NELFUND to replace direct school payments with digital token system

The Nigerian Education Loan Fund (NELFUND) has announced plans to scrap its current system of paying tuition fees directly to tertiary institutions and replace it with a digital token-based payment system. The Managing Director of NELFUND, Akintunde Sawyerr, disclosed this during an interview on ARISE News on Sunday, stating that the upgrade is aimed at eliminating double payments and improving transparency in the disbursement process.

How the token system will work

According to Sawyerr, under the new system, students will hold their tuition funds as a digital token on their mobile phones. When they go to the bursary, they can push a button to make the payment and proceed with their classes. “We’re looking at a tokenized system where the student has the funds effectively as a token on their telephone, and when they go to the bursary, they can effectively push a button that makes the payment, and then they’re allowed to carry on with classes,” Sawyerr said.

He added that once the upgrade is completed, NELFUND will no longer transfer tuition fees directly to schools. “Once we are able to successfully achieve that upgrade in the system, it will mean that we no longer pay the schools; the student pays the schools but through a token,” he said.

Why NELFUND chose not to pay students directly

Sawyerr explained that the agency deliberately chose not to pay tuition loans directly into students’ bank accounts to prevent diversion of funds away from education. According to him, allowing students unrestricted access to tuition funds could undermine the primary objective of the scheme. “We chose not to pay students directly for the loans because that would take us into an entirely new area where students get paid for the fees, and they can then make the decision as to whether they want to go to school or not,” he said.

He said the administration of President Bola Tinubu established the scheme to ensure that qualified Nigerians are not denied access to tertiary education because of financial constraints. “The objective is to ensure that those who have the capacity to go to a tertiary institution are not hindered because they don’t have money,” he said. The NELFUND boss noted that while students receive upkeep stipends directly, tuition payments are sent through a controlled process to guarantee that the funds are used for their intended purpose.

Addressing double payment complaints

The proposed payment overhaul comes after NELFUND received numerous complaints from students whose institutions received tuition payments from both the students and the loan fund, creating cases of double payment. Sawyerr attributed the problem to the fact that the student loan programme commenced in the middle of an academic session, forcing many students to pay their fees to meet examination and registration deadlines before their loan applications were processed.

He said the digital token system, alongside aligning loan disbursements with academic calendars, is expected to significantly reduce such occurrences going forward. “The fact that we’re now aligning our payment and application cycles to the academic cycle will ease these problems. I don’t think problems ever go away, there’ll be new ones, but we’ll deal with them as they come along,” he said.

The new payment model forms part of NELFUND’s broader efforts to strengthen accountability and improve the efficiency of Nigeria’s student loan programme as beneficiary numbers continue to grow.

What you should know

Earlier this year, Nairametrics reported that NELFUND had disbursed a total of N206.29 billion in student loans to 1,164,222 beneficiaries since the launch of its student loan programme. This was revealed in the fund’s Daily Status Report generated on March 9, 2026, from the NELFUND student loan portal dashboard. According to the report, 1,734,985 students have applied for the scheme since the application portal opened on May 24, 2024. Of that number, more than 1.16 million students have received loan disbursements for tuition fees and monthly upkeep allowances.