…received close to 400,000 applications, as it moves to give students control over fee payments
The Nigerian Education Loan Fund (NELFUND) has begun piloting a tokenised payment system aimed at stopping students from paying school fees twice and ending the refund headaches that follow, even as it reports nearly 400,000 applications under the ongoing process.
Akintunde Sawyerr, the managing director, disclosed this on Wednesday at a press briefing, saying the new arrangement will let students initiate payments to their institutions through tokens tied to their schools.
Under the proposed system, beneficiaries will use a phone application to authorise payments from their approved loan funds to their institutions, instead of receiving the money in personal bank accounts.
The problem
Sawyerr said the change is meant to fix cases where students paid fees without knowing NELFUND had already remitted the money to their institutions.
Delays in notifying students about payments made by the fund, he explained, led some beneficiaries to pay twice, creating the need for refunds.
“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.
The situation typically arises when the fund pays an institution but the student, unaware, pays independently to beat the school’s deadline.
“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” Sawyerr said.
How it works
Students will receive notifications when their approved fees are ready for payment, after which they can authorise the transaction on their phones. Once initiated, the money moves directly to the designated institution.
Sawyerr stressed that the arrangement is not a cash-disbursement scheme but a mechanism that gives students control over initiating payments while restricting how the funds can be used.
“We’re not giving the students money, but we’re giving them power,” he said.
Asked by journalists whether students could move funds to personal accounts once credited to a wallet, he said the token would confine the funds to the institution for which the payment was approved.
“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.
Mustapha Iyal, NELFUND’s executive director, said the token is linked to a specific institution and is neither a personal nor a mobile money wallet.
“It’s not a personal wallet, it’s not a mobile money wallet at all,” Iyal said, adding that each token can only be used to direct payments to the school to which it is attached.
Iyal confirmed that the pilot had started. “As I speak to you, we already have close to 400,000 applications,” he said.
NELFUND administers the Federal Government’s student loan scheme established under the Students Loans (Access to Higher Education) Act, 2024. The programme gives eligible Nigerian students interest-free loans to cover institutional charges and, where requested and approved, upkeep expenses.
Under the current arrangement described on NELFUND’s website, approved institutional charges are paid directly to students’ institutions, while upkeep allowances go into students’ bank accounts. The tokenised system concerns institutional charges only, not the regular transfer of upkeep allowances.
The scheme is designed to ease the financial burden of tertiary education and widen access for students who might otherwise struggle with costs.
But payments depend on coordination among NELFUND, beneficiaries and institutions to ensure applications are verified, approved amounts are accurate and payments are properly recorded.
Where students pay before the fund’s disbursement reaches their schools, refunds may be required once the institutions receive the loan payments.
The officials did not give a date for full implementation. The close to 400,000 applications cited by Iyal should also not be read as the number already processed through the pilot, as the briefing did not make that distinction.
The success of the new system will hinge on how smoothly students, institutions and NELFUND coordinate payment authorisation, confirmation and record-keeping, particularly where schools impose deadlines for fee payment and registration.
Charles Ogwo is a proactive journalist, driving education, and business innovations for over 10 years. He leads initiatives leveraging tech to enhance storytelling and build topnotch performing team. Charles is passionate about harnessing technology to inform, engage and empower communities.
