The Olisa Agbakoba law firm has called for a review of the Student Loan Act recently signed into law by President Bola Tinubu, particularly the sections that listed the criteria for accessing education loans.

The Student Loan Bill which was sponsored by the former speaker of the 9th House of Representatives Femi Gbajabiamila, was signed into law by Tinubu as part of the federal government’s measure to boost access to higher education for Nigerians.

The development has, however, drawn mixed reactions from the relevant stakeholders in the education sector, including the Academic Staff Union of Universities, ASUU.

As stipulated in the Act, for one to be eligible for the loan, the following criteria must be met:

“Applicants must have been admitted into any Nigerian university, Polytechnics, College of Education, or any Vocational School established by the Federal and State Government of the Federation.

“Applicant or family income must be less than N500,000.00 (Five Hundred Thousand Naira) per annum.

“Applicants must provide at least Two Guarantors. Each of the Guarantors must be a Civil Servant of not less than 12 years in service, or a Lawyer with at least 10 years post-call experience; a Judicial Officer, or a Justice of Peace.”

Section 18 of Act also stated that repayment of the loan will commence two years after completion of the beneficiary’s National Youth Service Corps programme, to which a two years imprisonment or fine awaits defaulters.

The act was analysed by Babatunde Ogungbamila, a partner at Olisa Agbakoba Legal, who heads the firm’s Dispute Resolution Practice.

Ogungbamila wrote that while the Act is innovative, its implementation and operations will be difficult for indigents.

On the requirement that loan is accessible by students whose parents earn below 500,000 annually, the firm’s partner said the Act set out the financial benchmark based on current realities without anticipating future improvement in standards of living.

“The threshold for financial qualification is that applicant and their families who earn less than five hundred thousand naira every year may make the vast majority of the vulnerable unqualified. Whenever the minimum wage is reviewed for an increase, most students would be ineligible to apply for a loan because they would no longer qualify due to the increase in the minimum wage.

“The Act also fails to take into account parents who have many children attending higher institutions and are making more than Five Hundred Thousand Naira a year.

“Parents who earn above five hundred thousand naira per annum with more than one child in higher institutions may be unable to take advantage of the law,” he stated.

He advised the government to reconsider the financial threshold for qualification, so as to accommodate even parents who earn above N500,000 monthly.

He added, “The Act may have unwittingly destroyed the very fundamentals of its creation by leaving many vulnerable outside its net. With the enactment of this Act, there is a great possibility of an increase in school fees, making it difficult for individuals who are not eligible to apply for loans to pay their tuition.”

Ogungbamila explained that it will be very difficult for poor Nigerians to get lawyers with ten years of post-call experience as their guarantors.

“Further, given that the Student Loan Act is to assist poor Nigerians, the stipulation that the applicant must furnish at least two guarantors, each of whom must be a civil servant with at least 12 years of service may be an herculean task for the poor.

“It may be a big challenge for the poor to get a lawyer with ten years of post-call experience as a guarantor. How is a student who lacks the funds to complete his study going to be able to find a lawyer with ten years of post-call experience to serve as a guarantor?

“The statute has to be reconsidered because few poor Nigerians will be able to utilize this student loan program as a result of this clause,” he added.

He maintained the repayment plan is “impractical” because there is no possibility that those who pass out from the NYSC will get a good job after two years of service.

“It is not news that some graduates struggle to find employment in the years following NYSC due to a lack of job opportunities in Nigeria,” the partner stated on the firm’s official website.