The Nigerian Education Loan Fund (NELFUND) has commenced a pilot programme for a new token-based payment system aimed at preventing students from paying their tuition fees twice and reducing the administrative challenges associated with refunds.
The fund’s Managing Director, Akintunde Sawyerr, announced the development on Wednesday during a press briefing, revealing that the initiative would enable beneficiaries to authorise payments directly to their respective institutions using tokens linked to their schools.
Sawyerr explained that the proposed system was developed in response to cases where students unknowingly paid fees that NELFUND had already settled on their behalf.
He noted that communication delays between the fund, students and tertiary institutions had occasionally prevented beneficiaries from receiving timely confirmation of completed transactions, resulting in duplicate payments and subsequent refund requests.
According to him, a student might pay school fees independently because they had not been informed that NELFUND had already transferred the approved amount to their institution.
He illustrated the problem with a scenario in which the fund settles a student’s fees on Monday, but the beneficiary makes another payment on Wednesday before discovering the initial transaction on Friday.
Sawyerr described such cases as genuine mistakes rather than deliberate misconduct, stressing that a more efficient payment process was necessary to prevent their recurrence.
To address the challenge, the new arrangement will allow eligible students to receive notifications when their approved institutional charges are ready for payment and initiate the transactions through an application on their mobile phones.
Rather than having the funds transferred into their personal bank accounts, beneficiaries will authorise payments directly to the designated institutions through the tokenised platform.
Sawyerr said the approach would give students greater control over the timing of payments while ensuring that the funds remained restricted to their approved purpose.
He emphasised that the initiative was not designed to give students direct access to the loan money but to allow them to determine when the approved payments should be made.
Under the proposed arrangement, the tokens will be tied to specific institutions, preventing beneficiaries from redirecting the money to personal accounts or transferring it to other schools.
For example, a student with an approved tuition payment of N200,000 would only be able to authorise the transfer to the institution designated under the loan approval.
The fund’s Executive Director, Mustapha Iyal, clarified that the token system would not operate like a conventional personal or mobile money wallet.
He explained that each token would be associated with a particular institution, ensuring that payments could only be directed to the school for which the funds had been approved.
Iyal also confirmed that the pilot programme was underway, disclosing that NELFUND had received nearly 400,000 applications at the time of the briefing.
However, the figure represents applications received and should not be taken as the number already processed through the pilot system.
NELFUND operates the Federal Government’s student loan programme established under the Students Loans (Access to Higher Education) Act, 2024. The initiative provides eligible Nigerian students with interest-free loans to cover approved institutional charges and, where applicable, upkeep expenses.
Under the existing payment arrangement, approved tuition and other institutional charges are transferred directly to students’ schools, while approved upkeep allowances are paid into beneficiaries’ bank accounts.
The proposed token system specifically targets the payment of institutional fees and does not, based on the officials’ explanation, replace the existing process for disbursing upkeep allowances.
The student loan programme is intended to reduce the financial barriers to tertiary education by helping eligible students meet the cost of their studies. Its administration requires effective coordination among beneficiaries, educational institutions and the fund to ensure accurate approvals, timely disbursements and proper transaction records.
NELFUND’s latest initiative seeks to address one of the administrative difficulties associated with this process: students making independent payments because they are unaware that their fees have already been covered by the loan scheme.
By requiring beneficiaries to authorise payments through institution-specific tokens, the fund hopes to reduce duplicate transactions, limit refund disputes and improve transparency in the disbursement process.
Although the pilot has commenced, the officials did not announce a definite date for nationwide implementation during the briefing.
The success of the initiative will depend on how effectively the new platform integrates with institutional payment systems and how promptly students receive payment notifications and confirmation of transactions.
If successfully implemented, the system could help reduce avoidable payment errors, improve accountability and make the administration of Nigeria’s student loan scheme more efficient.
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