NELFUND Pilots Tokenised Payment System to Prevent Double School Fee Payments

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 eliminate complications associated with refunds.

 

The fund’s Managing Director, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, revealing that nearly 400,000 applications had been received under the ongoing process.

 

Sawyerr explained that the proposed system would allow students to authorise payments directly to their institutions through tokens linked to their respective schools, instead of receiving approved institutional fees in their personal bank accounts.

 

According to him, the initiative is intended to address cases in which students pay their fees without knowing that NELFUND has already transferred the money to their institutions.

 

“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.

 

Sawyerr illustrated the problem with an example of a student whose institution received payment from NELFUND on Monday but who independently paid the same fees by Wednesday, having yet to receive confirmation of the earlier transaction. The student only discovered the duplicate payment on Friday.

 

“It was a genuine error, no suspicion, no accusation, just genuine error,” he said.

 

He added that the new mechanism would allow students to initiate payments themselves once their approved fees were ready, ensuring that the transactions went directly to the designated institutions.

 

“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 stressed that the arrangement would not involve giving students unrestricted access to the loan funds but would instead allow them to control when approved institutional payments were initiated.

 

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

 

Sawyerr further explained that the system would prevent beneficiaries from transferring the funds to their personal accounts or redirecting them to other institutions.

 

Using an example of a student with an approved payment of N200,000, he said the beneficiary would only be able to authorise the transfer to the designated institution’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.

 

NELFUND Executive Director, Mustapha Iyal, clarified that the token would be tied to a specific institution 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, adding that the arrangement would restrict payments to the institution for which they had been approved.

 

Iyal confirmed that the pilot phase had commenced, with nearly 400,000 applications received at the time of the briefing. However, the officials did not establish how many of those applications had already been processed through the pilot.

 

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 interest-free loans to cover institutional charges and, where requested and approved, upkeep expenses.

 

Under the existing arrangement, approved institutional charges are paid directly to students’ institutions, while upkeep allowances are transferred to beneficiaries’ bank accounts.

 

The proposed tokenised system specifically targets the payment of institutional charges and does not replace the existing arrangement for upkeep allowances.

 

The scheme is intended to ease the financial burden of tertiary education and improve access for students who struggle to meet the cost of schooling. Its administration requires coordination among NELFUND, beneficiaries and tertiary institutions to ensure that applications are verified, payments are accurately recorded and approved funds reach the appropriate destinations.

 

Delayed communication about completed payments has, however, created challenges for some beneficiaries, who may independently settle their fees before learning that NELFUND has already paid their institutions.

 

The pilot is intended to address this problem by allowing students to authorise payments through institution-linked tokens, with the aim of reducing duplicate transactions and the administrative burden of processing refunds.

 

The officials did not announce a specific date for full implementation during the briefing. The effectiveness of the system will depend on how efficiently NELFUND, students and institutions coordinate payment authorisation and confirmation, particularly where schools impose deadlines for fee payments and registration.