The Nigerian Education Loan Fund (NELFUND) has commenced a pilot of a new digital token-based payment system designed to prevent students from paying their school fees twice and reduce complications associated with tuition refunds.
The Managing Director of NELFUND, Akintunde Sawyerr, disclosed this on Wednesday, October 28, 2026, during a press briefing. He explained that the new arrangement would enable students to authorise payments directly to their respective institutions using a mobile application.
According to Sawyerr, the system is intended to address a recurring problem in which students pay their tuition fees without knowing that NELFUND has already transferred the money to their schools.
He explained that delays in communicating completed payments had resulted in some beneficiaries making duplicate payments to meet registration deadlines and other academic requirements.
For instance, a student might pay their fees on Wednesday without knowing that NELFUND had already settled the bill on Monday. By the time the student discovers the earlier payment, the institution would have received money from both parties, creating the need for a refund.
Sawyerr described such cases as genuine errors arising from communication gaps rather than necessarily involving deliberate wrongdoing.
He said the new system would give students control over initiating tuition payments while ensuring that the funds remain restricted to educational purposes.
HOW THE NEW TOKEN PAYMENT SYSTEM WILL WORK
Under the proposed arrangement, eligible students will receive notifications when their approved tuition funds are ready for payment.
Students will then use their mobile phones to authorise the transfer to the designated institution. The funds will be linked to the school for which the loan was approved, preventing beneficiaries from redirecting the money to personal bank accounts or other institutions.
Sawyerr emphasised that the arrangement would not involve giving students unrestricted access to the loan money.
“We’re not giving the students money, but we’re giving them power,” he explained.
The system is designed to ensure that students can initiate payments when necessary while NELFUND maintains control over how the approved funds are used.
Mustapha Iyal, NELFUND’s Executive Director, also clarified that the token would not operate as a conventional personal or mobile money wallet. Instead, it would be linked to a specific institution and restricted to payments made to that school.
He explained that a student with an approved tuition payment of ₦200,000, for example, would only be able to authorise payment to the institution designated for that loan.
If the student does not initiate the transaction, the funds will not be transferred.
NEARLY 400,000 APPLICATIONS RECEIVED
During the briefing, Iyal disclosed that the pilot had commenced and that the fund had received close to 400,000 applications under the ongoing process.
However, the figure refers to applications received and should not be interpreted as the number already processed through the pilot system.
NELFUND did not announce a specific date for the full implementation of the new payment arrangement.
The agency expects the system to improve coordination between students, tertiary institutions and the loan fund while making tuition transactions easier to track.
WHY NELFUND IS CHANGING ITS PAYMENT PROCESS
The introduction of the token system follows complaints from students who paid their fees independently before discovering that NELFUND had also transferred the approved tuition amounts to their institutions.
The problem became particularly noticeable during the early stages of the student loan programme, when applications and disbursements did not always align with institutions’ academic calendars and payment deadlines.
Some students borrowed money or used personal savings to settle their fees to avoid missing registration deadlines. When NELFUND subsequently paid the same fees, the institutions received duplicate payments, leaving the students dependent on refunds.
Sawyerr said the fund was also aligning its application and disbursement schedules more closely with academic calendars to minimise similar occurrences.
He noted that the combination of better timing, improved communication and the new token-based payment mechanism should help reduce payment errors.
TUITION LOANS WILL REMAIN RESTRICTED
NELFUND explained that the token system would apply to approved institutional charges, rather than allowing students to withdraw tuition funds as cash.
The arrangement is intended to ensure that money approved for education is used for its designated purpose.
Students’ upkeep allowances will continue to be paid directly into their personal bank accounts under the existing arrangement.
The distinction means that beneficiaries will retain access to their approved living allowances while tuition payments remain subject to the fund’s institutional payment controls.
The new approach also seeks to strengthen accountability by making it easier to identify when a payment has been authorised and completed.
WHAT STUDENTS SHOULD KNOW
The token-based payment system is being introduced as part of NELFUND’s efforts to improve the administration of the Federal Government’s student loan programme.
Students are expected to benefit from a process that gives them greater control over when approved tuition payments are initiated, while reducing the likelihood of paying fees that have already been settled.
However, the success of the system will depend on effective communication between NELFUND and participating institutions, accurate payment records and timely notifications to beneficiaries.
As the pilot progresses, students should continue to monitor official NELFUND communications and confirm their tuition payment status with their institutions before making additional payments.
Although the new system is intended to reduce duplicate payments and refund disputes, NELFUND has yet to announce a full rollout date.
The reform represents another step towards improving transparency and efficiency in Nigeria’s student loan administration, with the broader objective of ensuring that financial difficulties do not prevent eligible students from accessing higher education.
