The Nigerian Education Loan Fund (NELFUND) has begun testing a new payment process that will require students to authorise the release of their approved tuition fees to their respective institutions.
The initiative is aimed at preventing situations where beneficiaries pay their school fees twice because they are unaware that the fund has already settled the bills on their behalf.
NELFUND Managing Director, Akintunde Sawyerr, announced the development during a press briefing on Wednesday, saying the proposed arrangement would give students control over payment authorisation without allowing them to divert the money.
Under the system, beneficiaries will receive notifications when their approved tuition fees are ready. They can then use an application on their phones to authorise payment to the institution registered under their loan application.
The new process is intended to address communication gaps that have previously resulted in duplicate payments and complicated refund requests.
Sawyerr explained that some students had paid their schools independently because they did not receive timely information about payments already made by NELFUND.
“We discovered that there were some issues with students being informed in good time that their payments had been made by NELFUND, which meant that some of them would pay because they hadn’t realised that NELFUND had paid already,” he said.
He described a scenario in which NELFUND could pay a student’s fees on Monday, only for the student to make another payment on Wednesday before discovering the initial transaction on Friday.
“It was a genuine error, no suspicion, no accusation, just genuine error,” he said.
According to Sawyerr, the token-based arrangement would allow students to decide when to initiate payments, reducing the likelihood of duplicate transactions and the need to process refunds.
“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” Sawyerr said.
However, beneficiaries will not receive the approved tuition money in their personal bank accounts. The token will be restricted to the institution designated to receive the payment.
“We’re not giving the students money, but we’re giving them power,” he said.
Sawyerr stressed that the system would prevent students from transferring the funds to themselves or directing them to another school.
“The system, the token, not only can they not transfer it to their personal account, they can’t transfer it to any other school,” he said.
Using an example of a student whose approved fees totalled ₦200,000, he explained that the funds would remain untouched until the beneficiary authorised payment to the approved institution.
“If they don’t push the button, the money doesn’t go anywhere. It will never be able to be transferred to the personal account of the student or anybody else,” he said.
NELFUND Executive Director, Mustapha Iyal, said the token was designed specifically for institutional payments and would not operate like a personal wallet.
“It’s not a personal wallet, it’s not a mobile money wallet at all,” Iyal said.
He also confirmed that the pilot programme had commenced, adding that applications to the student loan scheme had approached 400,000.
“As I speak to you, we already have close to 400,000 applications,” he said.
The figure represents applications received by the fund and does not necessarily mean that all the applicants have been processed through the new payment system.
NELFUND administers the Federal Government’s student loan programme established under the Students Loans (Access to Higher Education) Act, 2024. The scheme provides eligible students with interest-free loans to cover approved institutional charges and, where applicable, upkeep expenses.
Under the existing arrangement, tuition fees and other approved institutional charges are paid directly to schools, while approved upkeep allowances are transferred to beneficiaries’ bank accounts.
The proposed token system focuses on tuition and other institutional payments. Officials did not indicate that it would change the current process for paying upkeep allowances.
Although the pilot is already underway, NELFUND did not announce when the system would be introduced nationwide.
Its effectiveness will depend on how well the fund, participating institutions and students coordinate notifications, payment approvals and confirmation of transactions, particularly during school registration periods when deadlines are tight.