FG rules out use of existing DMBs in disbursement of student loans

Federal Government has slated between September and October, this year as date for commencement of disbursement of student loans signed into law, by President Bola Tinubu.

This is also it ruled out using existing deposit money banks in the country for disbursement of the loans.

Permanent Secretary, Ministry of Education, David Adejo, who made this known in Abuja, Wednesday while briefing journalists on the inter-ministerial committee set up to fine-tune the recently signed student loan act, said the body will meet on June 29 to announce modalities for disbursement.

According to the Permanent Secretary, the committee’s inaugural meeting in June is also expected to ensure that the modalities for the disbursement of the student loans start by September 2023 for the 2023/2024 academic session.

“The President has approved the constitution of an inter-ministerial committee on student loan made up of the necessary ministries and agencies. The inaugural meeting will come up on Tuesday, June 20, 2023.

“The President has also directed that he wants to see that by September/October 2023/2024 academic session, he wants to see recipients of the loan so it’s a serious business,” Adejo said.

Adejo disclosed that the government would create a specialised bank for the operation of the loans, noting that there would be a tracking system for the efficient smooth running of the loans scheme.

He added that this would cover both students in Private and public schools, adding that the government would also create a new bank for it.

“We are not going to use existing banks. We are going to create a new bank that will address this because we can’t use an existing bank.

“We don’t want to make it so that only people who want to go to public schools will benefit from it, private schools are paying tuition so you have to give them the opportunity.

“We don’t want to make it so that only people who want to go to public schools will benefit from it, private schools are paying tuition so you have to give them the opportunity.

“The loan is for you to get an education programme and get employed, then you start paying back. The loan recovery does not start until you get employed.”

Speaking on reports of introduction of tuition fees, Adejo noted that Federal Government-owned universities lacked the financial autonomy to introduce tuition fees at the moment.

“Government alone cannot foot the bill for education alone and that is why we are doing public/ private partnerships. Universities are autonomous but what they don’t have yet is financial autonomy. When they get that, they will be able to answer the questions on introduction of tuitions.”

Meanwhile, a high-powered committee made up of representatives of the Academic Staff Union of Universities, the Nigeria Labour Congress, Nigerian Bar Association, Vice-chancellors forum of Nigerian universities, Rectors of polytechnics, Provosts of Colleges of Education, Ministries of Education, finance among others will be part of the board of the Student Loan Fund.

On the source of funding, it was stated in the student loan act that, “The sources of the Fund shall consist of education bonds; education endowment fund schemes; 1% of all taxes, levels and duties accruing to the Government.

“Federation from Federal Inland Revenue Service, Nigerian Immigration Service and Nigerian Customs Service; 1% of all profits accruing to the Government of the Federation arising from oil and other minerals; all sums accruing to the Fund by way of donations, gifts, grant, endowment or otherwise; and other revenue accruing to the Fund from any other source.”