Student Loan Doesn’t Address Tertiary Education Problems — Bolaji Abdullahi

Student Loan Doesn’t Address Tertiary Education Problems -- Bolaji Abdullahi

Agora, a policy think-tank, has advised the federal government to increase funding for public tertiary institutions while implementing the student loan policy.

President Bola Tinubu enacted an initial version of the student loan policy in June 2023 to grant interest-free loans to students.

The scheme was to commence in October 2023 but implementation was repeatedly deferred until a re-enactment in April 2024.

The National Education Loan Fund (NELFund) recently scheduled the opening of the loan application and issuance portal for May 24.

But Bolaji Abdullahi, a former minister for youth development and sports, has advised the federal government to rethink the priorities.

Nigeria’s public tertiary institutions currently grapple with perennial strikes occasioned by protests over below-par remuneration, poor infrastructure, and quality assurance issues.

Contributing to the subject matter in Agora’s latest policy paper, Abdullahi said it is not wise to expand access to tertiary institutions through the student loan policy without adequately increasing funding to address subsisting inadequacies.

“Expanding access without expanding funding for the higher institutions undercuts their capacity to deliver quality education,” the policy analyst said.

“Loan or tuition does not substitute for government allocation. But the funding system should be based on per-student costing which should also reflect changes in operating costs on an annual basis.

“Using the per-student costing approach will ensure that our higher institutions have adequate funding to deliver quality education and greater value to the students and the country.”


Ghana is reported to be one of the first African countries to introduce a student loan scheme in 1971 and later Kenya in 1974.

Nigeria, in 1972, promulgated Decree No. 25, establishing the Nigerian Students Loans Board (NSLB).

By 1991, the NSLB had awarded loans amounting to about N46 million, of which only N6 million (13 percent) was recovered.

Joseph Chuta, former executive secretary of the board, had said the defaulters exploited “loopholes” in the decree to evade responsibility.

He said the NSLB could not meet administrative obligations as the perception of the loan as “national cake” became a disincentive for repayment.

To address these inadequacies, Decree No. 12 of 1988 was promulgated to decentralise the process of award and loan recovery by establishing zonal offices in Bauchi (north), Akure (west) and Port Harcourt (east) to support the NSLB’s headquarters in Abuja.

Academic institutions were further required to confirm an applicant as a “bona fide student” before loans could be granted, suggesting that non-students had at some point successfully accessed the loan.

The administrative changes yielded little results as no evidence showed the loan scheme functioned any better in recovery, Abdullahi wrote in the Agora paper.

The idea of an education bank was proposed to rid the scheme of undue political influence and give the NSLB a corporate outlook.

However, it is documented that the bank never took off. Administrative, legal, and political hurdles thwarted the student loan scheme.

Abdullahi, a one-time commissioner for education in Kwara state, said there are indications that the proponents of the new student loan scheme may be overlooking past mistakes.


He said the avalanche of applications that will ensue for the student loan policy could become challenging to deal with.

“In 1972, there were only six universities in the country, which increased to 27 (federal and state) by 1988, with a total enrolment of 159, 677 students. Yet, it was difficult to manage the number of applications to the student loans board,” Abdullahi said.

“Today, with a total of 91 federal and state universities and enrolment estimated at close to two million.”

The analyst said legal loopholes for defaulting that existed in the 1972 student loan policy still exist in the 2024 version of the policy.

“Section 3(b) allows the board to waive repayment for anyone deemed to be incapacitated. If the borrowers of student loans under the military could view it as a national cake, those borrowing under a democratic regime would also see it as dividends of democracy,” he said.

“When and if the government seeks re-election, the temptation becomes higher for people to treat the loans as political largesse.

“Also, making repayment contingent on employment is the right thing to do. But whether it is the sensible thing to do in a country where graduates are likely to be unemployed even after acquiring additional degrees, is a different question altogether .

“It is difficult to imagine that a university graduate would not find a job in the 1970s. Yet, an overwhelming majority of those who took the loans did not pay them back. This suggests that employment or lack of it is not the main factor in repayment.”


Abdullahi said the student loan policy is still replete with loopholes that open it to abuse at both award and recovery levels.

“These weaknesses should be addressed at the policy implementation level. Making the loan available to everyone potentially disadvantages those who actually need it,” he said.

“Some kind of means-testing instruments need to be developed to ensure that loans are targeted at those who need it most and recovery is also tailored to their realities.

“Student loan is a cost-offsetting instrument. It should therefore be tied to the need to increase funding to higher institutions rather than for merely expanding access.”

Federal universities, polytechnics, and colleges of education have long maintained a tuition-free approach to tertiary education.

Abdullahi said Nigeria must formalise tuition or other fees for public institutions to minimise discretionary charges.

“Loans should be combined with merit and need-based grants to make it more effective and equitable. A deliberate policy of positive discrimination needs to be adopted to reflect the needs of gender, disability and the priorities of the country,” he added.

“The scheme needs to be driven by a robust communication strategy to ensure that those who are culturally averse to loans are not excluded and to drive messages that could aid recovery.”

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