By Emmanuella Opara | October 28th 2026
KEY POINTS
- The Nigerian Education Loan Fund (NELFUND) has started piloting a tokenised payment system to prevent students from paying school fees twice.
- The system will allow beneficiaries to authorise payments to their institutions through a phone application.
- The tokens will be restricted to the institutions for which the fees have been approved and cannot be transferred to personal accounts or other schools.
- NELFUND has received close to 400,000 applications, although officials did not disclose how many have been processed through the pilot.
- The fund has not announced a date for full implementation.
MAIN STORY
The Nigerian Education Loan Fund (NELFUND) has begun piloting a tokenised payment system designed to prevent students from paying school fees twice and reduce the need for refunds when institutions receive payments from the fund after students have already paid independently.
Managing Director of NELFUND, Akintunde Sawyerr, disclosed this on Wednesday at a press briefing, explaining that the system would allow beneficiaries to authorise payments to their institutions through tokens linked to their respective schools.
Under the proposed arrangement, students will receive notifications when their approved fees are ready for payment and use a phone application to authorise the transactions. The funds will then be transferred directly to the designated institutions rather than being paid into students’ personal bank accounts.
Sawyerr said the system was developed in response to cases where beneficiaries paid their fees without knowing that NELFUND had already transferred the money to their institutions.
Delays in notifying students about completed payments have resulted in some beneficiaries paying twice, particularly when they make independent payments to meet school registration deadlines. This has created the need for institutions to process refunds after receiving the loan payments.
“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.
He said the new arrangement would give students control over initiating payments while ensuring the funds could only be used for their approved purpose.
“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” he said.
Sawyerr clarified that the system would not involve giving students cash to manage themselves.
“We’re not giving the students money, but we’re giving them power,” he said.
He added that the tokens would prevent beneficiaries from transferring the approved funds into personal accounts or redirecting them to other institutions.
“The system, the token, not only can they not transfer it to their personal account, they can’t transfer it to any other school,” he said.
NELFUND Executive Director, Mustapha Iyal, explained that the token would be linked to a specific institution and would not function as a personal or 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, adding that the fund had received close to 400,000 applications. However, the officials did not clarify how many of those applications had been processed through the pilot.
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 described on the fund’s website, approved institutional charges are paid directly to schools, while upkeep allowances are transferred to students’ bank accounts. The proposed tokenised system applies to institutional payments and does not change the regular transfer of upkeep allowances.
The scheme is intended to reduce the financial burden of tertiary education and widen access for students who might otherwise struggle to meet education costs. Its effective operation, however, depends on coordination among NELFUND, beneficiaries and institutions to ensure applications are verified, approved amounts are accurate and payments are properly recorded.
The fund has not announced a date for full implementation of the tokenised system. Its effectiveness will depend on how efficiently students, institutions and NELFUND coordinate payment authorisation, confirmation and record-keeping, particularly where schools impose deadlines for fee payment and registration.
THE ISSUES
The proposed system addresses a practical problem in student loan administration: students may pay their fees independently because they have not been informed that NELFUND has already made a payment on their behalf.
By allowing beneficiaries to initiate payments while restricting how approved funds can be used, the system is intended to reduce duplicate payments and the administrative burden of processing refunds.
However, the pilot’s performance will depend on timely notifications, accurate payment records and effective coordination between the fund and participating institutions. The number of applications received should not be confused with the number already processed through the pilot.
WHAT’S BEING SAID
“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,” Akintunde Sawyerr, managing director of NELFUND, said.
“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” Akintunde Sawyerr, managing director of NELFUND, said.
“We’re not giving the students money, but we’re giving them power,” Akintunde Sawyerr, managing director of NELFUND, said.
“The system, the token, not only can they not transfer it to their personal account, they can’t transfer it to any other school,” Akintunde Sawyerr, managing director of NELFUND, said.
“It’s not a personal wallet, it’s not a mobile money wallet at all,” Mustapha Iyal, executive director of NELFUND, said.
WHAT’S NEXT
NELFUND will need to assess the pilot’s effectiveness before full implementation. Key considerations include how quickly students receive payment notifications, how reliably institutions confirm transactions and whether the system reduces duplicate payments and refund requests.
Officials have not announced a timeline for expanding the arrangement or disclosed how many applications have been processed under the pilot.
BOTTOM LINE
NELFUND’s tokenised payment pilot is intended to give students control over initiating school fee payments while ensuring loan funds reach only the institutions for which they were approved. Its success will depend on reliable communication, accurate records and coordination among students, schools and the fund.
