By Hammed Alabi Adeyemo
A 200L Nigerian student has demystified the Student loan Bill which was approved by President Bola Ahmed Tinubu two days ago.
Abdulhammed stated his opinion on the student loan on its workability, desirability and possible consequences. and implications generally.
FG STUDENT LOAN
My opinion might be different from yours and you may not align with me.
During the campaign for the 2023 election, the APC flag bearer, now President, Asíwájú Bola Ahmed Tinubu said part of his agenda is approving student loans for all students of universities/higher Institutions. He said loans will be available for students during his administration.
It’s no news again that Tinubu has signed the Student Loan Bill into Law. The Student Loan Agenda was introduced by the Former Speaker of the House of Representatives, the incumbent Chief of Staff, Femi Gbajabiamila.
📍How Does The Student Loan Work?
To summarise, the student loan is said to be available for students in any higher institution majorly for tuition fees. It will be available to students whose yearly or whose parents/guardians’ yearly income is less than five hundred thousand naira (N500,000). A bank – Education Bank – will be in charge of the supervision and disbursement of the loan.
Ways or conditions for getting the student loan are:
• Applicant must be a student in any Nigerian public higher institution.
• Applicant income or family income must be less than N500,000 per annum
• Applicant must provide at least 2 civil servants of not less than level 12 as guarantors or a Lawyer with at least 10 years post-call experience; a Judicial officer; or a Justice of Peace
• Applicant must not default any previous loans; found guilty of exam malpractice, felony, or drug offences
• Applicants’ parents must not have defaulted on previous loans
Lastly, applications for the loans will be submitted through the Students Affairs Office of each institution via a list of all qualified applicants from the institution accompanied by a cover letter signed by the Vice-Chancellor or Rector or the head of the institution and the Student Affairs.
📍How Will The Repayment Work?
A beneficiary of the loan will commence repayment two years after completion of the National Youth Service Corps programme by direct deduction of 10% of the beneficiary’s salary at source by the employer or 10% of total profit monthly to the student loan account if the beneficiary is self-employed.
📍Will One Be Able to Run Away Without Repaying The Money?
I do say that, except if they are not ready for one, it is nearly impossible to escape from government’s net. Government! “Ìjoba a mú ni m’ògùn!”
It’s impossible to escape without paying the money. Well, you can escape, but your guarantors will be held responsible. And that’s why they don’t demand ordinary people as guarantors but civil servants.
In one of the sections of the student loan bill, it is said that “a self-employed being shall, within 60 days of assuming that status, submit all information such as the name of business, address and location, registration documents, registered, name of bankers, names of partners, name of directors and shareholders to the Commission.”
This is to say, there is no escape route.
📍What If death comes early BEFORE settling the debt?
You might think the money is gone once the beneficiary dies. Though the bill hasn’t said anything as regards that, however, it is “sure” that the guarantors will be the ones to pay the money.
Or do you expect FG to let the money go once the beneficiary dies? That means FG will be incurring a whole lot of debt because “many beneficiaries will die every day.” No Lol!😂
I mean they will fake death by getting a certificate of death. After all, the amount they will use to settle officials to get a death certificate is nothing compared to the loan they want to repay (although faking death will not be possible because the system is going to be tough).
So, even if a beneficiary of the student loan dies, the guarantors will probably repay the money.
📍The Implication of the Student Loan.
By implication, I do not mean the disadvantages (I will still talk about the disadvantages) rather I meant the “real interpretation” of the student loan.
Why do we (students) need a student loan if higher education will remain as cheap as it is now?
Yes, you read rightly. Higher Education in Nigeria is cheap. Check other countries, you will see what I’m talking about.
So, the student loan is telling you that public higher institutions will soon be expensive. The Federal Government “will” not fund public higher institutions and they (Universities, Polytechnics, Colleges and so on) will be given autonomy. After all, Education Bank will be created, so do not expect less school fees.
Summarily,
Student Loan = High Cost/Expensive School Fees.
➡️
📍A Look At Student Loan In Other Countries (America as an example).
In America, the Federal Student Loan File currently totals over $1.6 trillion owed by about 43 million students/borrowers. That is roughly $40 per student/borrower.
In naira, that is over 740 trillion naira and roughly 20 thousand naira per student.
Also, a significant percentage of the suicide rate/attempt can be said to have been as a result of debt – student loan debt.
Additionally, high-debt student loan borrowers in America experienced depression.
Do you know that Education in America is expensive and many of the citizens cannot afford it? Yet, they have the highest number of students after South Korea.
This high number of students is not by accident, it’s because loans were provided.
In fact, many seek admission to schools in the USA because they know that if they don’t get scholarships, there is a student loan to explore.
South Korea has a student loan scheme too but I’m discussing America because in any 6 out of 10 argument, we compare Nigeria against America. We want to develop like America. Fine!
📍The Money That FG Want To Use To Sponsor The Student Loan, Why Can’t They Use It To Fund Education or Make Education Cheaper?
