AN EXAMINATION OF THE FACTORS AFFECTING STUDENTS ACCESS TO STUDENT LOAN SCHEME IN NIGERIA.

CHAPTER ONE

INTRODUCTION

Background of the study

Throughout the ages, the higher education and financial assistance systems have undergone substantial changes, motivated by the goal of making education more accessible and reducing the financial hardships faced by students. Starting with charitable scholarships during colonial times and continuing with the development of contemporary financial assistance programmes such as Stafford Loans, the progression has been characterised by significant historical events (Ayoola, 2021). 

The tertiary institutions student loan scheme is a worldwide programme designed to enhance access to post secondary education. Student loans are prevalent types of financial assistance that assist students in financing their educational expenses. Typically, these expenses encompass taking out loans to cover tuition fees, purchasing books, covering living expenses, and miscellaneous costs. Typically, these loans are paid back with interest once the student finishes their study or starts working (Mbang et al., 2018). 

The quantity of lending plans appears to be growing annually. The revived interest in Student Loans, especially in developing nations, can be attributed to a variety of reasons. Woodhall (1992), as referenced by Bassey (2018), argues that the resurgence of interest in student loan programmes can be attributed to the financial strains on public budgets. Governments are now placing greater emphasis on primary and secondary education while also attempting to promote cost-sharing in higher education. Several countries in Africa have implemented student loan programmes. These countries encompass Kenya, Rwanda, South Africa, Ghana, Botswana, Tanzania, Zimbabwe, Uganda, and more lately, Nigeria, among others.

Nigeria's previous attempts to provide student loans faced significant challenges. The Nigerian Students Loans Board (NSLB) was founded in 1972 with the objective of granting loans to economically disadvantaged Nigerian students who are studying within the country (Chuta, 1992: Moses, 2019). The aim was to assist students in attaining their educational objectives and then reimburse their loans. The directive was replaced by subsequent ones in 1976 and 1988, which allowed funding for education abroad and addressed the issues mentioned in the earlier directives.

President Bola Ahmed Tinubu implemented the Students Loans (Access to Higher Education) Act of 2023 as one of his first actions in office. The purpose of this act is to provide financially disadvantaged students with the chance to pursue higher education. The bill suggests the establishment of the Nigerian Education Bank, which will possess the power to supervise, organise, administer, and supervise student loans in Nigeria. The bank would accept loan applications from students enrolled in tertiary schools in Nigeria and carefully assess them to ensure they satisfy all the requisite criteria for loan approval as stipulated in the Act (Chinedu, 2023).

Oluwafemi (2023) argued that although the Student Loan Act appears to offer greater opportunities for economically disadvantaged students to pursue higher education by offering interest-free tuition loans, the reality is quite different when considering the conditions and requirements for obtaining these loans. Shola (2023) posits that the enactment of the 2023 Students Loans Act in Nigeria presents both prospects and difficulties for higher education. Aliu (2023) states that the scheme's objectives are to expand accessibility, alleviate financial challenges for underprivileged students, and potentially augment university finance. Nevertheless, the achievement of desired outcomes is contingent upon variables such as active involvement of stakeholders, equitable distribution of loans, and optimal programme effectiveness. Essentially, this Act has the potential to transform Nigerian higher education. However, it is crucial to engage in meticulous planning, implement effective regulations, continuously monitor progress, and ensure fair and impartial access to students in order to fully reap its advantages (Gbenga, 2023). Therefore, the necessity for this investigation arises.

Statement of the Problem

The present administration of President Bola Ahmed Tinubu implemented the federal students' Loan Scheme with the objective of offering financial assistance to economically disadvantaged students in Nigeria. Regardless of the purported efficacy of this programme as conveyed by the media, there is ample evidence to suggest that a significant majority of students in state-owned institutions, federal universities, and private colleges do not have access to this financial initiative. 

According to Henry (2023), the lending criterion may inadvertently limit the social groups it intends to assist. The current loan policy only covers tuition expenses. However, in order to apply for the loan, potential candidates must fulfil certain requirements, including providing two guarantors: a civil servant of grade 12 and a lawyer with a minimum of 10 years of experience. Unfortunately, 60 percent of loan applicants will not be able to meet these criteria. 

