NASS approves student loan bill with imprisonment clause for defaulting students
The Students Loan Bill recently passed by the National Assembly, recommends two years of imprisonment or a fine of N500,000, or both, for students who default on repayment or anyone found aiding defaulters, as reported by The PUNCH.
The bill, titled ‘A Bill for an Act to provide for easy access to higher education for Nigerians through an interest-free loan from the Nigerian Education Bank established in this Act to provide education for Nigerians and other purposes connected thereto,’ was sponsored by the Speaker of the House of Representatives, Femi Gbajabiamila.
Gbajabiamila, while cautioning against the condemnation of the proposed Student Loan Bank, emphasized the importance of addressing funding challenges in the country’s tertiary institutions.
According to the bill, the Nigerian Education Bank will be established to administer, coordinate, supervise, and monitor the management of student loans in the country.
The bank will receive loan applications on behalf of the applicants from higher institutions in Nigeria and screen them to ensure compliance with the loan requirements.
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The bank will have the power to approve and disburse loans to qualified applicants, monitor the academic records of the grantees, and gather information about their graduation, national service, and employment status to ensure timely repayments, among other functions.
The bill guarantees equal access to loans for all students seeking higher education in public institutions in Nigeria, without discrimination based on gender, religion, tribe, position, or disability.
Regarding the repayment plan, the bill recommends that “Any beneficiary of the loan to which this Act refers shall commence repayment two years after completion of the National Youth Service Corps program.”
The bill further proposes that repayment shall be done through a direct deduction of 10% of the beneficiaries’ salary by the employer, which will be credited to the students’ loan account, as prescribed by the bank. Self-employed individuals are required to remit 10% of their total monthly profit to the student loan account.
As stated in the bill, “Anyone in default of the provisions of sub-section 4 above or found to be aiding the default of any of the provisions of this Act is guilty of an offense and if convicted shall be liable to imprisonment for two years or a fine of N500,000 or both.”
The inclusion of punitive measures for non-repayment has generated criticism and raised concerns among the public.
However, Gbajabiamila’s cautionary statement encourages a more balanced perspective on the Student Loan Bank and its objectives.
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