NELFUND pilots token system to prevent duplicate school fee payments

The Nigerian Education Loan Fund (NELFUND) has begun piloting a tokenized payment system designed to prevent students from paying school fees twice and reduce refund complications. The system has already received nearly 400,000 applications and allows students to authorize payments directly to their institutions through a mobile application, with funds restricted to approved schools and unable to be redirected.

NELFUND Managing Director Akintunde Sawyerr explained the problem the system addresses: students sometimes paid fees independently after NELFUND had already transferred money to their schools, unaware of the fund's earlier disbursement due to notification delays. He described a typical scenario: "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." This resulted in duplicate payments and subsequent refund requests. Sawyerr characterized these as genuine errors rather than intentional abuse.

Under the tokenized system, students receive notifications when their approved institutional fees are ready for payment and can then authorize the transaction through their phones. Once initiated, money moves directly to the designated institution. Sawyerr emphasized that the arrangement is not a cash-disbursement system: "We're not giving the students money, but we're giving them power." The token restricts funds to the specific institution for which payment was approved—a student cannot transfer approved funds to a personal account or redirect them to another school. NELFUND Executive Director Mustapha Iyal clarified that the token is institution-linked, not a personal or mobile money wallet.

The tokenized system applies only to institutional charges paid directly to schools. It does not change the existing arrangement for upkeep allowances, which continue to be paid into beneficiaries' bank accounts. NELFUND was established under the Students Loans (Access to Higher Education) Act, 2024, to provide eligible Nigerian students with interest-free loans covering approved education costs.

Beyond the payment system, NELFUND has announced plans for re-education workshops across Nigeria's six geopolitical zones to educate students, parents, and tertiary institutions on how the payment system works. Managing Director Sawyerr indicated that NELFUND has identified cases of students accessing loan support while continuing to place financial burden on their parents, describing the practice as unacceptable. The workshops will clarify institutional payment procedures, upkeep allowances, and required documentation. Sawyerr also noted that parents will be provided with a mechanism to verify whether their children's tuition fees have been paid through NELFUND, though without access to specific amounts.