NELFUND Introduces token system to prevent double school fee payments

The Nigerian Education Loan Fund (NELFUND) has begun piloting a token-based payment system designed to prevent students from paying their school fees twice and reduce complications associated with refunds.

The Managing Director and Chief Executive of NELFUND, Akintunde Sawyerr, disclosed this on Wednesday, October 28, 2026, during a press briefing, explaining that the system would allow students to authorise payments directly to their institutions through tokens linked to designated schools.

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The announcement comes as the fund has received close to 400,000 applications under its ongoing student loan programme, according to its Executive Director, Mustapha Iyal.

Under the proposed arrangement, beneficiaries would receive notifications when their approved institutional fees are ready for payment and use an application on their phones to authorise the transactions.

Rather than receiving institutional fee funds in their personal bank accounts, students would initiate payments that go directly to the schools for which the loans were approved.

Sawyerr said the new system was developed in response to cases in which students paid their fees independently because they had not been informed that NELFUND had already transferred the money to their institutions.

He explained that delays in notifying beneficiaries about completed transactions had sometimes resulted in duplicate payments and subsequent refund requests.

According to the managing director, the situation could occur when NELFUND settled a student’s fees but the beneficiary, unaware of the payment, independently paid the same amount to meet a school’s deadline.

Using an example, Sawyerr said the fund could pay an institution on Monday, while a student who had not received confirmation might pay the same fees by Wednesday and only discover the earlier transaction on Friday.

He described such incidents as genuine errors rather than deliberate wrongdoing.

“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 new process would allow beneficiaries to authorise payments themselves, helping ensure that transactions were reflected directly in their institutions’ accounts.

Sawyerr stressed that the arrangement was not a cash-disbursement system but a mechanism that gave students control over initiating approved payments while restricting the destination of the funds.

“We’re not giving the students money, but we’re giving them power,” he said.

Under the system, a beneficiary would be unable to transfer approved institutional fee funds to a personal bank account or redirect them to another school.

Sawyerr explained that if a student’s approved payment was ₦200,000, the transaction could only be authorised for the designated institution.

He said the funds would remain undistributed until the student initiated the payment, adding that the token would prevent transfers to unauthorised accounts or institutions.

Iyal reinforced the explanation, stating that the token would be linked to a specific school rather than a personal or mobile money wallet.

“It’s not a personal wallet, it’s not a mobile money wallet at all,” he said.

He explained that the arrangement was intended to ensure that approved funds could only be directed to the institution for which the payment had been authorised.

Iyal confirmed that the pilot phase had commenced and disclosed that the fund had received close to 400,000 applications at the time of the briefing.

However, the figure refers to applications received and should not be interpreted as the number already processed through the new payment system.

The officials did not announce a specific date for full implementation during the briefing.

The system’s effectiveness will depend partly on how smoothly NELFUND, students and tertiary institutions coordinate payment authorisation, confirmation and record-keeping, particularly when schools set deadlines for fee payments and registration.

NELFUND administers the Federal Government’s student loan programme established under the Students Loans (Access to Higher Education) Act, 2024.

The scheme provides eligible Nigerian students with access to interest-free loans to cover approved institutional charges and, where requested and approved, upkeep expenses.

Under the existing arrangement described in the source material, institutional charges are paid directly to students’ schools, while approved upkeep allowances are transferred to beneficiaries’ bank accounts.

The proposed token system focuses on institutional fee payments and does not indicate a change to the ordinary process for transferring upkeep allowances.

The loan programme 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, effective administration requires coordination among the fund, beneficiaries and institutions to ensure that applications are verified, approved amounts are accurate and payments are properly recorded.

By introducing student-authorised, institution-linked payments, NELFUND hopes to reduce duplicate transactions and refund complications arising when beneficiaries are unaware that their fees have already been settled.

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The pilot will provide an opportunity to assess how the arrangement works in practice before any wider implementation is announced.