Connect with us


A return to Nigerian students’ loans board of 1974, By Lawson Omokhodion



Nigeria of today has become nothing but a crime scene – Lawson Omokhodion

The judgment by the Nigerian Industrial Court asking the Academic Student Union of Universities (ASUU) to reopen the universities while the matter between the union and the Federal Government of Nigeria (FGN) is being heard in court is a welcome development. It is still too early in the day to get the reaction of both parties to the ruling.

However, the FGN has scored a public relations victory. But this is not the permanent solution to the university funding crisis because nothing has changed. The unfortunate closure of universities is bad for the students and for the public perception of the quality of Nigerian university education.

In the year 2020 there was no school because of the combined effect of ASUU strike and covid-19 pandemic and in 2022 again there is also no school because of the ASUU and FGN funding impasse. Even in years prior to this unpleasant situation, the quality of university education itself, has been perceived as a mixed bag. University education requires adequate funding because lack of needed funds puts the universities in jeopardy and turns them to mediocre institutions.

Most commentators writing on the recent calamity of having undergraduates languishing at home for seven unbroken months have either blamed ASUU or the FGN and others have blamed both. But the problem is not being solved. As the immediate past Pro-Chancellor and Chairman of Governing Council of Ambrose Alli University, Ekpoma, a 35,000-student strong state government owned university; and as a Nigerian university student in the years 1973 to 1976, I have decided to speak so that the benefits of history are not lost on those who have been tasked to provide a fair, just, adequate and sustainable solution.

It will be unfair to come out of this problem and in a few years’ time, confront a similar problem as has been the case over the years. Both ASUU and FGN must be ready to proffer a solution to avoid the imminent destruction of public university education in Nigeria. Public universities house the greatest number of undergraduates at any one time in Nigeria. They are the true Nigerian universities.

It is wrong to say that the federal government is not interested in funding education. Because without the federal government operated ‘Tertiary Education Fund (TETFUND)’, most public universities would be no better than primary schools of old. However, the government is incapable of funding universities as a stand alone. As we speak, three previous laws are important in the attempts to provide a solution. In 1974, the federal military government of General Yakubu Gowon, promulgated the Nigerian Students’ Loans Board decree to provide funding to Nigerian students based on loans repayable in 20 years after graduation. In decree no. 50 of 1993, the federal government promulgated another legislation to establish the Nigerian Education Bank.

And in the year 2004, the University autonomy bill was passed which vested in the university governing councils the rights of employers of staff of universities. It is now time to activate the essential elements of the three legislation and solve these funding problems once and for all time as most countries have done. The 1974 legislation is the biggest example of these federal laws because it was actually put into effect and students benefited immensely from the funding relief that resulted from the implementation of the provisions of the decree.

I was a part 1 student in 1973/74 at the University of Lagos and when it was time for the end of session examination crisis of fee payment broke out. Part one students like me whose parents did not have the means to settle their unpaid fees started an agitation asking the university to allow us take our end of session examinations.

We were encouraged to continue by older students who hinted us that the federal government would come to our aid. As the days went by, more senior students joined the agitations also asking for a federal government bail-out to enable all the indigent students, both new and old, to take their end of session exams. Then one morning, the university Registrar asked all the so-called indigent students to assemble at the University of Lagos quadrangle for an address. The Registrar broke the good news that the federal government had decided to clear all the school fees owed by all the poor students to enable them take their examinations. There was jubilation and thereafter the students proceeded to complete the necessary documentations.

Unknown to students at the University of Lagos, similar agitations were going on at the University of Ibadan, University of Ife (now Obafemi Awolowo University), Ahmadu Bello University, University of Nigeria, Nsukka and University of Benin. There were only six universities in Nigeria at the time and all owned by the federal government.

The federal government reprieve applied equally to all students. The examinations were done and thereafter the long vacation began. In the course of the vacation, the federal military government promulgated a decree establishing the Nigerian Students Loans Board with headquarters at Alhaji Tokan Street, Surulere – Lagos, then the federal capital city.

Students were required to obtain their application forms from their universities and could apply for an annual loan of N300; N400 or N500 depending on whether they were in a 3-year programme or longer. The loan was enough for each beneficiary to pay tuition and accommodation fees, buy meal tickets for use in the university dining halls, buy books and enough to buy a few clothes and transport self to and from school all through the year.

The funds were paid direct to the universities and each student only received the residual amount after all the necessary fees had been deducted. No money was embezzled. The students’ ability to pay school fees gave the universities enough money to meet their recurrent cost and staff salaries could be paid.

There were qualifying criteria for the student loan and it was only for students whose parents could not pay their fees. Thousands of students who came from comfortable homes did not need the loans. Many students who were either on state and federal bursaries, or on state and federal scholarships did not qualify for the loans.

