The Nigerian Education Loan Fund (NELFUND) has commenced a pilot of a tokenised payment system designed to prevent students from paying their school fees twice and eliminate refund complications arising from delays in confirming loan disbursements to institutions.
NELFUND’s Managing Director, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, explaining that the system would allow students to authorise payments directly to their institutions through tokens linked to their approved fees.
He said the initiative followed cases in which students, unaware that NELFUND had already paid their fees, made duplicate payments to their institutions to meet registration deadlines.
Under the existing arrangement, institutional charges are paid directly to participating institutions, while approved upkeep allowances are transferred to students’ bank accounts.
According to Sawyerr, the situation often arose when institutions received payments from the fund before notifying the affected students, leaving some beneficiaries to pay independently.
He illustrated the problem with an example in which NELFUND paid an institution on Monday, but a student, unaware of the transaction, paid the same fees by Wednesday and only learnt of the fund’s earlier payment on Friday.
“It was a genuine error, no suspicion, no accusation, just genuine error,” he said.
He explained that the new arrangement would enable students to initiate payments from their approved loan funds through their phones, with the money transferred directly 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.
He stressed that the system would not involve transferring loan funds into students’ personal bank accounts but would give them control over authorising payments to their institutions.
“We’re not giving the students money, but we’re giving them power,” he said.
The managing director added that the tokenised arrangement would restrict the use of approved tuition funds to the institution for which payment had been authorised, preventing beneficiaries from transferring the money to personal accounts or redirecting it to other schools.
He explained that a student with an approved tuition payment of ₦200,000, for instance, could authorise the transfer only to the designated institution.
“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’s Executive Director, Mustapha Iyal, corroborated the explanation, saying the token would be linked to a specific institution rather than a student’s personal or mobile money wallet.
“It’s not a personal wallet, it’s not a mobile money wallet at all,” Iyal said.
He disclosed that the pilot phase had commenced, with close to 400,000 applications recorded at the time of the briefing.
However, Iyal did not specify how many applications had been processed through the pilot system.
He explained that the fund used students’ application identification numbers and wallet numbers for institutional payment processes rather than their bank account numbers.
“To be clear, we don’t use account numbers. We use their application ID and wallet number,” he said.
According to him, institutional fees are handled separately from upkeep allowances, which are transferred to beneficiaries’ personal bank accounts through payment channels, including NIBSS Instant Payments and Paystack.
He said the use of external payment channels for upkeep allowances could sometimes result in delays, depending on the financial institutions involved.
Iyal added that the system processed transactions for almost 5,000 students daily, while approximately 20,000 additional students had been recorded between the previous week and the week of the briefing.
He also clarified that students could already download receipts from the NELFUND platform after their institutional fees had been processed.
However, he noted that institutions maintained separate systems for issuing their own receipts and clearance documents required for departmental registration and other academic processes.
The development comes as NELFUND moves to strengthen transparency and improve understanding of the student loan scheme among beneficiaries, parents and tertiary institutions.
Sawyerr said the fund had also identified cases of students allegedly benefiting from the loan scheme while continuing to rely on their parents to pay their tuition fees.
“This comment is based on our recognition that there are so many students out there who are double-dipping. They are taking from NELFUND and still stressing their parents,” he said.
He said the fund would introduce an arrangement through which parents could confirm whether their children’s school fees had been paid without necessarily being given details of the amounts involved.
To address misconceptions and ensure a smoother transition to the revised payment processes, Sawyerr announced plans to organise re-education workshops across the six geopolitical zones.
He said the exercise would go beyond the fund’s usual sensitisation campaigns by explaining the changes to students, parents and participating institutions.
“We can easily do a press release and say, ‘Hey, this is what we’re doing.’ But if we don’t educate the institutions, if we don’t educate the students, everybody will still be running behind,” he said.
“This is not sensitisation. This is re-education of the stakeholders and the students as to the changes that we have made in their favour,” he added.
The managing director said the workshops would help stakeholders understand the revised procedures, adding that journalists might be invited to some of the engagements to observe the exercise.
He also urged the media to help disseminate information about the changes, noting that the regional workshops might not reach every student who needed the information
