AN ASSESSMENT ON THE IMPACT OF FEDERAL STUDENT LOAN INITIATIVES ON UNIVERSITY ENROLLMENT RATES IN NIGERIA

CHAPTER ONE

INTRODUCTION

Background of the study

Higher education plays a crucial role in socio-economic development by providing people with the required skills and knowledge to make meaningful contributions to the economy and society. Higher education refers to the stage of education that follows post-basic education, as defined by the National Policy on Education in 2015. It includes a wide range of institutions, including as universities, polytechnics, colleges of education, and specialised institutes. In 2021, Nigeria had a total of 170 universities, including 43 federal universities, 48 state universities, and 79 private universities (National Universities Commission, 2021). Although there has been a significant increase in the number of higher education institutions, the enrollment rates remain low primarily because many prospective students encounter financial obstacles. According Joke & Makinwa (2023) maintained that as an educated populace is crucial for the progress of a country. Nigeria is establishing a basis for continuous economic expansion, creativity, and societal advancement by allocating resources to educate its young population.

In Nigeria, the ability to get higher education has been hindered by a range of obstacles, such as financial limitations. In order to address this problem, the Nigerian federal government has developed several student loan programmes with the goal of augmenting university enrollment rates. The expenses associated with higher education in Nigeria include tuition fees, housing, textbooks, and other incidental charges, which combined impose a substantial financial strain on students and their families. Based on data from the National Bureau of Statistics (2020), federal institutions in Nigeria have an average yearly tuition price of about NGN 25,000, whereas state universities charge between NGN 100,000 and NGN 200,000. In contrast, private colleges impose much higher tuition rates, ranging from NGN 500,000 to NGN 1,500,000 each year. The exorbitant expense associated with tertiary education has resulted in a predicament where several capable student are unable to pursue a university degree. Low-income students have a significant financial obstacle when it comes to affording higher education, since they typically lack the requisite financial resources 

Obasi & Eboh (2019) mentioned that in order to overcome the financial obstacles to pursuing higher education, the Nigerian federal government has implemented many student loan programmes over the years. In 1972, the Nigerian Student Loans Board (NSLB) was created with the purpose of granting loans to students enrolled in higher education institutions (Sennuga, 2023). Nevertheless, the NSLB had several obstacles, such as low loan recovery rates and administrative inefficiencies, which finally resulted in its demise throughout the 1980s. Recently, the federal government has reaffirmed its commitment to provide financial assistance for higher education. Two significant instances of such attempts were the formation of the Tertiary Education Trust Fund (TETFund) and the launch of the Nigeria Education Bank (NEB). The purpose of these programmes is to enhance access to higher education by offering financial assistance to students in the form of loans and grants (Ofoha, 2020). Therefore, the researcher sought to assess the impact of federal student loan initiatives on University enrollment rates in Nigeria.

Statement of the problem

  Over the years, the matter of student loans has emerged as a significant predicament impacting a majority of undergraduate students globally. The recent surge in tuition prices at Nigerian universities is concerning, and the lack of available financial assistance alternatives has led to a significant number of students resorting to borrowing money to fund their education. In a study by Ebehikhalu & Dawam (20169), the escalating expenses associated with pursuing higher education pose substantial difficulties for students globally, especially those in Nigeria. As a result, government programmes have been put in place to improve the availability of higher education via student loans. These programmes aim to mitigate the financial hardships faced by students and their families, consequently promoting increased enrollment rates in universities.

Prior research has shown that financial assistance, such as student loans, has a substantial impact on the rates of enrollment in higher education (Adio, 2022). Student loans in Nigeria have the capacity to diminish financial obstacles and enhance enrollment rates, especially for students from low-income families (O’Malley, 2020). Nevertheless, the efficacy of these lending efforts relies on several aspects, such as the sufficiency of the loan amounts, the accessibility of loans, and the efficiency of loan distribution and recovery procedures. Moreover, the way students and their families perceive the affordability and repayment conditions of student loans might impact their decision to take up these loans (Salami & Mohammed, 2021). Although the purpose of these programmes is clear, the true effect of government student loan schemes on university enrollment rates in Nigeria has not been well investigated and is uncertain. Hence, the need to  assess the impact of federal student loan initiatives on University enrollment rates in Nigeria.

1.3 Objective of the study

The broad objective of the study is to assess the impact of federal student loan initiatives on University enrollment rates in Nigeria. The specific objectives is as follows

To determine the level of awareness of federal student loan programs among students in Nigeria

To assess the reason for the introduction of the federal student loan initiatives in Nigeria.

To evaluate the impact of federal student loan initiatives on University enrollment rates in Nigeria

1.4 Research Questions

The following questions have been prepared to guide the study

What is the level of awareness of federal student loan programs among students in Nigeria?

What is  the reason for the introduction of the federal student loan initiatives in Nigeria?

What is the impact of federal student loan initiatives on University enrollment rates in Nigeria?

1.5 Significance of the study

The findings of this study will offer valuable insights into the effectiveness of existing federal student loan programs. Policymakers can use this information to refine current policies and design more effective financial aid programs that better address the needs of students. By identifying the strengths and weaknesses of existing initiatives, the study can help in formulating policies that enhance access to higher education and ensure the sustainability of loan programs. Furthermore, the study will contribute to the development of a more educated workforce. This, in turn, will enhance national productivity, innovation, and competitiveness in the global economy. Lastly, The findings will contribute to the broader body of knowledge on higher education financing and will serve as a reference for future research in this area.

1.6 Scope of the study

The study focuses on the impact of federal student loan initiatives on University enrollment rates in Nigeria. Empirically, the study will determine the level of awareness of federal student loan programs among students in Nigeria, assess the reason for the introduction of the federal student loan initiatives in Nigeria and evaluate the impact of federal student loan initiatives on University enrollment rates in Nigeria. Geographically, the study will be delimited to federal University of technology (FUTAMINA) Minna, Niger State.

1.7 Limitation of the study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraints are: 

Time: The researcher encountered time constraint as the researcher had to carry out this research alongside other academic activities such as attending lectures and other educational activities required of her.

Finance: The researcher incurred more financial expenses in carrying out this study such as typesetting, printing, sourcing for relevant materials, literature, or information and in the data collection process.

Availability of Materials: The researcher encountered challenges in sourcing for literature in this study. The scarcity of literature on the subject due to the nature of the discourse was a limitation to this study.

1.8 Definition of terms

Federal Student Loan Initiatives: Government-funded programs that provide financial assistance to students for covering the costs associated with higher education. These loans typically have specific repayment terms and conditions set by the federal government.

University Enrollment Rates: The percentage of eligible students who enroll in universities within a given period. This metric is often used to assess the accessibility and attractiveness of higher education institutions.

Socio-Economic Background: The social and economic circumstances in which an individual is raised, including factors such as family income, parental education levels, and occupational status. This background can significantly influence educational opportunities and outcomes.

Financial Aid: Monetary assistance provided to students to help cover educational expenses. Financial aid can take the form of loans, scholarships, grants, or work-study programs.

Scholarships: Financial awards given to students based on academic or other achievements to help pay for their education. Unlike loans, scholarships do not have to be repaid.

Grants: Financial aid provided to students based on need, which does not need to be repaid. Grants are often funded by the government or private organizations.

Repayment Rates: The percentage of borrowed funds that are repaid by students within a specified timeframe. This metric is used to evaluate the financial sustainability and success of loan programs.

Loan Repayment Behavior: The patterns and habits exhibited by borrowers in paying back their student loans. This can include regular on-time payments, deferments, forbearance, or default.