The Nigerian Education Loan Fund (NELFUND) has commenced a pilot programme for a token-based payment system designed to prevent students from paying their school fees twice and reduce complications associated with refunds.
The fund’s Managing Director, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, where he revealed that the initiative would allow beneficiaries to authorise payments directly to their institutions using tokens linked to their respective schools.
Sawyerr explained that the new system was developed to address cases in which students, unaware that NELFUND had already paid their fees, made duplicate payments to their institutions.
He said delays in communicating completed transactions to beneficiaries had created situations where students paid independently to meet school deadlines, only to discover later that the fund had already settled their fees.
According to him, such incidents were genuine mistakes rather than cases of misconduct, but often resulted in refund requests and additional administrative challenges.
The managing director said the proposed arrangement would give students control over initiating payments while ensuring that the funds were transferred only to the designated institutions.
“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” Sawyerr said.
Under the system, students would receive notifications when their approved school fees were ready for payment and could authorise the transactions through an application on their mobile phones.
He clarified that the initiative would not involve transferring the loan funds into students’ personal bank accounts. Instead, the token would restrict the money to the institution approved to receive the payment.
“We’re not giving the students money, but we’re giving them power,” he said.
Sawyerr further explained that beneficiaries would be unable to redirect the funds to their personal accounts or transfer them to other institutions.
He illustrated this with an example of a student whose approved school fees amounted to N200,000, explaining that the money could only be transferred to the designated institution after the student authorised the payment.
“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, also explained that the token would be tied 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, adding that the arrangement would prevent beneficiaries from diverting approved payments to other schools or accounts.
Iyal confirmed that the pilot phase had commenced, disclosing that the fund had received nearly 400,000 applications at the time of the briefing. However, he did not specify how many of the applications had been processed under the pilot scheme.
NELFUND administers the Federal Government’s student loan programme established under the Students Loans (Access to Higher Education) Act, 2024. The scheme provides eligible Nigerian students with interest-free loans to cover institutional charges and, where requested and approved, upkeep expenses.
Under the existing arrangement, approved institutional fees are paid directly to students’ institutions, while upkeep allowances are transferred to beneficiaries’ bank accounts.
The proposed token-based system specifically targets the payment of institutional charges and is intended to improve payment coordination between the fund, students and tertiary institutions.
Although the pilot programme has commenced, the officials did not announce a specific date for its nationwide implementation.
