’s debt profile and others in the old Act have been removed in the new Bill, thereby making it easier for the loan to be accessed.

The Senate and House received from the President a bill which seeks to amend the Students Loan (Access to Higher Education) Act, 2023.

The President’s letter was read by Senate President Godswill Akpabio and Speaker Tajudeen Abass.

The letter is titled: “Transmission of Students Loans (Access to Higher Education) (Repeal and Reenactment) Bill 2024” and is dated March 14, 2024.

It reads: “Pursuant to Section 58(2) of the Constitution of The Federal Republic of Nigeria, 1999 (as amended), I forward, herewith, the Student Loan (Access to Higher Education) (Repeal and Re-Enactment) Bill, 2024 for the kind consideration of the House of Representatives.

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“The Student Loan (Access to Higher Education) (Repeal and Re-Enactment) Bill, 2024 seeks to enhance the implementation of the Higher Education Student Loan Scheme by addressing challenges related to the management structure of the Nigerian Education Loan Fund (NELF), applicant eligibility requirements, loan purpose, funding sources and disbursement and repayment procedures.”

The President said he hoped the bill would “receive the usual expeditious consideration of the” lawmakers.

Both chambers suspended their relevant rules and passed the Bill for first reading.

They, thereafter, referred the Bill to the Committee of the Whole where they separately considered and passed it for Second Reading.

The proposal is entitled: “A Bill for an Act to Repeal the Students Loans (Access to Higher Education) Act, 2023 and Enact the Student Loans (Access to Higher Education) Bill, 2024 to Establish the Nigerian Education Loan Fund as a Body Corporate to Receive, Manage and Invest Funds to Provide Loans to Nigerians for Higher Education, Vocational Training and Skills Acquisition and for Related Matters”.

All the lawmakers who contributed to the debate on the Bill in both chambers agreed that it should be passed as quickly as possible to boost education access.

A significant amendment being sought, according to a policy brief, includes “the establishment of the Nigeria Education Loan Fund (NELFUND) as a body corporate that can sue and be sued in its name and has the power to acquire, hold, and dispose of movable and immovable property for the purpose of its functions”.

On eligibility criteria for applicants, the new Bill removes the family income threshold to enable Nigerian students to apply for loans and accept responsibility for repayment according to the Fund’s guidelines.

It also removes the guarantor requirement so that students can apply for and receive loans subject to application and identity verification guidelines as provided by the Fund.

Student applicants can no longer be disqualified based on their parent’s loan history.

The Bill establishes a justice and fairness provision mandating the Board to ensure a minimum national spread of loans approved and disbursed in each financial year.

Applicants to the Fund may apply for loans to cover tuition and other fees payable to the school and maintenance allowance payable to the student.

On repayment of loans, the Bill indicates that beneficiaries of the Fund shall begin as soon as the beneficiary becomes employed in any capacity.

According to the brief, the Fund shall not initiate loan recovery efforts until two years after the completion of the National Youth Service Corps (NYSC) programme.

It states that a beneficiary may request an extension of enforcement action by the Fund by providing an affidavit indicating that he is not employed in any capacity and is not receiving any income.

It provides out that any person who provides a false statement to the Fund under this section is guilty of a felony and is liable to imprisonment for three years.

It makes provision for loan forgiveness in the event of death or acts of God causing inability to repay.

The brief says: “NELFUND can legally enter contracts, including loan agreements and may also initiate action to ensure repayment by beneficiaries.

“It also empowers the Fund to provide loans to qualified Nigerians for tuition, fees, charges, and upkeep during their studies in approved tertiary education institutions and vocational and skills acquisition institutions in Nigeria.

“It empowers the Fund to build, operate, and maintain a diversified pool of funds to provide loans to qualified applicants and ensure access to higher education, vocational training, and skills acquisition.”

“These changes will ensure that students can apply for and receive loans to cover tuition, institutional charges and some upkeep costs.

“It also separates the governance functions from the management operations of the NELFUND by establishing a Board of Directors with a Chairman and Secretary.

“The board’s members are drawn from the relevant ministries, regulatory bodies, and participating agencies, including the Federal Ministries of Finance and Education, the Federal Inland Revenue Service (FIRS), National Identity Management Commission (NIMC), National Universities Commission (NUC), National Board for Technical Education (NBTE), and National Commission For Colleges of Education (NCCE), as well as representatives of universities, polytechnics, and colleges of education, students of tertiary institutions, and the organised private sector.

“It also properly defines the resource structure of the Fund by, amongst other things, establishing the General Reserve Fund into which shall be paid one per cent of all taxes, levies and duties collected by the FIRS and accruing to the benefit of the Federal Government of Nigeria.”