The Nigerian Education Loan Fund (NELFUND) has begun piloting a payment approval system that allows students to authorise school fee payments through a token linked to their institution.
NELFUND Managing Director Akintunde Sawyerr announced the initiative at a press briefing on Wednesday, revealing that the fund had received nearly 400,000 applications.
The system is designed to ensure that approved tuition payments go directly to the relevant school rather than passing through a student’s personal account.
According to Sawyerr, the token can only be used for payments to the institution for which it was issued. It cannot be transferred to another school or a personal bank account.
NELFUND Seeks to Prevent Students From Paying Fees Twice
The pilot follows concerns that some students have paid school fees themselves after NELFUND had already settled the same charges on their behalf.
Sawyerr explained that delays in notifying students about completed payments had contributed to the problem.
He gave an example in which NELFUND pays a student’s fees on Monday, but the student makes another payment on Wednesday because they have not received confirmation. If the student only discovers the original payment on Friday, the school must arrange a refund.
Sawyerr described such cases as honest mistakes resulting from delays in communication between the parties involved.
The new system is intended to give students a way to approve payments while reducing the likelihood of duplicate transactions.
How the School-Locked Token Works
Under the pilot arrangement, students use an application on their phones to approve payments to their designated institution.
For example, if a student has an approved payment of ₦200,000, the token can only authorise the transfer to the school’s account. The funds cannot be redirected to a personal account or another institution.
If the student does not approve the transaction, the money remains unpaid to the school.
“We’re not giving the students money, but we’re giving them power,” Sawyerr said.
NELFUND clarified that the token is not a mobile money wallet or a personal account. It is a payment authorisation mechanism tied to a specific institution.
Token Applies to School Fees, Not Upkeep Allowances
The new system applies only to school fees and does not change how students receive upkeep allowances.
Under NELFUND’s existing arrangement, approved institutional charges are paid directly to schools, while approved upkeep allowances are transferred to eligible students’ bank accounts.
The school-locked token is intended to strengthen control over fee payments without altering the process used to distribute upkeep funds.
NELFUND Loan Scheme Remains Interest-Free
NELFUND provides interest-free loans to eligible students under legislation signed by President Bola Tinubu in April 2024.
The fund’s latest announcement concerns the pilot of the payment approval system, rather than a change to the loan scheme’s interest terms or the way upkeep allowances are disbursed.
Although the pilot has commenced, NELFUND has not announced a timeline for a full rollout of the token system.
