Nigerian Student Loan and the Education System

The introduction of a law that provides Nigerian students enrolled in public higher institutions a chance to access loans that are zero interest-based, to be paid after graduation begs for a closer look into the education system in Nigeria. For the avoidance of doubt, only students of higher institutions owned by federal or state governments stand the chance to benefit from this Nigerian student loan. 

According to Statista, as of 2023, public universities in Nigeria represent 53.5% of the total approved universities. And according to records available on the Nigerian Board for Technical Education’s website, as of January 2023, public-owned polytechnics and technical institutes constitute 51.44% of the country. Again, only 49.69% of the colleges of education in the country can benefit from this loan scheme. 

Nigerian student loan

Moreover, the loan is only accessible to the lowest of the lowest income earners in the country. According to the student loan law, only students whose annual income or that of their guardians is less than 500,000 naira can access the student loan. In a country where the minimum wage is 30,000 naira. This means only those who are completely unemployed can access the loan. 

Having established a background upon which the policy seems to be in disconnect from some basic demographic realities of the country, it is important to look into the state of these Nigerian institutions. As well as the students who will be the beneficiaries of the loan.

This essay will examine the situation in public-owned universities based on the following components:

Administrative Structure

State of Infrastructure

Tuition and Charges Fees

Academic Staff Union

Graduate Employability Prospect

  1. Administrative Structure

Nigerian universities are mostly structured at departmental, faculty/colleges, and senate levels. Where departments are the lowest and closest form of administration to the students. 

The student loan law is designed in a way that each university will compile a list of their students who require the loan. And forward it to the loaning agency through the office of the university Vice-Chancellor. Then the VC will endorse a list compiled by the Dean of Student Affairs before posting. 

This particular system raises concern for students who are familiar with the hectic nature of following through the administrative process to collect their academic transcript after graduation. To collect the transcript, many students experience unnecessary hardship and delays. 

The Nigerian Tribune published a report on the problem in 2021 titled Transcripts of FrustrationDaily Trust also reported on the same issue in their Academic Transcript Saga: A Major Rot In Our Education SystemBefore then, Business Day in 2019 wrote a report on how the endless wait for transcripts kills the dreams of many graduates who seek scholarships and other postgraduate opportunities.

On the back of this well-documented administrative lethargy by public universities in Nigeria, the introduction of a student loan that will rely on such existing mishaps, calls for more scrutiny and improvement if the student loan will have a chance at seeing the light of the day.

  1. State of Infrastructure

The state of the infrastructure in Nigerian universities is abysmally poor. These problems are very well-documented. 

According to research by Subair et al 2012, published by East African School of Higher Education Studies and Development. There is no significant difference in the level of decay in the infrastructure of either the federal or state universities in Nigeria. It may be assumed that since the federal government has a bigger financial muscle, the universities under its care will fare better. Better than those under the care of state governments with smaller financial capacity– but that is sadly not the case.

The disparity gap can be attributed to the impacts of Tertiary Education Funding by TETFund in both federal and state universities. The fund serves as a vital component of improving infrastructure in Nigerian universities. 

The Fund has allocated N30 billion for high-impact projects in 6 universities, 6 polytechnics, and 6 colleges of education in this year alone. 

But despite these interventions, the schools continue to demand higher funding and projects. 

Creating a loan scheme for students of these institutions who are already getting the barest minimum in terms of physical and technical qualities may be an overstretch. Students may have to really weigh their options before obtaining loans to attend schools that do not promise the best in terms of municipal services. 

Unless improvements are made in the infrastructure of these public universities, the option of attending them on loan may not appeal to many students. 

  1. Tuition and Charges Fees

According to University Compass, Nigerian students in federal universities generally pay less than N100,000. While state university students pay between N100,000 to N300,000 per session. Private universities that are excluded from the loan scheme charge students a lot higher than this running into millions of Naira. 

