The Nigerian Education Loan Fund, NELFUND, has begun testing a new payment system that allows students to authorise school fee payments directly to their institutions, aiming to prevent duplicate payments and reduce refund complications.
Managing Director Akintunde Sawyerr said during a press briefing on Wednesday that the fund had received nearly 400,000 applications in the ongoing process.
The proposed tokenised system will allow students to authorise payments from their approved loan funds through a mobile application, with each token linked to a designated institution.
Under the arrangement, students will no longer need to rely solely on notifications about payments made by NELFUND on their behalf. Instead, they will be able to initiate the transfer of approved institutional charges directly to their schools.
Sawyerr said the change was designed to address cases in which students paid their fees without knowing that NELFUND had already settled the bills.
He explained that delays in notifying beneficiaries about completed payments had sometimes resulted in duplicate transactions, forcing institutions to process 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.
Sawyerr illustrated the problem with an example in which NELFUND paid an institution on Monday, but a student who remained unaware of the transaction paid the same fees by Wednesday and only learnt of the fund’s earlier payment on Friday.
“It was a genuine error, no suspicion, no accusation, just genuine error,” he said.
The managing director said the new mechanism would give students greater control over payment authorisation while ensuring that funds went directly to the institutions for which they had been approved.
“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” Sawyerr said.
He explained that students would receive notifications when their approved fees were ready for payment and could authorise the transactions through their phones.
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The system would also restrict the funds to the designated institutions, preventing beneficiaries from transferring the money to personal accounts or redirecting it to other schools.
Responding to questions about whether students could move the funds into personal accounts after receiving them in a wallet, Sawyerr said the tokenised arrangement would prevent such transfers.
“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.
He added that a student with an approved payment of ₦200,000, for example, could authorise the transfer only to the designated 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 clarified that the token would be linked to a specific institution rather than a personal or mobile money wallet.
“It’s not a personal wallet, it’s not a mobile money wallet at all,” Iyal said.
He explained that the institution-linked arrangement would ensure that the funds could not be redirected to another school or a beneficiary’s personal account.
Iyal confirmed that the pilot phase had commenced, with close to 400,000 applications received at the time of the briefing.
However, the officials did not specify when the system would be fully implemented. The number of applications cited during the briefing also does not establish how many have been processed through the pilot.
NELFUND administers the Federal Government’s student loan scheme established under the Students Loans (Access to Higher Education) Act, 2024. The programme provides eligible Nigerian students with interest-free loans for institutional charges and, where requested and approved, upkeep expenses.
Under the existing arrangement, approved institutional charges are paid directly to students’ institutions, while upkeep allowances are transferred to beneficiaries’ bank accounts. The proposed tokenised system concerns institutional payments, not the ordinary disbursement of upkeep allowances.
The success of the new system will depend on effective coordination among NELFUND, students and tertiary institutions, particularly in notifying beneficiaries, authorising transactions and confirming payments before school fee and registration deadlines.
Punch News
