NELFUND commences tokenised system to check double tuition payment

The Nigerian Education Loan Fund (NELFUND) has introduced a tokenised payment system so benefiting students don’t pay double tuitions.

The system, it explained, is also to checkmate complications associated with refund with over 400,000 applications in place.

NELFUND is in charge of the Federal Government’s student loan scheme established under the Students Loans (Access to Higher Education) Act, 2024.

The scheme provides eligible Nigerian students with access to interest-free loans to cover institutional charges and, where requested and approved, upkeep expenses. 

Under the existing arrangement described on NELFUND’s official website, approved institutional charges are paid directly to students’ institutions while upkeep allowances are paid into the students’ bank accounts.

NELFUND Managing Director Akintunde Sawyerr told journalists on Wednesday students would be able to initiate payments directly to their institutions through tokens linked to their schools under the new arrangement.

Under the proposed system, students would use an application on their phones to authorise payments from their approved loan funds to their institutions, rather than receiving the money in their personal bank accounts.

Sawyerr said the change was to address situations in which students paid their fees without knowing that NELFUND had already transferred the money to their institutions.

“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.

According to him, the problem could arise when the fund paid an institution but the student, unaware of the transaction, proceeded to pay independently to meet the school’s deadline.

Sawyerr illustrated the situation with an example in which NELFUND paid an institution on Monday, but a student who did not know about the payment paid the same fees by Wednesday and only learnt of the fund’s earlier transaction on Friday.

“It was a genuine error, no suspicion, no accusation, just genuine error,” he said.

The managing director said the new payment mechanism was intended to eliminate such situations by allowing students to initiate payments themselves and have the transactions reflected directly in their institutions’ accounts.

“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 then authorise the transaction through their phones.

Once a student initiates the payment, the money would move directly to the designated institution, reducing the possibility of students paying fees already covered by NELFUND.

Sawyerr stressed that the arrangement was not a cash-disbursement system but a mechanism designed to give students control over the initiation of payments while restricting how the funds could be used.

“We’re not giving the students money, but we’re giving them power,” he said.

The system would also prevent beneficiaries from transferring the money to their personal bank accounts or redirecting it to other institutions, he added.

The fund’s Executive Director, Mustapha Iyal, also explained that the token was 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, explaining that each token would be attached to a particular institution and could only be used to direct payments to that school.

He added that the institution-linked arrangement was designed to ensure that the money could not be redirected to another school or a student’s personal account.