The Federal Government has introduced amendments to the Tertiary Education Trust Fund (TETFUND) Act, proposing that 30% of its allocations from the Federation Account be reallocated to support the Nigerian Education Loan Fund (NELFUND).
During a briefing at the state house, Bayo Onanuga, the Special Adviser to the President on Information and Strategy, confirmed these proposed changes, which are intended to boost funding for Nigerian students seeking higher education.
He stated that the Nigerian Education Loan Fund will be sustained through these adjustments to provide a reliable source of financial aid for students.
Onanuga mentioned that some individuals might be curious about how the government plans to finance the student loans being offered to Nigerian students. He believes the government has now provided a solution, stating that a significant portion of the funding will come from the Tertiary Education Trust Fund (TETFUND).
According to the plan, 30% of TETFUND’s revenue from the Federation Account will be directed to the Nigerian Education Loan Fund (NELFUND), established under the Student Loans (Access to Higher Education) Act, to provide student loans. This allocation helps address concerns about the sustainability of the loan program.
Onanuga further explained that a 2011 amendment to the TETFUND Act stipulates that one-third of the fund’s total amount must be set aside for NELFUND before any disbursement. This means 30% of TETFUND’s revenue will be consistently transferred to NELFUND, ensuring a steady source of funding for student loans.
NELFUND’s Administrative Costs
Additionally, the bill imposes a 5% limit on NELFUND’s yearly administrative expenses. This ensures that no more than 5% of its annual revenue will be allocated to operational costs, including salaries, capital projects, and general services, to prioritise funding for education.
Onanuga also clarified that NELFUND’s administrative spending is capped at 5% of its total income. Whether for office capital projects or staff salaries, it cannot allocate more than five per cent of its earnings from the Federation Account.
What This Implies
The amendment aims to create a stable funding source for the Nigerian Education Loan Fund by reallocating 30% of TETFUND’s revenue to student loans while keeping administrative costs at TETFUND in check. This initiative is intended to expand access to higher education for Nigerian students and aligns with the government’s broader focus on prioritising education funding as part of national economic growth and stabilisation efforts.
If the National Assembly approves it, the amendment could alleviate the financial strain on students by increasing the availability of educational loans while ensuring NELFUND operates with strict cost controls.