Lawmaker: Student loan scheme will be insured for deaths, abscondment

Terseer Ugbor, chairman of the house ad hoc committee on student loans, says the scheme will be insured to cover for the possible death of beneficiaries or cases of abscondment.

In June, President Bola Tinubu signed the student loan bill into law to provide financial assistance to students in tertiary institutions.

The law creates a loan fund to be serviced by 1% of Nigeria Customs Service (NCS) revenue, 1% of Nigeria Immigration Service (NIS) revenue, 1% of Federal Inland Revenue Service (FIRS) revenue, and 1% of oil profits.

The education loan fund is to be managed by the CBN through deposit money banks across the country.

However, many Nigerians have cited some grey areas in the scheme like cases where a graduate is unable to meet up with the stipulated two-year window for the commencement of repayment post-graduation due to unemployment.

Questions have also been raised about whether or not guarantors would be held liable if a loan beneficiary dies before repayment.

Ugbor, who represents Kwande-Ushongo federal constituency of Benue state, said the house of representatives is pursuing amendments to ensure the legislation backing the scheme achieves maximum impact.

He said the committee has met with relevant stakeholders including technology partners, the minister of finance, academic staff, student leaders, and insurance companies to work out proposals and amendments before 2024.

Ugbor said the committee has removed requirements hindering access to the loan beyond the basic guarantors who can now be family members or guardians.

In the case of the beneficiary’s death or willful abscondment, he said an insurance package could be tapped into.

“We’ve decided that the schemes should be fully automated. We’re currently building a platform that will make it easy for students to register. The idea is to make the process as seamless as possible and reduce human contact,” he said.

“In the case of deaths, we’ve proposed that the loan should be covered by insurance. And there should be room for debt forgiveness to cover categories of people like our armed forces servicemen who have exemplified themselves.

“In the case of abscondment, because we believe a lot of abscondment will take place in a system of this sort, the insurance companies will play a good role in ensuring that these monies are not lost by the government.

“We’ve created a system that plugs into the BVN and NIN identity system. For sure, you must repay it.

“Some of these mechanisms will ensure you repay. If you become handicapped, you can approach the board and request to restructure your loan. We’re also trying to plug into an international database, the credit bureau.

“So, if you leave the country, the debt will reflect on your credit profile.”