The issue here is not the amount being charged to students but the legal problem that seems to arise from the Student Loan Act. Public universities in Nigeria are basically tuition-free. No university owned by the government in Nigeria charges its students any tuition fee. The few hundreds of thousands of naira paid by students are basically administrative charges and fees.

The Nigerian student loan act specifically stipulates that the monies to be given as loans shall be paid only for tuition fees. Since the target schools do not charge tuition fees, it means the loan will not be accessed unless another law is made. Which will enable public universities to charge tuition fees or be amended to reflect the status quo.

A few weeks after the announcement of the student loan law, Bayero University in Kano which is a federal university has already hiked its school fees from 35,000 to as high as N220,000 depending on course of study. This increment is coming at a time when the administrative and legal issues surrounding the new student loan have not been defined and settled. With a short registration window, students of these universities have little to no hope of accessing the loan for the 2022/203 academic session. 

Before now, the Kaduna State University (KASU) hiked its tuition fees where some departments are expected to charge as high as N250,000. The situation in KASU has exposed the bitter stories of how high school fees can frustrate the dreams of students. In the 2021/2022 academic session at the university, many students were unable to pay and faced an imminent threat of missing out on their exams. It took the intervention of student unions in the university who pleaded on behalf of the students. That the school management allows such students to sit for their exams after signing an undertaking to pay at a later time.

On another dimension, students of Ahmadu Bello University lost academic time due to the school’s inability to settle its huge electricity bill that runs into hundreds of millions of Naira. These charges are expected to be borne by students in a sprint that seeks to shed financial burdens on institutions over to the students.

  1. Academic Staff Union

The Academic Staff Union of Universities (ASUU) is an embodiment of the labour union’s struggle in Nigeria. Formed in 1978, the union had at many times confronted the Nigerian government demanding better interventions in the country’s education system. Through military regimes and down to the present democratic dispensation, the union has remained resolute in its demands.

Since 1988, when the union embarked on its first industrial action, it has done so a whopping 16 times, spanning into months which cumulatively amount to years of academic sessions lost. 

As recently as 2022, the union embarked on an 8-month-long strike that was called off in October 2022. 

The student loan law is coming at a time when issues between the federal government and ASUU have not been completely ironed out. 

Part of the demands by ASUU is for the government to improve funding of the universities and settle the earned allowances of staff especially as it relates to thesis supervision and research.

It has been weeks now since the passing of the student loan law and there are no signs of the union threatening to embark on an industrial action. This is not surprising given that the union is evidently worn out from its recently called strike that saw its members going the whole stretch of the strike without pay

Daily Trust reported the president of ASUU commenting that the student loan act is not new and they are aware of it. The president however expressed fear that the loan law will pave for the introduction of tuition fees in universities which will force many students to drop out of school. 

He said “We had said long ago, in 2017, to President Buhari when they came up with the issue of tuition fees. That every student will pay N1 million and we said you cannot put that in our agreement and you cannot use that to negotiate with us. And with the nature of the country we have today, there is no way that will work”

  1. Graduate Employability Prospect

The employability of alumni of any institution serves as a valuable pointer for current and prospective students of such schools to assess and gauge their chances in the outside world after graduation. 

Many international universities provide statistics on the success of their alumni on their school portals in order to entice applicants. This is unfortunately lacking in the websites of most public universities in Nigeria.

However, in 2018, Stutern, a private research company based in Lagos published data on the employability of graduates from select Nigerian universities. The data revealed Covenant university, which is privately owned to have the highest graduate employability of 83.70%. This is closely followed by the publicly owned Nigerian University of Nsukka at 68.18%. Ahmadu Bello University Zaria was ranked 20th in a list of 20 with 37.50%

The research on the employability of Nigerian graduates, although conducted on selected 20 of the 170 universities and capturing only a small percentage of respondents, shows that a substantial number of university graduates in Nigeria remain unemployed.

On the basis of educational qualification, according to Punch’s 2022 Bi-Annual Nigerian Graduates Report. It was discovered that 58.9% of HND graduates are unemployed, 49.55% of OND graduates are unemployed and 39.75% of BSc holders are unemployed. 

