News

Nigerian Govt Plans To Cut TETFund By 30% For Student Loans

Published

2 months ago

Sep 26, 2024.

The Federal Executive Council (FEC) has proposed an amendment to the Tertiary Education Trust Fund (TETFund) Act, aimed at allocating 30% of its funds to the Nigerian Education Loan Fund under the Student Loan Scheme.

This change is intended to provide a sustainable financial source for student loans, ensuring that Nigerian students have greater access to educational funding.

EDITOR’S PICKS

EKO HOT BLOG reports that Special Adviser to the President on Information and Strategy, Mr. Bayo Onanuga, announced the proposal while briefing State House Correspondents at the Aso Rock Villa in Abuja.

He explained that the amendment forms part of the Economic Stabilisation Bills (2024), which were approved by the FEC and are set to be transmitted to the National Assembly for legislative approval.

Under the proposed amendment, TETFund will be required to allocate 30% of its annual budget from the Federation Account to the Nigerian Education Loan Fund (NELFund).

The amendment reads: “The Fund shall, before disbursement of the amount in the Fund, set aside in each year one-third of the amount to be transferred to the Nigerian Education Loan Fund established under the Students Loans (Access to Higher Education) Act.”

Additionally, the bill introduces a cap on TETFund’s annual administrative expenses, limiting it to no more than 5% of its total revenue. This limit applies to the administration and management of the fund, including salaries, capital projects, and property maintenance.

Onanuga further explained that the proposed legislation aims to create a reliable funding source for student loans, which will complement TETFund’s investments in educational infrastructure.

He highlighted the importance of ensuring that students can access the facilities funded by TETFund through financial support from the loan scheme. “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,” Onanuga said.

TETFund Student Loans

He added that the 30% allocation from TETFund to NELFund is a supplementary measure, noting that the Federal Government will also provide budgetary allocations to the loan fund. “There will also be budgetary allocation from the Federal Government to NELFund all the time,” he assured.

The bill, if passed into law, will strengthen the financial framework for higher education in Nigeria by creating a sustainable funding source for student loans while maintaining TETFund’s role in improving educational infrastructure across the country.