The New President of Nigeria just signed the student loan bill into law. This means that students can not access loans to pay their school fees. With so many people having thoughts of their one regarding the loans, I should pen down mine, also. We must understand what the student knows and who could access it while discussing how the repayment plan has been structured.
What is a Student Loan, and who can assess it?
A student loan is a type of loan which learners/ students can access in order to settle their school bills and expenses in the course of school. This student loan is usually a zero-interest rate policy type of loan, and the students who have accessed the land are always expected to pay back without interest and for a very long period of time.
These loans are usually different as only students are allowed to access them, and it is only meant to pay a school's fees and bills. Unlike other loans, such as mortgage loans with certain interest accumulated, the student is free of that.
The student loans work if the student already has admission to a public tertiary institution within the condiment of the state. In the case of Nigeria, the tertiary institutions cover the Public university, polytechnics, colleges of education and other public technical skills schools.
The Nigerian government has structured these loans to be accessed by the student whose parent's income is less than 500,000 Naira yearly. This is the major requirement to have access to this. Also, students are to provide sureties who act as guarantors, and this could be a civic servant of over 10 years or a legal practitioner with over 10 years of experience.
Repayment of the loan is flexible as students could pay for the loan access after two years of finishing school and must also have been working. Students can only start paying once they secure a job after two years of finishing school, and they are expected to remit 20% of their salary.
What is the Importance of this loan and the benefits?
Before Loan, most people see loans as a bad thing, and they try to avoid it. The most successful corporation and business men rely on these loans. They know that it serves as a means to an end while also giving them leverage and the opportunity to do more or take more investment opportunities that may arise. The average Nigerian does not see it that way, and that's why this student loan is so important to change the mindset of everyone.
The greatest importance of Student loan is that it brings loans into a good light, as many can see that not all loans are bad. You can use a loan to pay forward for self-improvement while working hard to repay the accrued loan. In the case of the student loan, it is interest-free, and it has been made in such a way that repayment is easier.
The biggest benefit of this loan is that no student or no one will have an excuse for no longer being uneducated. This loan makes it easier for anyone to have full-time access to all public school education till the master's program. The good news is that you do not have to pay for two years after getting a Job.
People in rural areas who want to get educated but do not have the funds can now go to school through student loans. People whose lively hood is based on farming and other menial jobs can now get quality education and focus on education without the fear of running out of cash or funding, as all this will be taken care of.
Lastly, this student loan will help boost the educational level of the country, and many people are marginalized from having a quality education due to a lack of tuition fees. However, based on the student loan initiative, every Nigerian kid now has a rare opportunity to actualize their dreams of being a graduate from a tertiary institution, and that positions them for better jobs and good life.
The Bad, Negative or shortcomings of the student loan
The student loan is a great initiative, but I still have some reservations about it, and the reason is simple. First is that the cap of the family income being put at 500,000 is way too low, and it will exclude several people from not having the desired access to the loan. Putting it at 1 million would have been fair, but 500,000 Naira excludes many people.
Also, I have reservations about the whole idea based on proper implementation and activation. Nigeria, as we know, may sometimes rush into things without proper consultation or putting in place mechanisms which will whatever policy is created to thrive. So putting in place the key factor to allow the smooth running of these student loans has not been created on put in place. This light website, identity management, and cutting off the middlemen looking to extort students.
Lastly is the issue of Corruption and lack of proper management. Nigeria is a great country, but we have management issues as leaders and people are corrupt and always looking to get the best for themselves alone. I believe that people could see this as an opportunity to siphon public funds for their selfish gains, and that could defeat the purpose of why this was created in the first place. So the reservation I have about this is that this could lead to the rise of ghost students (Students who do not exist).
In conclusion, the student loan policy is a great policy and a great step towards eradicating education and poverty while promoting financial inclusion in the country's rural areas. All may not accept this policy, but a greater majority of the very poor segment of people will be deeply benefited. People in schools will help lower the crime rate and rate at which people engage in illegal things as they will be in school learning why they are not supposed to do them.