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HomeInformationEducation in Peril: Scrapping TETFund for Student Loan Fund Sparks Nationwide Concern

Education in Peril: Scrapping TETFund for Student Loan Fund Sparks Nationwide Concern

The proposed Nigeria Tax Bill 2024 has stirred widespread debate, particularly over its provisions regarding education funding. At the center of the controversy is the decision to abolish the Tertiary Education Trust Fund (TETFund) and redirect all associated revenues toward the Nigerian Educational Loan Fund (NELFUND). This move has been widely condemned as ill-conceived, regressive, and detrimental to the nation’s education system.

Stakeholders, including the National Assembly, state governors, student union organizations, and the Nigeria Labour Congress, are being urged to take immediate action to prevent the implementation of this policy. Education is a cornerstone of national development, and the proposed elimination of TETFund could have far-reaching consequences for Nigeria’s tertiary education sector.

The Bigger Picture: Tax Reforms in Nigeria

While Hobnob News acknowledges the necessity of tax reforms, the proposal to scrap TETFund undermines the core objective of these reforms. The Nigerian government aims to increase the country’s tax-to-GDP ratio from its current 6.6-10 percent to 18 percent by 2026. This initiative is essential for economic stability and development. However, education funding should not be sacrificed in pursuit of revenue generation.

Globally, education is financed through a combination of tuition fees, grants, loans, scholarships, and endowments. For instance, Harvard University’s endowment was valued at $50.7 billion in 2023, highlighting the importance of diversified funding sources. Nigeria, however, continues to struggle with inadequate funding for its tertiary institutions, making the proposed redirection of TETFund revenues even more concerning.

Why TETFund Matters

TETFund was established as an interventionist program to address the persistent underfunding of tertiary institutions in Nigeria. Originally known as the Education Trust Fund, it was restructured to focus solely on higher education, providing much-needed infrastructure, research grants, scholarships, and faculty development. Over the past three decades, TETFund has played a pivotal role in transforming public universities, polytechnics, and colleges of education across the country.

The proposed tax bill imposes a development levy on corporate profits, with allocations structured as follows:

  • 4% for 2025 and 2026
  • 3% for 2027-2029
  • 2% for 2030 and beyond

From 2030 onward, 100% of these funds will be directed solely to NELFUND, effectively eliminating TETFund’s revenue stream. This decision, if implemented, could devastate public universities, which rely heavily on TETFund for infrastructure, faculty training, and research development.

The Potential Fallout

Experts argue that shifting all funds to NELFUND is not a viable solution to the country’s education crisis. While student loan programs can provide financial aid to indigent students, they cannot replace the need for government intervention in infrastructure, research, and faculty development. A reliance solely on loans would leave students in debt while studying in poorly equipped institutions, further reducing the competitiveness of Nigerian education on the global stage.

ASUU President, Emmanuel Osodeke, warned that “TETFund has been instrumental in transforming tertiary education across Nigeria for over 30 years. Scrapping it would devastate public universities and deny access to education for children from low-income families.” Similarly, ASUU-Nsukka Zonal Coordinator, Raphael Amokaha, emphasized that 90% of physical structures in Nigeria’s public tertiary institutions are products of TETFund interventions.

Despite its contributions, Nigerian universities remain underfunded, leading to frequent strikes and deteriorating academic standards. The federal government has failed to fulfill its 2009 agreement with ASUU, which includes a N1.2 trillion revitalization fund and the payment of earned allowances. Rather than resolving these outstanding issues, the government continues to establish new universities without addressing the funding challenges of existing institutions.

A Dangerous Precedent

The Tinubu administration allocated 6.39% of the 2024 budget and 7.0% of the 2025 budget to education, both of which fall far below the recommended benchmark by UNESCO. These figures indicate a persistent neglect of public education, making the proposed elimination of TETFund even more alarming.

Nigeria should take cues from other African nations like Ghana, which adopted Nigeria’s TETFund model to establish the Ghana Education Trust Fund (GETFund), significantly improving its education system. If Ghana sees the value in such an initiative, why is Nigeria choosing to dismantle it?

A Call for Action

At a time when Nigeria has the second-highest number of out-of-school children globally (20.1 million), prioritizing education should be a national imperative. The government must reconsider this misstep and sustain TETFund to ensure the continued growth and competitiveness of the education sector.

Rather than scrapping TETFund, the federal government should focus on increasing education funding, ensuring proper oversight of existing financial resources, and improving policies that support both student access and institutional development. The proposed shift toward a purely loan-based education funding system will only exacerbate existing inequalities and weaken the foundation of Nigeria’s future workforce.

Education is an investment, not a burden. The government must listen to the voices of reason and preserve TETFund for the betterment of the nation.

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