The Nigerian Education Loan Fund has begun piloting a tokenised payment system to stop students from paying their school fees twice and to eliminate refund complications. Nearly 400,000 applications have already been received under the ongoing process.
NELFUND Managing Director Akintunde Sawyerr disclosed this on Wednesday at a press briefing. He explained that the new arrangement would let students initiate payments directly to their institutions through tokens linked to their schools. Under the proposed system, students would use a phone application to authorise payments from their approved loan funds to their institutions, instead of receiving the money in their personal bank accounts.
Sawyerr said the change was meant to address cases in which students paid their fees without knowing that NELFUND had already transferred the money to their institutions. He said delays in notifying students of payments made by the fund had led some beneficiaries to pay twice, creating the need for refunds. The problem could arise when the fund paid an institution but the student, unaware of it, paid independently to meet the school’s deadline. He gave an example in which NELFUND pays an institution on Monday, a student who does not know pays the same fees by Wednesday, and only learns of the earlier payment on Friday. He described such cases as genuine errors, with no suspicion or accusation attached.
According to him, the new mechanism would allow students to initiate payments themselves and have the transactions reflected directly in their institutions’ accounts, removing the need for refunds. Students would receive notifications when their approved fees were ready for payment and could then authorise the transaction from their phones. Once a student initiates payment, the money would move straight to the designated institution, reducing the chance of paying fees already covered.
Sawyerr stressed that this was not a cash-disbursement system but a way of giving students control over the initiation of payments while restricting how the funds could be used. The system would also bar beneficiaries from moving the money into personal bank accounts or redirecting it to other institutions. Responding to journalists who asked whether students could transfer funds to personal accounts after receiving them in a wallet, he said the token would restrict the money to the institution for which the payment was approved. He gave the example of a student with an approved N200,000, who could authorise a transfer only to the designated school’s account. If the student does not push the button, he said, the money goes nowhere and can never be moved to the personal account of the student or anyone else.
The fund’s Executive Director, Mustapha Iyal, added that the token was tied to a specific institution rather than to a personal or mobile money wallet, and could only be used to direct payments to that school. He confirmed that the pilot had started, with close to 400,000 applications received at the time of the briefing.
NELFUND administers the Federal Government’s student loan scheme established under the Students Loans (Access to Higher Education) Act, 2024, which gives eligible Nigerian students access to interest-free loans for institutional charges and, where requested and approved, upkeep expenses. Under the existing arrangement described on its website, approved institutional charges are paid directly to students’ institutions, while upkeep allowances go into students’ bank accounts. The tokenised system concerns institutional charges only, not the ordinary transfer of upkeep allowances.
The scheme is meant to ease the financial burden of tertiary education, but the payment process requires coordination among NELFUND, beneficiaries and institutions to ensure applications are verified, approved amounts are accurate and payments are properly recorded. Where students pay fees before the fund’s disbursement reaches their schools, refunds may be required. Sawyerr’s explanation suggests that delayed communication about completed payments has created a further administrative challenge, which the new system is meant to close.
The officials did not give a specific date for full implementation. The close to 400,000 applications should also not be read as the number already processed through the pilot, as the briefing did not make that distinction. The effectiveness of the new arrangement will depend on how smoothly students, institutions and NELFUND coordinate payment authorisation, confirmation and records, particularly when institutions set deadlines for fees and registration.
