The Nigerian Education Loan Fund (NELFUND) has commenced a pilot of a tokenised payment system designed to prevent students from paying their school fees twice and reduce complications associated with refunds.
The initiative will allow beneficiaries to authorise payments directly to their respective institutions through tokens linked to their schools, instead of receiving approved tuition funds in their personal bank accounts.
NELFUND Managing Director and Chief Executive Officer, Akintunde Sawyerr, disclosed this during a press briefing on Wednesday, explaining that the new arrangement was developed to address payment errors caused by delays in notifying students that their fees had already been settled by the fund.
The fund’s Executive Director, Mustapha Iyal, also confirmed that the pilot had commenced, disclosing that NELFUND had received close to 400,000 applications at the time of the briefing.
However, the officials did not announce a specific date for full implementation or disclose how many beneficiaries had entered the pilot phase.
How NELFUND’s New Tokenised Payment System Will Work
Under the proposed arrangement, students whose institutional fees have been approved will receive notifications when the funds are ready for payment.
Beneficiaries will then be able to authorise transactions through an application on their mobile phones, allowing the money to be transferred directly to their designated institutions.
The system is intended to give students greater control over when payments are initiated while ensuring that the funds remain restricted to their approved purpose.
Sawyerr explained that the initiative would not involve paying tuition funds into students’ personal bank accounts.
Instead, the tokenised arrangement would allow beneficiaries to initiate payments without giving them unrestricted access to the money.
“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 added that the system would prevent students from redirecting approved institutional payments to personal accounts or other schools.
Why NELFUND Is Introducing the New Payment System
According to Sawyerr, the initiative was developed to address cases in which students unknowingly paid school fees that NELFUND had already settled.
He explained that delays in communicating completed payments sometimes left beneficiaries unaware that their institutions had received money from the fund.
As a result, some students made additional payments to meet registration deadlines, only to discover later that their fees had already been paid.
Sawyerr illustrated the problem with a scenario in which NELFUND paid an institution on Monday, but a student independently paid the same fees on 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.
Such cases can create additional administrative work for students, institutions and the fund, particularly when duplicate transactions must be reconciled and refunds processed.
The tokenised payment system is intended to reduce these complications by allowing students to authorise approved payments themselves after receiving notification.
NELFUND Says Students Cannot Transfer Funds to Personal Accounts
Sawyerr stressed that the new arrangement would not operate like a conventional digital wallet.
According to him, each token would be restricted to the institution for which the payment had been approved.
Using an approved payment of ₦200,000 as an example, he explained that the beneficiary would only be able to authorise the transfer 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 arrangement is intended to prevent the misuse or redirection of tuition funds while giving students control over the timing of authorised payments.
Iyal also clarified that the token would not function as a personal wallet or mobile money account.
“It’s not a personal wallet, it’s not a mobile money wallet at all,” he said.
He explained that the token would be linked to a specific institution and could only be used to direct payments to that school.
The restrictions are designed to ensure that approved tuition funds are used for their intended purpose rather than transferred to students’ personal accounts or redirected to other institutions.
NELFUND Receives Close to 400,000 Applications
During the briefing, Iyal disclosed that the fund had received close to 400,000 applications.
“As I speak to you, we already have close to 400,000 applications,” he said.
The figure reflects applications received at the time of the announcement. It should not be interpreted as the number of students already participating in the tokenised payment pilot.
The officials did not disclose the number of beneficiaries enrolled in the trial or the number of transactions completed through the new system.
They also did not announce when the pilot would be completed or when the system would become fully operational.
The trial is expected to help assess how effectively the arrangement addresses payment delays, duplicate transactions and refund-related complications.
Its effectiveness will depend on reliable notifications, smooth payment authorisation and accurate reconciliation of transactions between NELFUND and participating institutions.
Will NELFUND’s New System Affect Upkeep Allowances?
The proposed tokenised payment system focuses on institutional charges and should not be confused with the separate process for disbursing upkeep allowances.
Under NELFUND’s existing arrangement, approved institutional charges are paid directly to students’ schools, while upkeep allowances, where requested and approved, are paid into beneficiaries’ bank accounts.
The new arrangement is intended to change how students authorise institutional payments rather than give them direct access to tuition funds.
The officials did not announce a change to the separate upkeep allowance process during the briefing.
Students should therefore distinguish between tuition payments made to their institutions and upkeep allowances for which they may qualify under the programme’s applicable requirements.
What the New NELFUND Payment System Means for Nigerian Students
The tokenised payment initiative could help address a practical problem faced by students who must meet tuition and registration deadlines while waiting for confirmation of their education loan payments.
By notifying beneficiaries when approved fees are ready and allowing them to authorise payments, the system is intended to reduce uncertainty over whether their institutions have received the money.
It could also help reduce the administrative burden associated with duplicate payments, payment reconciliation and refund requests.
However, the benefits will depend on how effectively the pilot addresses communication delays and how smoothly students, NELFUND and participating institutions coordinate their processes.
Students should continue to follow official NELFUND communications and their institutions’ payment instructions while the pilot is being evaluated.
About NELFUND and Nigeria’s Student Loan Programme
The Nigerian Education Loan Fund administers the Federal Government’s student loan programme established under the Students Loans (Access to Higher Education) Act, 2024.
The programme provides eligible Nigerian students with access to interest-free loans for approved educational expenses, including institutional charges and, where requested and approved, upkeep expenses.
The tokenised payment initiative is intended to improve the administration of institutional payments and address problems associated with delayed notifications and duplicate school fee transactions.
Although the pilot has commenced, NELFUND has not announced a specific date for full implementation or disclosed how many students are participating in the trial.
The success of the arrangement will depend on timely communication, reliable payment authorisation and accurate records of transactions between the fund and participating institutions.