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 new arrangement is expected to give beneficiaries greater control over when approved institutional fees are paid, while ensuring that the funds go directly to their respective schools rather than passing through students’ personal bank accounts.
NELFUND Managing Director, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, explaining that the initiative followed cases in which students unknowingly paid fees that the fund had already settled on their behalf.
According to him, delays in notifying beneficiaries about completed payments had created confusion, particularly among students facing registration deadlines who could not afford to risk missing academic activities.
Sawyerr explained that a student might independently pay school fees after NELFUND had already transferred the approved amount to the institution, only to discover the earlier payment days later.
“We discovered that there were some issues with students being informed in good time that their payments had been made by NELFUND, which meant that some of them would pay because they hadn’t realised that NELFUND had paid already,” he said.
He stressed that such incidents were genuine mistakes rather than cases of fraud or deliberate wrongdoing.
“It was a genuine error, no suspicion, no accusation, just genuine error,” Sawyerr added.
To address the problem, the fund is testing a system that will allow students to authorise payments through a mobile application using tokens linked to their respective institutions.
Under the proposed arrangement, beneficiaries will receive notifications when their approved fees are ready for payment and can then initiate the transactions themselves. Once authorised, the money will be transferred directly to the designated institution.
“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” the NELFUND chief executive said.
“We’re not giving the students money, but we’re giving them power,” he added.
Sawyerr explained that the tokens would restrict the use of approved funds to the institution for which the payment was authorised, preventing beneficiaries from transferring the money to personal accounts or redirecting it to another school.
He illustrated this with a hypothetical example of a student whose approved institutional payment was ₦200,000, explaining that the beneficiary would only be able to authorise payment to the designated school.
“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 clarified that the token would not function as a personal or mobile money wallet but would be tied to a specific institution.
“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 figure represents applications received and should not be mistaken for the number already processed through the new system.
The development comes as the Federal Government continues to implement its student loan programme under the Students Loans (Access to Higher Education) Act, 2024, which was introduced to improve access to tertiary education for Nigerians facing financial difficulties.
The scheme provides eligible students with interest-free loans to cover approved institutional charges and, where requested and approved, upkeep expenses.
Under the existing arrangement, NELFUND pays approved institutional charges directly to tertiary institutions, while approved upkeep allowances are paid into beneficiaries’ bank accounts. The proposed token system is specifically intended to improve the payment of institutional fees, rather than replace the existing process for upkeep allowances.
Although the student loan scheme is designed to ease the financial burden of higher education, coordinating payments among the fund, students and institutions remains important. Delays in communication, verification and the updating of payment records can create uncertainty for beneficiaries, especially when schools set deadlines for fee payments and registration.
The token-based arrangement is intended to reduce such problems by allowing students to initiate payments while ensuring that the funds remain restricted to the approved institution.
However, NELFUND did not announce a specific date for full implementation during the briefing. Its success will depend on how efficiently the new system operates and how quickly students and institutions receive confirmation of authorised payments.
For beneficiaries, the key expectation is that the new process will provide clearer payment records, reduce avoidable financial losses and make it easier to establish whether their school fees have been settled.