The Federal Government (FG) through the Federal Executive Council (FEC) has proposed a bill demanding that 30 per cent of allocations received by the Tertiary Education Trust Fund (TETfund) will go to the Student Loan Scheme.
The Special Adviser to the President on Information and Strategy, Bayo Onanuga announced the proposed bill on Wednesday during his address to the State House Correspondents at the Aso Rock Villa, Abuja.
The bill, according to Onanuga is aimed at amending Section 3 of the Tertiary Education Trust Fund Act No. 16, 2011, labelled ‘Establishment of the Tertiary Education Trust Fund.’
“This former part of the omnibus Economic Stabilisation Bills (2024) was considered and approved at the Council meeting on Monday for onward transmission to the National Assembly,” Onanuga said.
“If approved by the National Assembly, TETFund will set aside 30 per cent of its initial allocation from the Federation Account to support the Nigerian Education Loan Fund (NELFUND).
“The Fund shall, before disbursement of the amount in the Fund, set aside in each year (a) one-third of the amount to be transferred to the Nigerian Education Loan Fund established under the Students Loans (Access to Higher Education) Act. The bill also puts a five per cent cap on TETFund’s annual administration.
“An amount not exceeding five per cent of the total monies accruing to the Fund in the preceding year which shall be applied for – (i) the cost of administration and management of the Fund, necessary for the due administration and implementation of the purpose of this Act, (ii) the maintenance of any property acquired by or vested in the Fund and generally to pay for services rendered to the Fund, and (iv) any other expenditure as may be approved by the Fund, from time to time, in connection with all or any of its functions and powers under this Act.”
Onanuga further told the state house correspondents that the proposed legislation would be used as a sustainable resource stream for student loans.
“Some of us may have wondered how we are going to fund the loans we are giving to Nigerian students. Most of the funding will now come from the money going to TETFund,” he said.
“So, there is an amendment to the TETFund Act that was made in 2011 that now says that the fund shall before disbursement of the amount in the fund set aside an initial one-third of the amount to be transferred to the Nigerian Education Loan Fund.
“That is 30 per cent of whatever TETFund gets from the federation account will now be passed on to NELFund which will provide a ready funding source to NELFund.
“Also, TETFund has been pegged to spending only five per cent of its income on its administration.
“That is whether it wants to do capital projects in its office or wants to pay salaries, it cannot spend more than five per cent of whatever accrues to it from the Federation Account.
“That’s the maximum it can get according to the fund. So, 30 per cent of TETFund is now going to fund the NELFund, and five per cent to fund its own operations.
“The FG is proposing the changes to the law because “TETFund cannot just be building assembly houses or laboratories without making sure that students are able to use those facilities with the loans from NELFund.
“The new allocation is only supplementary as there will also be budgetary allocation from the FG to NELFund all the time.”
