The Nigerian Education Loan Fund (NELFUND) has begun piloting a token-based payment system to prevent students from paying their school fees twice and reduce complications arising from refund requests.
The system will allow students to authorise payments directly to their institutions through tokens linked to their schools, instead of receiving approved tuition funds in their personal bank accounts.
NELFUND Managing Director, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, explaining that the new arrangement was designed to address cases in which students unknowingly paid fees already settled by the fund.
He said some beneficiaries had made duplicate payments because they were not promptly informed that NELFUND had transferred their fees to their institutions.
“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,” Sawyerr said.
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He explained that a student could pay fees independently to meet a school deadline, only to discover days later that NELFUND had already made the payment, leaving the institution to process a refund.
“It was a genuine error, no suspicion, no accusation, just genuine error,” he said.
Sawyerr said the new arrangement would allow students to receive notifications when their approved fees were ready for payment and authorise the transactions through their phones.
The money would then move directly to the designated institution, reducing the risk of duplicate payments and subsequent refund requests.
“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 stressed that the system would not give students direct access to the loan funds but would allow them to control when approved institutional payments were initiated.
“We’re not giving the students money, but we’re giving them power,” he added.
According to Sawyerr, the tokens would restrict payments to the institutions for which the funds had been approved, preventing beneficiaries from transferring the money to personal accounts or redirecting it to other schools.
He illustrated this with a student whose approved tuition payment was N200,000, explaining that the amount could only be transferred 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 Executive Director, Mustapha Iyal, clarified that the token was linked to a specific institution and was neither a personal wallet nor a 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, with nearly 400,000 applications received by the fund. However, he did not specify how many of the applications had been processed through the pilot system.
NELFUND administers the Federal Government’s student loan scheme established under the Students Loans (Access to Higher Education) Act, 2024. The programme provides eligible Nigerian students with interest-free loans to cover institutional charges and, where requested and approved, upkeep expenses.
Under the existing arrangement, approved tuition and other institutional charges are paid directly to students’ schools, while approved upkeep allowances are transferred to beneficiaries’ bank accounts.
The proposed token system concerns institutional payments and does not replace the existing arrangement for upkeep allowances.
The fund is introducing the change amid efforts to improve payment coordination among students, tertiary institutions and NELFUND and reduce administrative delays associated with fee payments and refunds.
The officials did not announce a date for the nationwide implementation of the new system.
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