There was no stigma attached because it was either you had money to pay school fees or you didn’t. There was no ASUU at the time. Even now, the federal government can decide how to fund education and it does not need ASUU or any other university staff unions to make that decision for it. All the government owes ASUU and other unions are salaries and allowances as well as make provisions for libraries and laboratories and other infrastructure. But is the federal government serious?

Several countries of the world have used the instrumentality of a federally administered loan scheme to address the subject of university funding. With adequate tuition and accommodation fees, universities can fund themselves and leave government to help the students to pay these school fees through loans. Federal government will continue to deploy resources of TETFUND for the systematic development of universities.


At present students in all state universities pay tuition fees and any university that collects tuition fees from students must not disrupt the education of these children. At Ambrose Alli University, the tuition fees and acceptance fees paid annually by newly admitted students are in excess of N5.5 billion and a lot can be done once the funds are dedicated to the use of the university annually.

When TETFUND assistance in infrastructure is factored into the equation it is obvious that our universities can go places. But prudent management both in collection and deployment of these funds depend on how responsible both Council and University administration are. And if federal and state government officials collude with university management to vandalize the resources of the university the school is doomed except an autonomous Governing Council is in place.

The question of prudent management of university resources on which I can write a book is not the subject of this article. Suffice to say that the present experience is that government officials collude with the Vice-chancellors of respective public universities to raid the resources of the universities. And when a disciplined Governing Council moves to correct such anomalies by stopping the embezzlement the concerned government merely sleep-walks into the dissolution of such councils. To aid the administration of a federal student loan scheme, the first step is for the university to determine what the tuition fees should be.

A regulatory board can determine this based on university classification. A typical public university can survive effectively on a tuition fee of N250,000 per session and an all-in annual loan of N500,000 can take a student through each academic year. At the end of a 4-year programme the student leaves the university with a debt of N2 million repayable over a 20-year period at a fixed interest rate of 1% pa. With funds availability, staff of universities are paid, students will receive lectures and our children can eat, procure books and personal items and pay for accommodation.

The present federal government posturing of a free tuition regime is a fraud, a deceit because it serves no purpose. In every university there are huge opportunities for internal revenue generation which need to be exploited. Give the indigent university students an annual loan and see what beauty our university education will become. The good old days will return.

Nigerian parents send their children to universities in North Africa and Britain every year where they pay a minimum of $40,000 (N17 million) per child and these universities have only been maintained through fees paid by students assisted via a government loan scheme for their citizens. Countries such as Australia, Canada, France, Germany, New Zealand, Thailand, South Korea, United Kingdom, United States of America, Hong Kong, Sweden and Norway operate a federal loan scheme for their poorer citizens. In the years following the 2nd world war in United Kingdom, local education authorities paid tuition fees and living costs for their citizens and under the 1962 Education Act these local authorities were mandated to give full-time university students loans to cover tuition and living cost repayable over a long period after graduation.

In Canada, a similar scheme came into existence in 1939 and was transformed in 1964 to the Canadian Student Loan Program. Students receive varying amounts for their tuition and living expenses with a long loan repayment period after graduation and while in employment. Similarly, in the United States of America, the first federal loan programme was created in 1958 called the ‘National Students Loan Scheme’. In its current state, the American scheme has been upgraded to provide different types of student loans. These wealthy and advanced countries have deemed it fit to manage their university funding system through these schemes of assistance to students. With advancement in ICT and widely spread bank branches in Nigeria, a federal student loan scheme can be easily managed and any anomalies in the 1974 federal students’ loan scheme can be readily resolved.

Nigeria has no option but to follow world best practices. A student loan scheme is the solution to the annual ASUU holidays. The payment of salaries by state or federal government to university lecturers and staff must stop with the inception of the federal students’ loan scheme. Governments may give grants and competitive funding to universities for their infrastructure as is being currently done.

ASUU should help in monitoring funds’ mobilisation and deployment by universities as they sit on councils. The qualifying criteria for eligibility for student loan should be that a student must be admitted into a Nigerian public university; parents or guardians of such students must declare their annual income and grade levels, where necessary and any student whose parents earn above an established threshold should not be eligible for a federal loan. Disbursement of such loans shall be direct to respective public universities while the residual amounts are given to the students. The tuition fees should be reviewed from time to time by the governing council and savings from these fees will be used to improve the infrastructure of the universities. In the light of current autonomy legislation, the establishment laws of all public universities should be reviewed to empower the councils as the effective final arbiter in university matters subject of course to the laws of the land.

The composition of university governing council should include representatives of the original owners of the university, including its chairman, senate of the university, ASUU and congregation, NUC member, President and a member of the Alumni association and representatives of a respected religious body not the spiritual pretenders. The present impasse between ASUU and FGN is a shame as it has no parallel under current realities. Let us wake up and move forward.

Chief Omokhodion, former MD/CEO, Liberty Bank Plc, is the immediate past Pro-Chancellor and Chairman, Governing Council, Ambrose Alli University, Ekpoma.

News continues after this Advertisement
News continues after this Advertisement