Stakeholders canvass implementation of Education Bank Act
For over a decade, calls for the establishment of Nigerian Education Bank has been on, but not much has been heard in terms of implementations. The 1993 Nigerian Education Bank Act mandates the bank when established to approve and disburse loans for educational purposes and matters connected therewith.
Though the bank has long been given legal backing by the Supreme Court, the legal pronouncement was never implemented.
The bank, as proposed, would, among others, meet the financial needs of less privileged teachers and students and enable average Nigerians to achieve their educational goals. It will also go a long way in alleviating the suffering of poor Nigerians who cannot afford the services of the conventional banking system.
In June 2014, a civil society group, Socio-Economic Rights and Accountability Project (SERAP) had accused the administration of then-President Goodluck Jonathan of letting down millions of poor Nigerians by failing to implement court judgments on the right to education, the latest of which ordered the Federal Government to establish the Nigerian Education Bank that would enhance access of millions of disadvantaged children to education.
SERAP, in a statement by the group’s executive director, Adetokunbo Mumuni, said Nigeria has the resources and capacity to establish the bank if the government is able to exercise the required political will.
Despite this judgment, the then administration was unable to establish the education bank. But considering the poor state of learning and teaching facilities in the nation’s tertiary institutions, coupled with incessant strikes by university teachers, stakeholders have renewed calls for the establishment of an education bank, saying it will do no harm to public universities.
According to Dr Happiness Udo, an education bank will go a long way in helping both indigent and brilliant students to access tertiary education. Citing the case of Australia, Udo said tertiary education in the country is usually funded through the HECS-HELP scheme, which is in form of loans that are paid over time through supplementary tax, using a sliding scale based on taxable income.
Under the scheme, repayments are made when the former students have graduated and started earning income.
In the United Kingdom, state-owned loan companies primarily provide loans to students. But unlike what obtains in Australia, interest begins to accumulate on each loan as soon as a student receives it, but repayment is not required until the start of the next tax year after the student either completes or abandons his education.
In the United States of America, there are two types of students’ loans: federal loans sponsored by the Federal Government and private loans, which broadly includes state-affiliated non-profit institutional loans, provided by schools. Interest does not accrue on subsidised loans, while students are still in school.
The idea of an education bank, just like the Bank of Agriculture and Bank of Industry, is long overdue. However, the concept must be well thought out and properly implemented.
This was the opinion of Professor of History, Ayodeji Olukoju, who described the proposal as ‘long overdue’, who said that government could introduce the scheme without necessarily increasing tuition in public universities.
He said, “Education is such an expensive enterprise that government on its own cannot fund it; if it must provide a quality education that is also affordable; in other words, we need more than government support to adequately fund the sector. Besides, we are doing what I call ‘massification’; we are increasing enrolment but not increasing staff strength and facilities in the universities.
“For example, my idea of an education bank is where the private university goes to take a loan at a reduced percentage, if you want to go to law or medical school and you cannot afford it, you can go there and take a loan, it is done in other countries of the world. Government can provide an avenue to fund education without necessarily increasing fees,” the former vice-chancellor stated.
Also, Dr Sam Peters, an educationist, said an education bank would assist in developing the sector.
According to him, “There is nothing wrong with education banking. In many countries, most students pursue higher education on students loans after which they pay back.”
The 1993 Nigerian Education Bank Act mandates the establishment of the bank to approve and disburse loans for educational purposes and for matters connected therewith.
One of the many challenges of Nigerian life is the huge difficulty that lies in the way of indigent students seeking to finance legitimate educational pursuits.
In spite of the increased demand caused by the ongoing economic recession, the country’s student loans system is an inefficient mishmash of inconsistent service, high default rates and arbitrary policy.
Reminding the nation of its obligations in this regard, former Vice-Chancellor Christopher University, Mowe, Ogun State, Prof Friday Ndubuisi, has called on the Federal Government to reintroduce the students’ loans board to help private university students finance their education.
With the advent of private universities, student fees can easily exceed N1 million a year. Even in the cheapest public schools, levies, dues and associated charges often approach N150, 000, excluding accommodation and feeding.
Few Nigerian universities have established loans system for newly admitted students. A few have scholarship schemes for their undergraduates who have met laid-down high educational performance targets.
Banks and other financial institutions rarely grant loans for specific educational purposes, instead they introduce dedicated savings programmes, which require sustained contributions over a long period.
The Nigerian Students Loans Board was established in 1972 and between 1973 and 1991; it provided loans totalling N46 million to help students finance undergraduate or postgraduate study. Unfortunately, the agency is not as efficient as it should be. Information about the types of student loans on offer and conditions governing their award is often hard to obtain. Besides, high rates of default and poor debt-recovery procedures have made it difficult to sustain the system.
The result is that needy students have no option other than to fall back on personal loans, inefficient state government bursary awards, and occasional philanthropy from individuals or non-governmental organisations (NGOs).
An analyst, Deolu Akinpelu, said students’ loan is imperative to provide Nigerian students with reliable, low-interest loans, with which to finance their education, as well as a fair, equitable and reliable means of repaying such loans.
With the loan scheme, Akinpelu added that schools would also be guaranteed steady income from fees, thus enabling them to rehabilitate infrastructure and build new facilities, and ultimately achieve financial autonomy. Public schools would become less dependent on the charity of the government.
“Fortunately, Nigeria now has the technological ability to monitor repayments more closely than was the case before. The mandatory Bank Verification Number (BVN) registration process in banks enables funding agencies to track beneficiaries of loans and effectively sanction defaulters.
“Nigerian students have the intelligence and commitment to attain their educational goals. All they need is the guarantee of financial assistance,” Akinpelu added.
The National Assembly is seeking to re-establish a student’s loans board targeted at students in higher institutions. There are separate bills on students’ loans and scholarships before the Senate and House of Representatives, aimed at increasing access to higher education without financial hindrances.
Former director, Federal Scholarship Board, Fatima Ahmad, said the students’ loan bill seeks to provide access to education for Nigerian students.
Ahmad said the bill would assist students, who ordinarily cannot afford to go to school. She said the major problem that affected the previous students’ loan board was insincerity on the part of some students, who took loans and refused to pay them back.
With some 30 million students of its estimated 168 million population and a literacy rate of 61 per cent, it is clear that renewed efforts must be made to set up an efficient and equitable students’ loans system.