Thursday, October 29, 2026 - The Nigerian Education Loan Fund has begun piloting a tokenised payment system to prevent students from paying their school fees twice and to eliminate refund complications, with nearly 400,000 applications already received under the ongoing process.
NELFUND Managing Director Akintunde Sawyerr disclosed this
on Wednesday during a press briefing, explaining that the new arrangement would
let students initiate payments directly to their institutions through tokens
linked to their schools.
Under the proposed system, students would use an application
on their phones to authorise payments from their approved loan funds to their
institutions, rather than receiving the money in their personal bank accounts.
Sawyerr said the change was intended to address situations
in which students paid their fees without knowing that NELFUND had already
transferred the money to their institutions.
He explained that delays in notifying students about
payments made by the fund had resulted in some beneficiaries making duplicate
payments, creating the need for 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.
According to him, the problem could arise when the fund paid
an institution but the student, unaware of the transaction, proceeded to pay
independently to meet the school’s deadline.
Sawyerr illustrated the situation with an example in which
NELFUND paid an institution on Monday, but a student who did not know about the
payment paid the same fees by Wednesday and only learnt of the fund’s earlier
transaction on Friday.
“It was a genuine error, no suspicion, no accusation, just
genuine error,” he said.
The managing director said the new payment mechanism was intended to eliminate
such situations by allowing students to initiate payments themselves and have
the transactions reflected directly in their institutions’ accounts.
“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 explained that students would receive notifications when
their approved fees were ready for payment and could then authorise the
transaction through their phones.
Once a student initiates the payment, the money would move
directly to the designated institution, reducing the possibility of students
paying fees already covered by NELFUND.
Sawyerr stressed that the arrangement was not a
cash-disbursement system but a mechanism designed to give students control over
the initiation of payments while restricting how the funds could be used.
“We’re not giving the students money, but we’re giving them
power,” he said.
The system would also prevent beneficiaries from transferring the money to
their personal bank accounts or redirecting it to other institutions, he added.
Responding to questions from journalists about whether
students could transfer the funds to their personal accounts after receiving
them in a wallet, Sawyerr said the tokenised system would restrict the funds to
the institution for which the payment had been approved.
“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.
He explained that, for instance, a student whose approved
payment was N200,000 would be able to authorise the transfer only to the
designated school’s account.
“If they don’t push the button, the money doesn’t go
anywhere. It will never be able to be transferred to the personal account of
the student or anybody else,” he said.
The fund’s Executive Director, Mustapha Iyal, also explained
that the token was linked to a specific institution rather than a personal or
mobile money wallet.
“It’s not a personal wallet, it’s not a mobile money wallet
at all,” Iyal said, explaining that each token would be attached to a
particular institution and could only be used to direct payments to that
school.
Iyal confirmed that the pilot phase had commenced, with
close to 400,000 applications received at the time of the briefing.
“As I speak to you, we already have close to 400,000
applications,” he said.
He added that the institution-linked arrangement was
designed to ensure that the money could not be redirected to another school or
a student’s personal account.
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 access to
interest-free loans to cover institutional charges and, where requested and
approved, upkeep expenses. 
Under the existing arrangement described on NELFUND’s official website,
approved institutional charges are paid directly to students’ institutions,
while upkeep allowances are paid into the students’ bank accounts.
The distinction is important because the proposed tokenised
system concerns the payment of institutional charges, not the ordinary transfer
of upkeep allowances to students. 
The loan scheme is intended to ease the financial burden of
tertiary education and improve access for students who might otherwise struggle
to meet the cost of schooling. However, the payment process requires
coordination among NELFUND, beneficiaries and tertiary institutions to ensure
that applications are verified, approved amounts are accurate and payments are
properly recorded.
NELFUND’s payment guidelines and institutional verification
procedures form part of that process. Where students pay their fees before the
fund’s disbursement reaches their institutions, refunds may be required after
the institutions receive the loan payments. 
Sawyerr’s explanation suggests that delayed communication
about completed payments has created another administrative challenge: students
may be unaware that the fund has already settled their fees and make payments
independently to meet registration or other academic deadlines.
The new system is intended to address that gap by giving
students the ability to authorise institutional payments through a token linked
to their schools.
According to Sawyerr and Iyal, the restriction would prevent
the funds from being diverted to personal accounts or transferred to other
institutions.
Although Iyal confirmed that the pilot had commenced, the
officials did not provide a specific date for full implementation during the
briefing. The close to 400,000 applications cited by Iyal should also not be
interpreted as the number of applications already processed through the pilot,
as the briefing did not establish that distinction.
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