The Nigerian Education Loan Fund (NELFUND) is testing a new payment system that will require students to authorise the transfer of their approved school fees directly to their institutions, in a move to prevent duplicate payments and the complications associated with refunds.
The Managing Director and Chief Executive of NELFUND, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, explaining that the token-based arrangement was designed to address cases in which students unknowingly paid fees already covered by the federal government’s education loan scheme.
Sawyerr said the fund had encountered situations where payments reached institutions before beneficiaries were notified, leaving some students to pay the same fees again to meet school deadlines.
Under the proposed arrangement, students will receive notifications when their approved fees are ready for payment and will be required to authorise the transactions through an application on their mobile phones.
Rather than transferring the loan money into students’ personal bank accounts, the system will direct payments to the designated institutions once beneficiaries initiate the transactions.
Sawyerr illustrated the problem with a situation in which NELFUND pays a student’s fees on Monday, but the student, unaware of the transaction, independently pays the institution on Wednesday and only discovers the earlier payment on Friday.
He described such incidents as genuine errors arising from delayed communication rather than deliberate wrongdoing.
The NELFUND chief said the new system would place the responsibility for initiating payments in students’ hands while ensuring that the funds could only be used for their approved purpose.
“We’re not giving the students money, but we’re giving them power,” he said.
He added that the token would be restricted to the institution for which the loan had been approved, preventing beneficiaries from diverting the money to personal accounts or transferring it to other schools.
According to him, a student with an approved fee payment of N200,000 would only be able to authorise the transfer of that amount to the designated institution.
The fund’s Executive Director, Mustapha Iyal, clarified that the token would not operate like a personal or mobile money wallet but would be tied specifically to the beneficiary’s institution.
He said the arrangement was intended to ensure that approved funds remained within the designated payment channel and could not be redirected to unauthorised destinations.
NELFUND has commenced the pilot phase of the system, with close to 400,000 applications received under the ongoing process, according to officials at the briefing.