In essence, Nigerians are formally educated but informally employed, with those employed still battling the stings of poverty.

According to research by Stutern, 60% of Nigerian graduates earn less than N60,000 in their first job after graduation. While 40% of Nigerian graduates earn between N50,000 to N99,000 in their second jobs.

With the duo of high unemployment rate among Nigerian graduates and the poor remuneration in their first jobs, students who earn a certificate on loan are bound to contend with these realities.

The student loan act stipulates that students are expected to begin settlement of their loans two years after composting the mandatory National Service whereupon a 10% deduction on their salaries will begin. 

Based on the aforementioned parameters, unless there are improvements in the country’s employment rate and worker’s remuneration, many graduates will struggle with repayment

Summary of Observations on the Nigerian Student Loan

Student loan is not accessible to all Nigerian students as only students of public institutions can benefit. 

The cap limit on the income of beneficiaries as prerequisites for qualification means Nigerians who earn more than N500,000 per annum can not apply.

Due to the administrative lethargy of Nigerian institutions, the loan may suffer the same bottlenecks in terms of administration.

The state of infrastructure in Nigerian institutions is abysmal and as such the students who wish to attend such schools on loan may have that to contend with.

The lingering issues between ASUU and the federal government have not been fully settled. The student loan is only one subset of the greater tussle between the union and the government. The student loan act can not be seen as a panacea to the perennial problem. 

The employability of Nigerian graduates is neither high nor encouraging. Nigeria ranks 3rd as the country with the highest number of unemployed persons. Introducing a student loan system in such an unripe landscape will bring with it other challenges in terms of repayment.

The public universities in Nigeria are tuition-free. The introduction of a student loan may influence the introduction of tuition fees in these universities or at least a hike in administrative charges as has been seen in the example of Bayero University.


The student loan law should be revised to enable Nigerians in private schools to benefit. Since the money is loaned out and not given for free, the scope should be expanded to capture private institutions in Nigeria. It is unfair to leave half of the institutions in Nigeria out of the scheme. 

The income level of prospective beneficiaries of the loan which is pegged at N500,000 aims to ensure the loan is accessed only by those in dire need. However, the realities of an imminent hike in school fees mean even those with an income higher than N500,000 will be pushed into the list of prospects. Thus, the limit should be revised to reflect the impending realities.

There is a need for improved administrative efficiency in Nigerian institutions of learning to ensure the smooth administration of the loan scheme. These institutions should therefore leverage emerging technologies to ensure the smooth automation of their processes. This will go a long way in improving efficiency in service delivery.

The need for improved funding for educational infrastructure in the country is evident. With the expected hike in school fees, monies generated should as a matter of priority be directed to building quality infrastructure that will enhance the learning experience for Nigerian students. 

The student loan only covers tuition fees. Students will still be required to pay for accommodation and other expenses from their pockets. There is the need for a provision that will enable students from financially impoverished backgrounds to be able to access more than just funding for their tuition through the student loan. Tuition only amounts to a fraction of educational expenses. The loaning body should therefore devise means to offer loans for these extra costs to those in need.

To avoid further time wastage for students, the issues between ASUU and the government should be thoroughly settled. This will enable the student loan to thrive better and the value of it seen in the quality of students produced.

The employability of Nigerian graduates is very low. Therefore, students who wish to attend the university on loan should carefully study and understand the course they wish to study and the prospect of its graduates in the labor market. Nigerian students should not allow themselves to be caught funding unnecessary degrees with student loans.


The Nigerian student loan holds the promise of providing the poorest of Nigerians a chance at education while also protecting the public education system. For the loan to succeed, certain house cleaning of the education system needs to be undertaken.

The Nigerian education system stands to benefit from the necessary restructuring that will arise from this new funding model. It provides a window for more research on how loans will impact the quality of education in Nigeria.

Abdulrahman Baba-Ahmed

Abdulrahman Baba-Ahmed is a student of policy and development studies who has passion for and interest in social and cultural issues happening in Nigeria.