NELFUND moves to stop students collecting loans while parents pay fees

The Nigerian Education Loan Fund has said it will take steps to stop students from benefiting from its loan scheme while still relying on their parents to pay their school fees.

The Managing Director of NELFUND, Akintunde Sawyerr, disclosed this during a press briefing on Wednesday, saying the fund had identified cases of students allegedly receiving support through the scheme while continuing to depend on their parents for tuition payments.

Sawyerr said the development had informed plans to strengthen transparency in the administration of the student loan scheme and educate students, parents and tertiary institutions about changes to the payment system.

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

He added, “We are going to put an end to that.”

The managing director explained that the fund would introduce an arrangement through which parents could confirm whether their children’s school fees had been paid without necessarily being given details of the amount involved.

According to him, the measure is intended to provide clarity for parents who remain financially responsible for their children’s education while ensuring that the payment process is better understood.

The development comes as the Federal Government continues to implement its student loan programme, established to reduce financial barriers to tertiary education and enable eligible Nigerian students to access higher education without immediate financial constraints.

Under the scheme, NELFUND provides loans for institutional fees, while upkeep allowances are processed separately to support beneficiaries’ living expenses.

The arrangement requires coordination between the fund, participating tertiary institutions and financial service providers to ensure that school fees are paid and upkeep allowances reach eligible students.

Sawyerr said NELFUND would organise re-education workshops across the six geopolitical zones to explain the changes to stakeholders and address misunderstandings about how the scheme operates.

He said the exercise was different from the fund’s usual sensitisation activities, which focus on informing students about the existence of the loan 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.

“This is not sensitisation. This is re-education of the stakeholders and the students as to the changes that we have made in their favour,” Sawyerr added.

He said the workshops would help institutions and students understand the revised processes, adding that the fund might invite journalists to some of the engagements to observe the exercise.

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Sawyerr also urged the media to help disseminate information about the changes, noting that the regional workshops might not reach every student who needed the information.

Meanwhile, NELFUND’s Executive Director, Mustapha Iyal, explained that the fund had designed its payment system to minimise intermediaries in the transfer of institutional fees.

Iyal said the fund used students’ application identification numbers and wallet numbers for institutional payment processes rather than relying on bank account numbers.
“To be clear, we don’t use account numbers. We use their application ID and wallet number,” he said.

He explained that institutional payments were handled differently from upkeep allowances, which were transferred to students’ personal bank accounts through payment channels.

According to him, NELFUND uses systems such as NIBSS Instant Payments and Paystack to process upkeep payments because the fund is not a banking institution and cannot provide students with bank accounts.

He said the use of external payment channels for upkeep allowances could sometimes result in delays, depending on the financial institutions involved.

Iyal disclosed that the pilot phase of the payment system involved about 400,000 students, with approximately 20,000 additional students recorded between the previous week and the week of the briefing.

He added that the system processed transactions for almost 5,000 students daily.

“We are not talking about 20,000. No, we are talking about 400,000,” he said.

The executive director explained that the fund’s system used a tokenised arrangement linked to each student’s application identification number, with a wallet attached to the application.

He said the upkeep wallet operated separately from the mechanism used for institutional payments.

Iyal also clarified that students could already download receipts from the NELFUND platform after their school fees had been processed.

He, however, distinguished between receipts generated by the fund and those issued by individual institutions, noting that schools maintained their own systems for issuing receipts or clearance required for departmental registration and other academic processes.

“Presently, on the NELFUND system, when they pay, they can download a receipt. We have that already,” he said.

The clarification comes amid the continuing implementation of the student loan scheme, with the fund seeking to improve stakeholders’ understanding of institutional payments, upkeep allowances and the documentation students need to complete their academic registration.