The Nigerian Education Loan Fund (NELFUND) has begun piloting a tokenised payment system that will allow students to authorise school fee payments directly to their institutions, in a move aimed at preventing double payments and reducing refund complications.
NELFUND Managing Director, Akintunde Sawyerr, disclosed the development during a press briefing on Wednesday, October 28, explaining that the new arrangement would address cases in which students unknowingly paid fees already settled by the fund.
According to a report published by The Punch on October 28, Sawyerr said delays in notifying students about completed payments had caused some beneficiaries to pay their school fees twice, forcing them to seek refunds from their institutions.
Under the new system, students will receive notifications when their approved fees are ready for payment and use an application on their mobile phones to authorise the transactions.
The funds will then be transferred directly to the designated institution, while the student retains control over initiating the payment.
“We’re not giving the students money, but we’re giving them power,” Sawyerr said.
He explained that the system was designed to prevent situations in which NELFUND pays a school but an uninformed student independently settles the same bill to meet a registration deadline.
Sawyerr described such cases as genuine errors arising from communication delays rather than deliberate wrongdoing.
The new arrangement is expected to reduce the administrative burden associated with refunds while improving coordination between students, their institutions and the loan fund.
NELFUND Executive Director of Operations, Mustapha Iyal, clarified that the token would not function as a personal or mobile money wallet.
Instead, each token would be linked to a specific institution, restricting the approved funds to payment of the beneficiary’s charges at that school. Students would not be able to transfer the money into personal bank accounts or redirect it to another institution.
Iyal confirmed that the pilot phase had commenced but did not announce a date for full implementation.
The development comes as NELFUND continues to expand its student loan programme. During the October 28 briefing, the agency disclosed that it had received nearly 400,000 applications under the ongoing application process.
The figure represents applications received and should not be interpreted as the number already processed through the new payment system.
Separately, Nairametrics reported on October 4, citing NELFUND’s disbursement report generated on October 3, that the fund had disbursed ₦372.62 billion since its student loan portal opened in May 2024.
Of that amount, ₦192.89 billion had been paid to 319 beneficiary institutions for tuition and other institutional charges, while ₦179.73 billion had been released as upkeep allowances.
The tokenised payment arrangement specifically targets institutional charges. Upkeep allowances will continue to be paid directly into students’ bank accounts under the existing arrangement.
The effectiveness of the new system will depend on timely notifications, accurate payment records and effective coordination between NELFUND and tertiary institutions.
For students, the intended benefit is a more transparent payment process that reduces the risk of paying the same fees twice and the uncertainty of waiting for refunds.
Until full implementation is officially scheduled, beneficiaries are advised to monitor official NELFUND channels and their institutional portals for updates on when the tokenised authorization feature will become active for their specific schools.
