NELFUND to Introduce Digital Token System for Tuition Payments, Phases Out Direct School Transfers

The Nigerian Education Loan Fund (NELFUND) has announced plans to introduce a digital token-based payment system that will allow beneficiaries of the Federal Government’s student loan scheme to authorise the payment of their tuition fees directly to their institutions.

The proposed system will replace the agency’s current method of paying tuition fees directly to tertiary institutions, a move aimed at preventing duplicate payments and improving transparency in the administration of the student loan programme.

Managing Director of NELFUND, Akintunde Sawyerr, disclosed the development during a televised interview, explaining that the new payment model will place students at the centre of the tuition payment process without giving them direct access to the loan funds.

According to him, beneficiaries will receive a secure digital token on their mobile phones, which they can use to approve tuition payments whenever they are ready to complete their school registration.

“We’re looking at a tokenised system where the student has the funds effectively as a token on their telephone, and when they go to the bursary, they can push a button that makes the payment,” Sawyerr said.

The NELFUND boss explained that the initiative is one of several reforms being introduced to improve the efficiency of the student loan scheme as the number of beneficiaries continues to increase across the country.

Move Aims to Prevent Double Tuition Payments

The planned introduction of the digital token system follows challenges encountered during the first phase of the student loan programme, where some institutions received tuition payments twice.

The situation arose because many students had already paid their school fees before their loan applications were approved in order to meet registration deadlines.

When NELFUND later disbursed tuition fees directly to the institutions, some schools received payments from both the students and the agency, creating the need for refunds.

The issue generated numerous complaints from affected students, with several institutions coming under scrutiny over delays in refunding excess payments.

NELFUND believes allowing students to authorise tuition payments themselves will significantly reduce the chances of similar cases occurring in future.

Tuition Funds Will Still Go Directly to Schools

Although the new system gives students greater control over the timing of tuition payments, Sawyerr clarified that beneficiaries will not receive tuition loan funds in their personal bank accounts.

He said the agency deliberately avoided paying tuition loans directly to students because doing so could increase the risk of funds being diverted to purposes other than education.

“We chose not to pay students directly because that would take us into an area where they could decide not to use the money for school,” he explained.

Instead, the digital token will simply serve as an authorisation tool, allowing students to trigger payment directly to their institution once they are ready.

According to NELFUND, the arrangement maintains accountability while giving beneficiaries greater flexibility during school registration.

Upkeep Allowances Remain Unchanged

NELFUND also confirmed that the proposed changes apply only to tuition fee payments.

Students who qualify for upkeep support under the loan scheme will continue to receive their monthly allowances directly into their bank accounts.

The upkeep allowance is designed to assist beneficiaries with accommodation, transportation, feeding, study materials and other day-to-day expenses while pursuing their education.

The agency said there are currently no plans to change that aspect of the programme.

Student Loan Programme Continues to Expand

The announcement comes as the Federal Government continues to expand the student loan scheme introduced to improve access to higher education.

Since the programme commenced in 2024, NELFUND says it has received more than 1.7 million applications from students across Nigeria.

The agency also disclosed that over 1.16 million beneficiaries have so far received financial support under the programme, with total disbursements exceeding ₦206.29 billion.

The funds cover tuition fees paid to approved tertiary institutions as well as upkeep allowances paid directly to eligible students.

The steady increase in applications reflects the growing demand for financial assistance as rising tuition costs continue to place pressure on many Nigerian families.

Implementation Guidelines Expected

While NELFUND has confirmed plans to introduce the digital token payment system, the agency has yet to announce when it will officially become operational.

Students are expected to continue using the existing tuition payment process until the new platform is fully deployed.

Further implementation guidelines, including how beneficiaries will access their digital tokens and how participating institutions will integrate with the system, are expected to be released before the rollout begins.

What the New System Means for Students

If successfully implemented, the digital token system is expected to simplify tuition payments while reducing administrative bottlenecks experienced during the programme’s early stages.

By allowing beneficiaries to authorise payments directly at their institutions, NELFUND hopes to eliminate duplicate tuition payments, strengthen accountability and improve the overall efficiency of the student loan scheme.

The reform also represents another step in the agency’s efforts to modernise the administration of education financing in Nigeria as more students continue to benefit from the Federal Government’s interest-free loan programme.