Project – The students loan Act and higher Education Financing in Nigeria
CHAPTER ONE
INTRODUCTION
- Background to the Study
The Student’s Loan Act is an Act of the Parliament that makes it possible for Nigerian students to access zero interest loans to enable them pay for institutional charges and upkeep to any higher institution of their choice within Nigeria. The Students Loan Act (SLA) of Nigeria, enacted in 2004, was designed to provide financial assistance to Nigerian students in higher education through loans repayable after graduation. Scholars have widely examined the act’s impact on access to tertiary education, with many acknowledging its role in alleviating immediate financial barriers for students (Okebukola, 2007). However, the perceptions surrounding the SLA vary significantly among stakeholders. While some students and educational administrators view the loan scheme as a positive step towards democratizing education (Okojie, 2010), others critique it for inadequate funding and poor implementation strategies that limit its effectiveness (Oduwaiye & Olaniyan, 2017).
One key challenge highlighted in the literature is the inadequate coverage and limited awareness of the Students Loan Scheme among potential beneficiaries. Research by Adekunle and Akinyemi (2019) reveals that a substantial number of students in public universities remain uninformed about the application process, eligibility criteria, and repayment conditions. This lack of awareness directly affects the uptake of the loan program, limiting its potential to improve access to higher education. Additionally, the cumbersome bureaucratic process for loan disbursement has been frequently criticized as a hindrance to timely funding, which affects students’ academic progression (Nwagwu, 2016).
Another pressing challenge discussed is the sustainability of the loan scheme. The SLA was intended to be a revolving fund, whereby repayments from graduates would finance new loans for incoming students. However, poor loan recovery rates have jeopardized this sustainability model (Fasasi, 2018). Many graduates delay repayment or default entirely due to unemployment, underemployment, or dissatisfaction with the loan terms. Consequently, the fund faces continuous depletion, raising questions about the government’s ability to maintain long-term financing for higher education through this model (Adedeji & Babatunde, 2020).
From a policy perspective, scholars argue that the Students Loan Act requires urgent reforms to enhance its efficiency and sustainability. Oyedele (2021) suggests that integrating modern technology in loan management and adopting flexible repayment plans tailored to graduates’ income levels could improve recovery rates. Furthermore, expanding the funding pool through partnerships with private sector stakeholders could provide additional capital and reduce the sole reliance on government funds. These policy innovations are deemed necessary to ensure that the loan scheme remains viable in the face of Nigeria’s growing demand for tertiary education (Igbinedion & Adepoju, 2022).
Project – The students loan Act and higher Education Financing in Nigeria