The Nigerian Education Loan Fund (NELFUND) has introduced a pilot token-based payment system designed to prevent students from paying their school fees twice and reduce complications arising from refund requests.
The Managing Director of NELFUND, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, explaining that the proposed arrangement would give students greater control over the initiation of payments while ensuring that approved funds are sent directly to their respective institutions.
Under the system, beneficiaries would receive notifications when their approved institutional fees are ready for payment and use a mobile application to authorise the transactions through tokens linked to their schools.
Sawyerr said the initiative was developed in response to cases in which students paid their fees independently because they were unaware that NELFUND had already settled the bills.
He explained that delays in communicating completed payments had sometimes resulted in duplicate transactions, forcing institutions and beneficiaries to navigate refund procedures.
“We discovered that there were some issues with students being informed in good time that their payments had been made by NELFUND, which meant that some of them would pay because they hadn’t realised that NELFUND had paid already,” he said.
According to him, a student could pay an institution on Wednesday without knowing that NELFUND had transferred the same amount on Monday, only to discover the earlier transaction on Friday.
“It was a genuine error, no suspicion, no accusation, just genuine error,” Sawyerr said.
He said the tokenised arrangement would allow students to initiate payments themselves, with the money transferred directly to the designated institution once authorised.
“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” he added.
Sawyerr stressed that the system would not give beneficiaries unrestricted access to the loan funds but would allow them to determine when approved institutional payments should be initiated.
“We’re not giving the students money, but we’re giving them power,” he said.
He added that the tokens would prevent students from transferring approved school-fee funds into their personal bank accounts or redirecting them to other institutions.
NELFUND’s Executive Director, Mustapha Iyal, explained that each token would be tied to a particular school rather than a personal or mobile money wallet.
“It’s not a personal wallet, it’s not a mobile money wallet at all,” Iyal said.
He confirmed that the pilot had commenced and disclosed that the fund had received close to 400,000 applications.
However, the figure represents applications received, not necessarily applications already processed through the pilot.
The officials did not announce a specific date for the nationwide implementation of the new payment arrangement.
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 interest-free loans for approved institutional charges and, where requested and approved, upkeep expenses.
The proposed token system focuses on institutional payments. Under the existing arrangement, approved school fees are paid directly to institutions, while approved upkeep allowances are transferred to students’ bank accounts.
The effectiveness of the new mechanism will depend on timely communication among NELFUND, students and tertiary institutions, as well as accurate payment records to prevent duplicate transactions and ensure that beneficiaries meet registration deadlines.
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