Home Nigeria Plugging gaps in the students’ loan scheme, By Azu Ishiekwene

Plugging gaps in the students’ loan scheme, By Azu Ishiekwene



Within minutes of the release of the video of President Bola Tinubu signing the students’ loan bill into law, it was trending on Twitter as was the name of Chief of Staff Femi Gbajabiamila, who sponsored the bill in his former life as Speaker.

Apart from the Nigeria Maritime University which was charging N81,500 per semester in 2019 – the highest in a federal university – the average tuition is about N45,000. State universities charge between N60,000 and N120,000, while polytechnics and colleges of education charge less of course, but only slightly less than federal universities.

Strangely, the word, “tuition”, does not exist in the bills of public universities. In the make-believe world of officialdom, tuition is “free”, in the sort of way that salvation is free, but the message is delivered at a cost. Universities still charge under sundry headings like acceptance fees, departmental charges, course registration, result verification and so on, but shy away from calling it tuition.

Quota misery

Private universities are in a class of their own. A number of them charge fees almost comparable to those in schools in neighbouring countries, particularly Ghana, a favourite destination of middle-class Nigerian families.

But the bulk of higher education students — in fact, about 90 per cent, according to the Joint Admissions and Matriculation Board, JAMB — are in public schools. Out of the 110 private higher institutions, only about two or three, particularly Covenant and Afe Babalola universities, are able to fill their quota. The rest are struggling.

If public institutions of higher learning are charging about N90,000, a fraction of what even those below middle class pay for their children in private secondary schools (increasingly the place of choice for Nigerians across income levels), it would seem rather awkward, if not ridiculous, that they’re unwilling to pay more for higher education.

In an article in ThisDay last September 23, former pro-chancellor of Ambrose Alli University, Lawson A. Omokhodion, said he believed that a typical public university could survive on tuition fees of N250,000 per session, whereas universities currently receive only about one-third of that as fees.

How, therefore, can students’ loans be justified under this unsustainable cost structure? I think it can, but not at the scale contemplated by the new law. And certainly not within the existing structure of the public university system. With a few exceptions, the public university system is no longer fit for purpose. The system is retrograde, stifling and under-performing.

Good money for bad

Pouring resources into the system as it currently is, whether directly, or indirectly through infusion of students’ loans, is throwing good money after bad. I’m aware that long-established systems are difficult to dismantle. But the present economic difficulties make it foolish to turn a blind eye to structural changes for temporary political benefits.

Nigeria has 49 federal universities, 59 state-government-owned universities and 110 private universities. The first two categories are under-performing and overwhelmed. It’s difficult to say exactly how much of it is a funding or management problem.

For example, federal allocations to Nigeria’s top 10 federal universities in 2023 range from N25.84 billion to Ahmadu Bello University, to N22.37 billion to the University of Lagos; and from N19.28 billion to the University of Ibadan to N14.31 billion to the Federal University of Technology, Owerri. Yet, the bulk of these sums can hardly cover overheads, a malaise that tends to highlight corruption and sheer lack of imagination.

A number of private universities are glorified secondary schools. On top of the pie sits the Tertiary Education Trust Fund, TETFund, a federal bureaucracy that struggles to find its left from its right. Except the system is fixed – and quickly – the students’ loan would at best be a waste or at worst an enabler for producing more garbage.

Students’ loan is not new in Nigeria, and is quite different from bursary which is still provided by a number of states for indigenes, and is not repayable. Some states even provide scholarships for students in specific areas of need. The students’ loan board was set up by General Yakubu Gowon’s government in 1974 to provide loans to students repayable after 20 years of graduation. At the time, the loans were disbursed to students through the universities.

Beneficiaries of state or Federal Government bursaries were excluded from the loans, which targeted the poorest of the poor. But then there were only six Federal Government universities with an estimated total student population in 1970/71 of about 16,000.

In 1993, the military promulgated a decree to establish the Nigeria Education Bank and eight years later the university autonomy bill was passed, which was supposed to unleash the creative capacity of the schools, but sadly this has not been the case.

The state of our universities reminds me of what Israeli Prime Minister, Benjamin Netanyahu, once told university administrators at a time when he had to tackle Israel’s backwardness and unleash its innovative and creative spirit.

“Even though I have the utmost respect for the study of humanities,” he said, “If I had to share government shekel between Tibetan poetry and microelectronics, I would have no hesitation putting the money in the latter.”  Nigeria’s institutions of higher learning, especially public universities, have lost their way, led astray by the military, politicians, and sadly, university administrators, too.

STEM the tide

For a start, the federal university system has to be dismantled and reduced to only two or three per zone, at least one of which should be devoted to STEM, the study of science, technology, engineering and mathematics.

The rest can be taken up by either state governments who wish to do so and can afford it or may reorganise into autonomous units for teaching special skills. It’s only after such a restructuring that students’ loans can make any significant long-term impact. And the loan cannot and should not be for all courses, as is contemplated in the current law.

It should be restricted to only students in any of the STEM courses rather than making it an all-comers affair.  Also, as it was in the Gowon era, and for wider coverage, beneficiaries of bursary should be excluded and universities must start charging tuition and betting on outstanding STEM students and innovators.

The financial threshold for the students’ loans should also be adjusted from applicants/families earning less than N500,000 yearly to those earning N720,000 or less. Over time, schools with a demonstrable capacity to attract higher endowments could get slightly more than others.

I find it difficult to understand the rationale for having the Education Bank branches in all 36 states of the country as proposed by the law, if the loans will be disbursed through the schools to the students. With a strong ICT backbone, the country does not need more than two branches of the bank at this time.

Boards of the numerous parastatals, MDAs and commissions are some of the major public sector waste pipes. We don’t need another 12-member board with all the costs attached to compound our misery.

I understand the temptation among politicians to milk every opportunity, including this one. The branches would yet be fresh dumping grounds for incompetents dispatched by politicians either to fill quotas or to settle IOUs. The danger in multiplying branches, however, is that they would also multiply bureaucracy, inefficiency and sooner than later, we might be spending funds set aside for students’ loans to service overheads.

The bank board should be leaner. I honestly do not know what the Nigeria Labour Congress (NLC) and the Nigerian Bar Association (NBA) and the Academic Staff Union of Universities (ASUU) are doing there, whereas the National Association of Nigerian Students is excluded. It doesn’t make sense.

The law is a good start but needs to be saved from the surrounding ruins to be useful to students and serviceable to the schools.

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