The Student Loans Act marks yet another embarrassing policy reversal by the Tinubu Government. The revised act, currently in National Assembly, removes some of the glaring faults of the original Act. However, the fundamental problems of student loans remain. They discriminate against poorer students, require huge bureaucratic costs and encourage corruption.
The students loan policy is based on a lie. This is that Nigeria is too poor to fund public education. The government has enough resources to fund public education if these resources were democratically-planned and managed instead of being stolen by the corrupt capitalist elite.
Student loans have failed in the US, Britain and other countries. They are an expensive and inefficient way of funding higher education that discourages students from poorer households. They also leave graduates with huge debts.
In Britain student fees are now nearly N10 million a year. The US recently had to write off many student loans as they could not collect them from the graduates. The British Government thinks it will only collect 55-60% of the student loans, but sold off some of the loans at less than half price.
Student loans have also failed in Nigeria before. In the 1970s, the federal military government promulgated the Nigerian Students’ Loans Board decree to provide funding to Nigerian students based on loans repayable in 20 years after graduation but this soon collapsed after a while due to massive indebtedness and corruption.
The more ridiculous restrictions appear to have been removed from the act. All students (not just those from very poor households) will be able to apply for a loan without supplying guarantors and the loan will not just cover fees. In addition graduates will only have to start repaying their loans if they have employment.
However, the basic problems of this approach remain. A huge bureaucracy will be required to handle all loan requests, grants, disbursement and recovery of the loans provided. A Nigerian Education Loan Fund will be created with the associate risks of looting and the probable need to settle public officers by any students applying for a loan.
The high tuition fees and associated loans will still discourage students from poorer families from going on to tertiary education. They will be frightened by the financial risks and will not be able to settle the necessary officials to obtain a loan.
Governments since at least 2000 have been grossly underfunding higher education. Buhari did not increase funding of education as he promised. This was the reason behind the long ASUU strikes by university lecturers. Last year, the budget for education was only just over 5% of the Federal budget. Tinubu is promising less than 8% for education in the 2024 budget. This is only half of the international norm of at least 15% of government budgets.
The Student Loans Act is just one example of the Neoliberal reforms supported by the IMF and World Bank that Tinubu is introducing. The others include scrapping the fuel subsidy and allowing ‘the market’ to determine the value of the naira. These reforms are of great benefit to rich people everywhere and have led to increased poverty even in Western countries.
Around 2010, the Federal Government agreed with ASUU to inject an additional N200 billion a year into tertiary education. Only one years’ funding was ever paid. The budget for student loans for this year was only N50 billion. Senators added projects worth approximately N2,280 billion into the 2024 budget. These were designed for them to ‘manage’ and so benefit from. This level of finance could have been used to properly fund tertiary education in line with international norms.
We need a united campaign against student loans, the petrol price hike and other anti-people policies. We need students and the organised working class to work together to overturn these attacks.
More details of the arguments against student loans can be found in the following free pamphlet. This was written in response to the original Students Loan Act, but still remains largely valid: https://ivavalleybooks.com/2024/01/03/10-reasons-why-student-loans-are-a-scam/
