Business
NELFUND: Corruption scourge threatens one-year old students’ loan scheme
Banks, varsities implicated
The recent scandal that has rocked the disbursement of NELFUND’S students’ loan has become a source of concern to students, parents and stakeholders.
When President Bola Tinubu came to power, he promised to make tertiary education accessible to all classes of people, saying that in his administration lack of finance shall no longer be a hindrance to quality education, promising to set up a loan board. This followed the liberalization of school fees in federal universities, which prompted students’ protests across the country and public outcry.
Thus, on April 3, 2024, President Tinubu signed the Students Loan (Access to Higher Education) (Repeal and Re-enactment) Act, 2024, into law. The earlier version introduced in 2023 had to be withdrawn as a result of identifiable loopholes and shortcomings. The new law established the Nigerian Education Loan Fund (NELFUND) and addressed challenges encountered with the previous 2023 Act. The primary goal was to ensure sustainable higher education and functional skill development for Nigerian students.
He did not reckon that the laudable scheme would experience implementation hiccups as presently seen in the exploitation of the loan by corrupt officials in universities and banks.
Corrupt Practice
Investigations by the National Orientation Agency (NOA) and the Nigerian Education Loan Fund (NELFUND) have opened a Pandora box of unethical practices in the disbursement of the federal government’s student loan fund by several tertiary institutions across the country.
According to the findings, some universities and financial institutions have allegedly entered into unholy alliance conspiratorially to withhold or delay loan disbursements meant for students, sending alarming signals and concerns over issues of transparency and accountability in the new student loan scheme.
Two weeks ago, the Deputy Director of Communications and Media, NOA, Paul Odenyi, in a release reiterating the agency’s resolve to ensuring that the objectives of the student loan scheme are not derailed, said. “This is about safeguarding the future of education in Nigeria,”
The statement stated that the Director General of NOA, Mallam Lanre Issa-Onilu, as having disclosed the corruption in the disbursement of the loans following a strategic meeting with the Managing Director of NELFUND, Mr. Akintunde Sawyerr two weeks ago.
Onilu’s revelation, according to the release, was anchored on reports collated by Community Orientation and Mobilisation Officers (COMO) across the country.
“Our officers have been engaging with students and education stakeholders. We received credible reports indicating that some institutions, in collusion with banks, are withholding vital information about the loan disbursements, or failing to credit students even after funds have been released,” Issa-Onilu said.
The disturbing discovery, he said, signals a worrisome pattern wherein institutions allegedly receive funds directly from NELFUND but deliberately fail to notify students, or reflect the payments in their financial records. In some cases, students were still asked to pay tuition fees out-of-pocket, despite their loans being approved and disbursed on paper.
In confirmation of the latest malpractice, NELFUND Managing Director, Mr. Akintunde Sawyerr, said that his agency is battle ready to take legal action against any institution found culpable.
“Recent findings by NELFUND have shown that some institutions have received student loan disbursements directly into their accounts yet neglect to inform the affected students or record the payments in their financial records, leading to unnecessary confusion.
“Withholding critical financial information from students is not only unethical but also a breach of the principles on which NELFUND was founded.” Sawyerr said
Action Needed
Jacob Adebayo, a civil servant told Business Hallmark that ” the loan scheme is a good development for the education sector. The scheme designed to ameliorate the financial burden on students and improve access to tertiary education, is in great danger, and may lose credibility if such practices are not promptly addressed.
Dr. Akamo Alebiosu, an education psychologist, asked the federal government to “As a matter of urgency set up high power investigation into the alleged corruption in the disbursement of the loans, and any banks and institutions found guilty should be sanctioned to serve as a deterrent to others.
In addressing the development , NOA, it was learnt, had issued a nationwide directive to all state directorates to gather feedback from students and monitor the implementation of the loan scheme. The agency vowed to apply appropriate disciplinary and legal actions against schools and banks found to be in violation.
“The federal government’s student loan initiative is a lifeline for many Nigerian families. It must not be undermined by the selfish interests of a few actors within the system, we are committed to working with NELFUND and other relevant agencies to protect the rights of students.” said Issa-Onilu
Irked by the revelation, stakeholders in the education sector have urged the government to take swift and decisive action against any institutions and banks found culpable. Student advocacy groups have also begun calling for transparency dashboards and complaint channels to ensure beneficiaries can track their loan status independently.
Already, the National Association of Nigerian Students has voiced grave concern over the alleged non-disbursement of students’ loans by the Nigerian Education Loan Fund, despite claims that funds have already been released.
The NANS through its National Public Relations Officer, Samson Adeyemi, in a statement last Wednesday, described such practices as “deceptive and a betrayal of trust by the universities.”
Adeyemi averred that allegations of unethical practices and corruption in the loans disbursement could further compound the challenges faced by Nigerian students.
He added , “These actions, which include failing to inform students about loan disbursements and demanding tuition payments despite receiving funds, are not only deceptive but also a betrayal of the trust placed in these institutions.
“NANS views these practices as a direct attack on the rights and welfare of Nigerian students, many of whom rely on these loans to access higher education and alleviate financial burdens.
The student’s body warned institutions that may be engaging in such practices to desist, as it would not hesitate to protest against any institution found culpable.
Before the current scandals, Disbursements so far
had largely been a success, according to NELFUND.
Performance Rate
The agency has disbursed a total of N45.1 billion in student loans across the country since its inception in May 2024 to March 2025.
According to the update on its official X page, a total of 525,936 students have enrolled on the loan platform, with 445,015 applicants successfully applying for financial assistance. This reflects 84 percent success rate for student loan applications under the scheme.
It noted that despite the significant approval of N147.9 billion in funds, the actual disbursement as at March 25, 2025, stood at N45.1 billion. The report showed that N29.86 billion had been released for institutional fees, while N15.23 billion was disbursed as upkeep allowances.
NELFUND also stated that as of late last month, there was a great increase in the number of successful applicants, with a 192 per cent rise in new registrants, who succeeded in their applications.
The data further stated that an additional 1,313 students registered, while 2,523 new applicants successfully completed their loan applications.