NELFUND launches token system to prevent duplicate tuition payments

The Nigerian Education Loan Fund (NELFUND) has started a pilot of a tokenised payment system to stop students paying tuition fees twice. The new arrangement will let students authorise payments from their approved loan funds through a token linked to the specific institution, removing the need for refunds when the fund has already settled the fees.

Managing Director Akintunde Sawyerr explained that duplicate payments occurred because institutions sometimes received the fund’s payment before informing the beneficiaries. He gave an example where NELFUND paid an institution on Monday, a student paid the same fees on Wednesday, and only learned of the earlier payment on Friday. It was a genuine error, no suspicion, no accusation, just genuine error, he said.

Under the token system, the student will use a phone to trigger the transfer of the approved tuition amount directly to the designated school. The fund will not move loan money into personal bank accounts, instead, it gives students the power to authorise the payment. Sawyerr stressed that if the student does not press the button, the money stays with the fund and cannot be transferred elsewhere.

Executive Director Mustapha Iyal added that the token is linked to the institution, not to a personal or mobile-money wallet. Payments will be processed using the applicant’s identification number and wallet number rather than bank account details. He noted that the pilot is handling transactions for almost 5,000 students each day, with about 20,000 new applications recorded in the week before the briefing.

The fund continues to pay institutional fees directly to participating schools, while upkeep allowances are sent to students’ bank accounts via NIBSS Instant Payments and Paystack. Iyal warned that external payment channels for upkeep allowances can sometimes cause delays depending on the banks involved.

NELFUND also plans re-education workshops across the six geopolitical zones to inform students, parents and institutions about the new token process. Sawyerr said the workshops will go beyond ordinary sensitisation, aiming to ensure all stakeholders understand the changes. He invited journalists to attend and asked the media to help spread the information, acknowledging that regional workshops may not reach every student.

The pilot reflects NELFUND’s broader effort to improve transparency and curb double-dipping where students receive loan funds while still relying on parental payments. The fund intends to introduce a system for parents to verify whether their children’s fees have been paid without revealing exact amounts. These steps are part of a larger strategy to strengthen the student loan scheme and reduce administrative complications for beneficiaries and institutions alike.