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The Nigerian student loan legislation needs a review 14 Nov 2023

Education is now universally regarded as a fundamental human right. Many International conventions and treatises provided for this right. Article 26 of the United Nations’ Universal Declaration of Human Rights (UDHR) provides that: “Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.”

States Parties which are signatories to the International Covenant on Economic, Social and Cultural Rights (ICESCR) are enjoined by Articles 13 and 14 of the Covenant to “recognise the right of everyone to education.” They agree that “education shall be directed to the full development of the human personality and the sense of its dignity and shall strengthen the respect for human rights and fundamental freedoms.” They further agree that education shall enable all persons to participate effectively in a free society, promote understanding, tolerance, and friendship among all nations and all racial, ethnic, or religious groups, and further the activities of the United Nations for the maintenance of peace.

In this wise, States Parties to the Covenant recognise the following precepts for the full realisation of the right to education: (a) Primary education shall be compulsory and available free to all; (b) Secondary education in its different forms, including technical and vocational secondary education, shall be made generally available and accessible to all by every appropriate means, and in particular by the progressive introduction of free education; (c) Higher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free education; (d) Fundamental education shall be encouraged or intensified as far as possible for those persons who have not received or completed the whole period of their primary education; (e) The development of a system of schools at all levels shall be actively pursued, an adequate fellowship system shall be established, and the material conditions of teaching staff shall be continuously improved.

Nigeria is a signatory to these and other similar treatises but the Nigerian constitution does not expressly provide for education as a fundamental human right. The Nigerian constitution, however, recognises education as a fundamental objective and directive principle of state policy. Under Section 18 of the constitution, it is stated that “Government shall direct its policy towards ensuring that there are equal and adequate educational opportunities at all levels; Government shall promote science and technology; Government shall strive to eradicate illiteracy; and to this end Government shall as and when practicable provide (a) free, compulsory and universal primary education; (b) free secondary education; (c) free university education; and
(d) free adult literacy programme.”

Under the Childs Rights Act (Section 15), every child has the right to free, compulsory, and universal basic education and it shall be the duty of the government to provide such education. The Nigerian legislation places a duty on every parent or guardian to ensure that his child or ward attends and completes primary school and junior secondary education. After this basic education, the duty on parents and guardians is to endeavour to send the child to a senior secondary school or encourage the child to learn an appropriate trade and the employer of the child shall provide the necessaries for learning the trade. The Childs Rights Act has, however, not been domesticated by every state in the federation.

The realisation of the right of education is a social, political, and economic tool for a nation. It is one of the surest ways a nation can lift otherwise excluded citizens and adults out of poverty and build its human capital for posterity. Data from the United Nations Educational, Scientific, and Cultural Organization (UNESCO) shows that if all adults completed secondary education, globally the number of poor people could be reduced by more than half. A UN study showed that each year of schooling reduces the probability of infant mortality by 5 to 10 percent.

The right to education is also oriented towards the establishment of a more inclusive, civilised, peaceful, and harmonious cohabitation. Education is a powerful social investment in the development of personality and character, empowers the realisation of other human rights, and is therefore necessary for the development of the political, social, and economic viability of a state.

The enjoyment of this right includes equality of opportunity and access, and enforceable and monitored quality standards. It is mostly accepted that primary education should be free, compulsory, and universal; secondary education, including technical and vocational, should be generally available, accessible to all and progressively free, while higher or tertiary education be accessible to all on the basis of individual capacity and progressively free.

There are several challenges to the actualisation of the right to education, even basic primary education of the Nigerian child, including poor quality of state-sponsored education, poor infrastructure, and poverty levels in the country. The enrolment of children in primary schools is reducing, with an equally troubling high rate of dropout.

Most countries, including Nigeria, provide free primary education but tertiary education has to be paid for. It is, however, expected that equal access, including economic access, be protected. Nigeria enacted the Students Loans (Access to Higher Education) Act in June 2023. The legislation establishes the Nigerian Education Loan Fund which is to be domiciled with, managed and administered by, the Central Bank of Nigeria (CBN) through deposit money banks. The fund is to be financed from education bonds and endowment fund schemes, donations, gifts, grants, government revenue (1% of all taxes, levies and duties accruing to the government of the federation from the Federal Inland Revenue Service (FIRS), Nigeria Immigration Service, Nigeria Customs Service, 1% of all profits accruing to the government of the federation arising from oil and other minerals, and other sources.

An indigent Nigerian student (whose income or family income is less than five hundred thousand naira per annum) who has secured admission into any Nigerian public tertiary institution may apply for interest-free loans from the fund to cover tuition fees. Beneficiaries are to commence payment two years after their completion of the National Youth Service Corps (NYSC) programme, and repayment shall be by way of direct deduction of 10% from their salaries by their employers, or 10% of monthly total profit where the beneficiary is self-employed.

The concept of creating a credit scheme for indigent Nigerians to enable them to obtain tertiary education is laudable. However, considering the previous failure of similar schemes both in Nigeria and other African countries, such as Ghana, this piece of legislation appears too simplistic and hasty to achieve its aim. First, considering the fluid nature of the economy, it is not usually pragmatic for substantive legislation to prescribe specific financial brackets and conditions as done in the student loan legislation. By prescribing eligibility to applicants from households that have income of less than five hundred thousand naira, the legislation has set an unrealistic standard for establishing indigency, especially considering the change to the economy following the removal of petroleum subsidy. It is enough for the legislation to set the policy framework for the fund and empower the issuance of regulations to prescribe eligibility, application, and recovery procedures and guidelines. That way, we do not have to return to the National Assembly for the amendment of the law every time the economic conditions in the country fundamentally change.

For example, in a country where the minimum wage set in 2019 is N30,000 and the federal government approving a temporary wage increase of an additional N25,000 to low-grade workers making a total of N55,000 for low-grade workers, the prescription of ‘indigency’ as family income of less than N500,000 per annum is unrealistic and disenfranchises a huge portion of the country that need the loan. It is important to highlight that the signing of this law came with the corresponding decision by the government to stop subsidising the costs of tertiary education in the country. This gave rise to substantial increment of fees by Nigerian universities.

With the Nigerian Labour Congress negotiating minimum wage to N100,000 to N200,000 per month, we need to take another look at the Students Loans Act. There has been no information given as to the constitution of the Special Committee pursuant to the Act or the creation of the fund at the CBN. Beyond signing the bill into law, there has been no indication of the level of political will of this administration to implement the law. It would have provided more succour to Nigerians to have the Students Loans Scheme in operation for a period of time before the implementation of the decision to stop subsidising the costs of tertiary education in the country.

The student loan initiative is much needed. However, its legal and regulatory framework needs to be reviewed. The fund must be governed in manners that are procedurally clear, transparent, and accountable. Most importantly, there must be the political will to implement it.

Funmilayo Odude is a Partner at Commercial and Energy Law Practice (CANDELP).