NELFUND Moves to Curb Student Loan Abuse, Introduces Tuition Verification for Parents

The Nigerian Education Loan Fund (NELFUND) has announced plans to tackle alleged abuse of its student loan scheme by beneficiaries who receive government-backed financial support while still relying on their parents to pay their tuition fees.

The initiative will also introduce a mechanism allowing parents to verify whether their children’s school fees have been paid through the scheme, as the fund moves to strengthen transparency and accountability in its operations.

NELFUND Managing Director, Akintunde Sawyerr, disclosed the plans on Wednesday during a press briefing, where he said the agency had identified cases of students allegedly benefiting from the loan scheme while continuing to place the financial burden of tuition payments on their parents.

Sawyerr described the practice as unacceptable and said the fund was determined to stop it.

“This comment is based on our recognition that there are so many students out there who are double-dipping. They are taking from the NELFUND and still stressing their parents,” he said.

“We are going to put an end to that.”

Under the proposed arrangement, parents will be able to confirm whether NELFUND has paid their children’s institutional fees without necessarily being given access to the specific amount involved.

Sawyerr said the measure was intended to address concerns among parents who continue to bear educational expenses despite the availability of government-backed loans.

The development comes as the Federal Government seeks to expand access to tertiary education and reduce the financial barriers that prevent eligible students from pursuing higher education because they cannot pay school fees upfront.

Under the scheme, NELFUND provides loans for institutional charges, while upkeep allowances are processed separately to help beneficiaries cover living expenses.

To improve understanding of the payment process and address possible misuse, the fund plans to organise re-education workshops across Nigeria’s six geopolitical zones.

Sawyerr explained that the exercise would go beyond routine public awareness campaigns by providing detailed guidance to students, parents and tertiary institutions on payment procedures and changes introduced to the scheme.

“We can easily do a press release and say, ‘Hey, this is what we’re doing.’ But if we don’t educate the institutions, if we don’t educate the students, everybody will still be running behind,” he said.

He added that the initiative was intended to re-educate stakeholders about changes to the programme rather than simply inform them that the loan scheme existed.

The workshops are expected to clarify institutional fee payments, upkeep allowances and the documentation beneficiaries must provide. Sawyerr also indicated that journalists could be invited to some sessions to help communicate the changes to a wider audience.

Meanwhile, NELFUND Executive Director, Mustapha Iyal, explained how the fund’s payment system operates, noting that institutional fees are processed using students’ application identification numbers and wallet numbers rather than conventional bank account numbers.

“To be clear, we don’t use account numbers. We use their application ID and wallet number,” Iyal said.

He explained that tuition payments and upkeep allowances follow separate procedures. While institutional fees are handled through NELFUND’s payment arrangement with schools, upkeep allowances are transferred to beneficiaries’ personal bank accounts through external payment channels.

According to Iyal, the fund uses platforms such as NIBSS Instant Payments and Paystack to process upkeep payments because it is not a banking institution and cannot open bank accounts for students.

He added that delays could sometimes occur depending on the financial institutions involved in processing the transactions.

Providing an update on the scale of operations, Iyal said the pilot phase covered approximately 400,000 students, with about 20,000 additional students recorded between the previous week and the week of the briefing.

He also disclosed that the system processed transactions for nearly 5,000 students daily, highlighting the volume of activity involved in administering the scheme.

Iyal further explained that the payment system uses a tokenised arrangement linked to each student’s application identification number, with a wallet attached to the application.

He said the upkeep wallet operates separately from the mechanism used to pay institutional fees, reinforcing the distinction between payments made directly to schools and allowances transferred to students.