In addition, Okon (2023) contends that students' main difficulties in tertiary education are mostly centred on the absence of high-quality learning environments and the uncertainty of obtaining lucrative employment after graduation, despite the government's intention to offer financial assistance. In Nigeria, many students face significant challenges in obtaining the necessary education, with little prospect of securing suitable employment opportunities (Jide, 2020). It is more feasible for a camel to pass through the narrow opening of a needle than for pupils to simultaneously engage in both learning and working. Due to this rationale, students opt to pursue their studies overseas instead of studying in Nigeria, therefore forfeiting access to the loan. Nevertheless, the Academic Staff Union of Universities (ASUU), a body that advocates for Nigerian public university professors, expresses scepticism regarding the feasibility of the new programme given the nation's elevated level of unemployment among university graduates. The Punch newspaper in Nigeria has reported that over 40 percent of individuals with a Bachelor's degree and 59 percent of those with Higher National Diplomas are now without employment. Given these numbers, undergraduate students are determined to avoid incurring any debt when they graduate. Therefore, this investigation is necessary. 

1.3 Objectives of the study

The primary objective of this study is to examine the factors affecting student access to student loan scheme. Specific objectives of this study are to:

Determine the extent of awareness created for student to access the student loan scheme in Nigeria.

Examine the factors that influences students to access the student loan scheme in Nigeria.

Find out the effects of the student loan scheme on students in Nigeria.

Assess the challenges students encounter to access the student loan scheme in Nigeria

To explore the strategies for addressing challenges encountered by students to access the student loan scheme in Nigeria.

1.4 Research Questions

The following research questions which are in line with the objectives of this study will be answered in this study:

What is the extent of awareness created for student to access the student loan scheme in Nigeria?

What are the factors that influences students to access the student loan scheme in Nigeria?

What are effects of the student loan scheme on students in Nigeria?

What are the challenges students encounter to access the student loan scheme in Nigeria?

What are the strategies for addressing challenges encountered by students to access the student loan scheme in Nigeria?

1.5 Research Hypotheses

The following research hypothesis will be validated in this study:

Ho: The extent of awareness created for student to access the student loan scheme in Nigeria is low.

Ha: The extent of awareness created for student to access the student loan scheme in Nigeria is high

1.6 Scope of the study

Broadly, the study aims to carry out a critical examination of the factors affecting students access to student loan scheme in Nigeria. Specifically, this study focuses on determining the extent of awareness created for student to access the student loan scheme in Nigeria, examine the factors that influences students to access the student loan scheme in Nigeria, find out the effects of the student loan scheme on students in Nigeria, assess the challenges students encounter to access the student loan scheme in Nigeria and lastly to explore the strategies for addressing challenges encountered by students to access the student loan scheme in Nigeria

This study will be carried out in Rivers State.

1.7 Significance of the study

This study will serve as a baseline for researchers and students and also guide government, policy makers. 

This study aims to identify the barriers and facilitators that influence students' ability to access financial aid, which is essential for pursuing higher education.

This study will also provide policymakers with valuable insights into the necessary changes and enhancements required.

Finally, this study will also serve as a reference material to students and researchers for further studies and future research.

1.8 Limitations of the study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraint was the scanty literature on the subject owing that there are no much data on the topic of problems and prospects of student loan implementation in Nigeria and the parameters for measuring it in relation to whether it affects students positively or negatively. Thus, much time and organization was required in sourcing for the relevant materials, literature, or information and in the process of data collection. Also the study is limited in sample size and geography covering only Rivers State. Therefore, findings of this study cannot be used for generalization thus creating a gap for further studies. 

Also encountered was time constraint as the researcher had to carry out this research in addition to attending lectures and other educational activities required of him.

Lastly, one of the major limitation of the study is unavailability of financing for the researcher, since the researcher is a full time student and doesn’t earn to make a living.

1.9 Definition of terms

Loan: a loan is the transfer of money by one party to another with an agreement to pay it back. The recipient, or borrower, incurs a debt and is usually required to pay interest for the use of the money.

Student loan: A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses

Scheme: Scheme is a large-scale systematic plan or arrangement for attaining a particular objective or putting a particular idea into effect.

Student Loan Scheme: A Student Loan Scheme is a financial assistance initiative specifically created to assist students in covering the costs of their education. This programme often provides loans with advantageous conditions, such as reduced interest rates and adaptable repayment schedules, to finance tuition fees, textbooks, living expenses, and other educational expenditures. Typically, the government, banks, or other financial entities offer loans to students. Repayment typically starts when the student finishes their study and finds employment.