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 Managing Director and Chief Executive of NELFUND, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, explaining that the new system would allow students to authorise payments directly to their institutions through tokens linked to their schools.
According to Sawyerr, the initiative is aimed at addressing cases where students pay their fees without knowing that NELFUND has already transferred the money to their institutions.
He explained that delays in notifying students about completed payments had led to situations where some beneficiaries made duplicate payments, requiring institutions to process refunds.
Sawyerr said the new arrangement would give students the ability to initiate payments themselves through an application on their phones.
Under the proposed system, students would receive notifications when their approved institutional fees were ready for payment and could then authorise the transfer directly to their schools.
The fund said the arrangement would reduce the risk of students making payments independently after NELFUND had already settled their fees.
Sawyerr described the development as a measure to give students greater control over the payment process while ensuring that the funds were used strictly for their intended purpose.
He stressed that the system would not allow students to transfer approved institutional charges into their personal bank accounts or redirect the money to another institution.
The NELFUND chief executive explained that each token would be linked to a specific school, restricting the payment to the institution for which it had been approved.
He said the money would remain in the system until the student authorised the payment, adding
that it could not be transferred to a personal account or another school.The fund’s Executive Director, Mustapha Iyal, also explained that the token was not a personal or mobile money wallet but a payment mechanism tied to a designated institution.
Iyal confirmed that the pilot phase had commenced, with close to 400,000 applications received under the ongoing student loan process.
However, the officials did not clarify how many of the applications had already been processed through the pilot system.
The introduction of the tokenised payment system comes amid challenges associated with the coordination of payments between NELFUND, students and tertiary institutions.
Under the existing arrangement, approved institutional charges are paid directly to students’ institutions, while upkeep allowances, where approved, are paid into beneficiaries’ bank accounts.
The proposed token system is specifically designed to address institutional fee payments and does not change the existing arrangement for upkeep allowances.
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 approved institutional charges and, where requested and approved, upkeep expenses.
The fund said the new payment mechanism was intended to reduce the administrative burden associated with refund requests arising from duplicate payments.
Students who pay their fees before NELFUND’s disbursement reaches their institutions may still encounter situations where refunds become necessary.
The effectiveness of the new system will depend on how well students, institutions and NELFUND coordinate payment authorisation, confirmation and records, particularly where schools impose deadlines for fee payments and registration.
Although the pilot has commenced, the officials did not announce a specific date for its full implementation.
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