The Nigerian Education Loan Fund (NELFUND) has begun testing a token-based payment system to prevent students from paying their school fees twice and reduce complications associated with refunds.
NELFUND Managing Director, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, saying the system would allow beneficiaries to authorise payments directly to their institutions instead of relying solely on notifications after disbursement.
He said some students had paid their fees independently because they were unaware that NELFUND had already transferred the money to their schools, leading to duplicate payments and subsequent refund requests.
“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” Sawyerr said.
Under the proposed arrangement, students would receive notifications when their approved institutional fees were ready for payment and could authorise the transaction through an application on their phones.
The money would go directly to the designated institution and could not be transferred to a student’s personal bank account or redirected to another school.
“We’re not giving the students money, but we’re giving them power,” Sawyerr said.
He explained that the system would ensure that funds remained tied to the institution for which the payment had been approved. A student whose fees had been approved, for instance, could authorise payment only to the designated school.
NELFUND Executive Director, Mustapha Iyal, said the token was linked to a specific institution and was not a personal or mobile money wallet.
“It’s not a personal wallet, it’s not a mobile money wallet at all,” Iyal said.
He confirmed that the pilot had commenced, adding that the fund had received close to 400,000 applications. However, he did not say how many of those applications had been processed under the pilot scheme.
The proposed system focuses on institutional charges, which NELFUND pays to tertiary institutions. It does not change the existing arrangement for approved upkeep allowances, which are paid into beneficiaries’ bank accounts.
The student loan scheme was established under the Students Loans (Access to Higher Education) Act, 2024, to provide eligible Nigerian students with interest-free loans to cover approved education costs.
The effectiveness of the new payment arrangement will depend on how well NELFUND, students and institutions coordinate payment authorisation and confirmation, particularly where schools impose deadlines for fees and registration.
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