When you use a perfume you bought with your hard-earned money, how do you use it? I guess you use it like a “mtsch mtsch.”
But if you visit a friend and you want to use his perfume, how do you use it? I guess you use it like “mtscccccch mttsschhhhhhh mtsccccccccccch fuuuuuuuuuu fuuuuuuu.” Did you get the analogy?
I know that sounds funny but it’s the truth of the matter. I would have given an instance of Oyo State Government when Late Ajimobi collected N1,000 per term and now…
In Yoruba, that analogy means “Nnkan tí a bá fowó rà, kìí níyì”. Moreover, we have been told: if we think Education is expensive, try ignorance.
Is It Not That FG Want To Borrow The Money To Sponsor This Student Loan?
Do not forget that this is just my opinion, it doesn’t say that’s what FG will do.
I don’t think FG will borrow to sponsor it. Since FG would grant schools an autonomy. Money usually available for funding might be used to sponsor the Student Loan. Moreover, funds meant for the deleted “fuel subsidy” scam can be utilised.
📍How Will One Even Repay When There Is No Job
📍Student Loan And Civil Workers
Let’s keep following…
📍Cons Of Students loan
The major disadvantage of student loans is the repayment stage/duration. That one might spend almost all his lifetime after school repaying the debt.
Analogy: Let’s say someone gets a N1 million student loan and after school, he is earning N50,000 monthly. Recall that 10% of his salary will be deducted every month. This means, he will use approximately 17 years to pay back the money. Even though you can’t borrow up to “one million”
Other disadvantages might include:
• Delaying our Life Plan: Once you start using a percentage of your earnings to repay debt, you won’t be able to focus on other aspects of your life. This, might affect your plans for life.
• Student Loan Debt can make the beneficiary neglect his/her dream career and go for a high-paying job to pay the debt quickly.
• It might increase suicide rate as a result of depression caused by the fear of repayment. Negative…
• It can prevent a beneficiary from getting loan to start up a business as many banks might require him to clear his previous debt.
• If the student/borrower dies, guarantors will have to pay instead.
📍Pros of Student Loan
Some of the advantages of student loan include:
• ASUU Strike will become a thing of the past. As I have said earlier that university will be given autonomy and by that, UTAS will be removed. And once there is no ASUU strike, four years will be four years; no unnecessary extra year(s).
• Good Standard of Education. Once schools have autonomy, there won’t be any need for Mr. President to hide from ASUU or ask FG to pay the school a dime. It will be business as usual and that’ll improve our education standards (if we don’t “carry the money chop!!!”)
Since a large percentage of my audience (people reading this) are funaabites, let me site an example of funaab that they will understand.
An instance (FUNAAB Transport System)_
As a funaabite, have you ever asked any macot driver why there are so many damaged macots at the macot park and why can’t they repair them? If yes, what was their answer? Yes! They will tell you it’s FG’s property. And so, FG will be the one to repair it.
If autonomy is given to the university as a result of Student Loan, won’t the situation of macot improve?
• Number of Educated Youths will increase. The student loan will allow many to return to school because they are sure that there is Student Loan for them.
• Employment Opportunity. The student loan will force the government to create jobs and will also force the government to partner with companies and industries to create employment.
How? FG knows that you can’t repay the student loan without you having a job and they can’t afford to lose the money, so, they would be forced to create jobs, 80% at least.
• Positive Effect on Civil Workers. Recall that one of the conditions to get the loan is that yearly income must be less than N500,000. Currently, the minimum wage is N30,000 and in a year, that’s N360,000. But do you know that FG will not want children of civil workers to apply for the loan? So, if they don’t want to let them apply for it, FG has no option but to increase the minimum wage so that it won’t be less than N500,000 per annum.
Roughly, to make workers yearly income exceed N500,000, there would be N15,000 increment of the minimum wage – from N30,000 to N45,000, at least.
Naturally, everything that has advantage will surely have disadvantage. But when the advantages are heavier than the disadvantages, we go for the right choice.
To Mr. A, the disadvantages of student loan will be heavier than the advantages while to Mr. B, the advantages might be heavier than the disadvantages. That’s not a problem, we see things differently.
You will see that those who plan this Loan are brilliant and cultural. How?
In America, there is 4.99 – 6.7% interest on the student loan, but here, we have “Interest FREE Loan.”
In America, you will start paying immediately after school, but this one, you will start paying, 2 years after NYSC. You would have even established yourself to a certain level, if God blesses your struggle.
On a final note, what’s my message? Is the student loan good or bad?
Well, I can tell you categorically, that the advantages are way heavier than the disadvantages. Be optimistic and not pessimistic. Attitude Is Everything.
May The Uncreated Creator make it a blessing and not a lesson for Nigeria and Nigerians.
Hammed Alabi Adeyemo is of Federal University of Agriculture, Abeokuta (FUNAAB)