The Nigerian Education Loan Fund (NELFUND) has begun piloting a token-based payment system aimed at preventing students from paying their school fees twice and reducing complications associated with refunds.
The initiative comes as the fund receives nearly 400,000 applications under its ongoing student loan programme.
NELFUND Managing Director, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, explaining that the system would enable beneficiaries to authorise payments directly to their institutions through tokens linked to their respective schools.
Under the proposed arrangement, students would receive notifications when their approved fees are ready for payment and use an application on their phones to initiate transactions directly to their institutions.
Sawyerr explained that the system was designed to address cases where students, unaware that NELFUND had already paid their fees, made duplicate payments to meet registration or other academic deadlines.
He said delays in communicating completed transactions had created situations in which students paid independently, only to discover later that the fund had already settled their bills.
According to him, NELFUND might transfer a student’s fees to an institution on Monday, while the beneficiary, unaware of the payment, could pay the same amount on Wednesday and only discover the earlier transaction on Friday.
“It was a genuine error, no suspicion, no accusation, just genuine error,” he said.
Sawyerr said the new system would give students control over initiating payments while ensuring that the funds could only be transferred to the institutions for which they had been approved.
“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” he said.
He emphasised that the arrangement would not involve transferring loan funds into students’ personal bank accounts.
“We’re not giving the students money, but we’re giving them power,” he said.
The managing director added that beneficiaries would be unable to redirect the funds to personal accounts or transfer them to institutions other than those designated in their approvals.
He explained that a student with an approved payment of ₦200,000, for instance, could only authorise the transfer to the designated school’s account.
“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, further explained that the token would be tied to a specific institution rather than functioning as a personal or mobile money wallet.
“It’s not a personal wallet, it’s not a mobile money wallet at all,” Iyal said.
He confirmed that the pilot phase had commenced, adding that the fund had received close to 400,000 applications at the time of the briefing.
However, the officials did not announce a specific date for the system’s full implementation. They also did not establish how many of the applications received had already been processed through the pilot.
NELFUND administers the Federal Government’s student loan scheme established under the Students Loans (Access to Higher Education) Act, 2024. The programme provides eligible students with interest-free loans to cover institutional charges and, where requested and approved, upkeep expenses.
Under the existing arrangement, approved institutional charges are paid directly to tertiary institutions, while upkeep allowances are transferred to students’ bank accounts.
The proposed tokenised system focuses on institutional payments and does not indicate a change to the existing arrangement for upkeep allowances.
Its effectiveness will depend on how efficiently NELFUND, beneficiaries and participating institutions coordinate payment authorisation, confirmation and record-keeping to prevent duplicate transactions and ensure students meet academic deadlines.