The Nigerian Education Loan Fund (NELFUND) has begun piloting a token-based payment system designed to prevent students from paying their school fees twice and reduce refund complications, with nearly 400,000 applications reported during the ongoing process.
NELFUND Managing Director, Akintunde Sawyerr, disclosed the development on Wednesday during a press briefing, explaining that the proposed arrangement would allow students to authorise payments directly to their institutions using tokens linked to their respective schools.
Under the system, students would use their phones to initiate payments from approved institutional loan funds rather than receive tuition money in their personal bank accounts.
Sawyerr said the initiative followed cases in which students paid their fees independently because they did not know NELFUND had already transferred money to their institutions.
He explained that delays in communicating completed payments had created situations in which students unknowingly paid the same fees twice, leaving institutions to deal with refunds.
“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.
Sawyerr illustrated the problem with an example of a student who paid fees on Wednesday without knowing that NELFUND had already settled the bill on Monday, only to discover the earlier payment on Friday.
“It was a genuine error, no suspicion, no accusation, just genuine error,” he said.
How the NELFUND token system will work
Sawyerr said the new mechanism would give students control over initiating approved tuition payments while restricting how the money could be used.
Under the proposed arrangement, beneficiaries would receive notifications when their approved institutional charges were ready for payment. They could then authorise the transaction through their phones, directing the money 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,” Sawyerr said.
He stressed that the system would not give students unrestricted access to the loan funds.
“We’re not giving the students money, but we’re giving them power,” he said.
According to Sawyerr, the token would be tied to the institution for which the payment had been approved. Beneficiaries would not be able to transfer the money to personal bank accounts or redirect it to another school.
The fund’s Executive Director, Mustapha Iyal, reinforced the distinction, saying the token 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 had commenced and that close to 400,000 applications had been received.
“As I speak to you, we already have close to 400,000 applications,” he said.
The figure refers to applications received and does not establish how many have already been processed through the token pilot.
What happens to students’ upkeep allowances?
The proposed token system concerns institutional charges, not the ordinary payment of upkeep allowances.
Under NELFUND’s existing student loan arrangement, approved institutional fees are paid directly to eligible students’ institutions, while approved upkeep allowances are paid into beneficiaries’ bank accounts.
The distinction matters because the new arrangement is intended to address duplicate tuition payments and the challenges associated with refunds, rather than eliminate students’ access to approved upkeep support.
The federal student loan scheme operates under the Students Loans (Access to Higher Education) Act, 2024, and provides eligible students with access to zero-interest loans for institutional charges and upkeep.
The scheme requires coordination between NELFUND, beneficiaries and tertiary institutions to ensure that applications are verified, payments are properly recorded and students receive accurate information about their outstanding fees.
The token system is intended to improve that process by allowing students to initiate payments themselves and restricting the approved funds to the designated institution.
However, the officials did not announce a specific date for full implementation during the briefing.
Its effectiveness will depend on how well NELFUND, institutions and students coordinate payment notifications, authorisation and reconciliation, particularly when registration and fee-payment deadlines approach.
