NELFUND Introduces System to Prevent Double School Fee Payments

The Nigerian Education Loan Fund (NELFUND) has begun piloting a tokenised payment system designed to prevent students from paying their school fees twice and reduce complications associated with refunds.

NELFUND Managing Director and Chief Executive, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, revealing that the fund had received nearly 400,000 applications under the ongoing process.

Sawyerr explained that the new arrangement would allow students to authorise payments directly to their institutions through tokens linked to their respective schools, rather than receiving institutional loan funds in their personal bank accounts.

He said the system was being introduced to address cases in which students paid their fees without knowing that NELFUND had already transferred the money to their institutions.

According to him, delays in notifying beneficiaries about completed transactions had resulted in some students making duplicate payments, creating the need for institutions to process refunds.

Sawyerr illustrated the problem with an example in which NELFUND paid a student’s institution on Monday, but the student, unaware of the transaction, paid the same fees independently on Wednesday before discovering the earlier payment on Friday.

He described such cases as genuine errors rather than deliberate actions, explaining that the proposed system would allow students to initiate payments themselves and ensure the transactions were reflected directly in their institutions’ accounts.

The NELFUND chief executive said the primary objective was to eliminate the need for refunds by giving students control over when approved institutional payments were initiated.

Under the proposed arrangement, beneficiaries would receive notifications when their approved fees were ready for payment and could authorise the transactions through an application on their phones.

Once authorised, the funds would be transferred directly to the designated institution, reducing the risk of students paying fees that had already been covered by the loan scheme.

Sawyerr stressed that the system would not involve giving students cash but would instead allow them to initiate payments while restricting how the funds could be used.

He added that beneficiaries would not be able to transfer the money to their personal bank accounts or redirect it to another institution.

For instance, a student with an approved payment of ₦200,000 would only be able to authorise the transfer to the school designated for the transaction. If the student did not initiate the payment, the money would remain undistributed.

NELFUND Executive Director, Mustapha Iyal, explained that each token would be linked to a specific institution rather than a personal or mobile money wallet.

He said the arrangement would ensure that approved funds could only be directed to the institution for which the payment had been authorised, preventing transfers to personal accounts or other schools.

Iyal confirmed that the pilot phase had commenced, with nearly 400,000 applications received at the time of the briefing. However, the officials did not establish how many of those applications had already 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 institutional charges are paid directly to students’ schools, while upkeep allowances are transferred to beneficiaries’ bank accounts.

The distinction means the proposed tokenised payment system is focused on institutional fees rather than the ordinary payment of upkeep allowances to students.

The student loan scheme is intended to reduce the financial burden of tertiary education and improve access for Nigerians who might otherwise struggle to meet the cost of schooling.

However, administering the programme requires coordination among NELFUND, students and tertiary institutions to ensure that applications are verified, approved amounts are accurate and payments are properly recorded.

When students pay their fees before NELFUND’s disbursement reaches their institutions, refunds may become necessary after the schools receive the loan payments. Delays in communicating completed transactions can also leave beneficiaries unaware that their fees have already been settled.

The new arrangement is intended to address these challenges by allowing students to authorise payments through institution-specific tokens and receive notifications before initiating transactions.

Although the pilot has commenced, NELFUND officials did not announce a specific date for full implementation during the briefing.

The system’s effectiveness will depend on how well the fund, students and institutions coordinate payment authorisation, confirmation and record-keeping, particularly when schools impose deadlines for fee payments and registration.