The Nigerian Education Loan Fund (NELFUND) has begun piloting a tokenised payment system designed 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 fund had received nearly 400,000 applications under its ongoing process.
Under the proposed arrangement, students will use a mobile application to authorise payments from their approved loan funds directly to their institutions through tokens linked to specific schools.
Sawyerr said the system was developed to address cases in which students paid their fees without knowing that NELFUND had already transferred the money to their institutions. Such situations, he explained, had resulted from delays in communicating completed payments to beneficiaries.
He gave an example of a student who pays fees on Wednesday without knowing that NELFUND had already settled the bill on Monday, only to discover the earlier payment on Friday.
“It was a genuine error, no suspicion, no accusation, just genuine error,” he said, adding that the new arrangement was intended to eliminate the need for refunds by allowing students to initiate payments themselves.
Sawyerr stressed that the system would not give students unrestricted access to the loan money. Instead, beneficiaries would receive notifications when their approved fees were ready for payment and would have to authorise the transactions through their phones.
He said the funds could only be transferred to the institution designated for the approved payment and could not be redirected to students’ personal bank accounts or other schools.
NELFUND Executive Director, Mustapha Iyal, explained that the token would be linked to a particular institution rather than a personal or mobile money wallet. He confirmed that the pilot had commenced, with close to 400,000 applications received at the time of the briefing.
NELFUND administers the Federal Government’s student loan scheme 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, institutional fees are paid directly to schools, while approved upkeep allowances go to students’ bank accounts.
The officials did not announce a date for full implementation of the tokenised payment system. They also did not specify how many of the nearly 400,000 applications had been processed through the pilot. The scheme’s effectiveness will depend on coordination between NELFUND, students and institutions to ensure payments are authorised, recorded and confirmed promptly.
