JUST IN: NELFUND BEGINS TOKENISED PAYMENT SYSTEM TO PREVENT DOUBLE SCHOOL FEE PAYMENTS

By ‘Balogun Ibrahim

The Nigerian Education Loan Fund (NELFUND) has commenced a pilot of a tokenised payment system aimed at preventing students from paying their school fees twice and eliminating 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.

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

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According to Sawyerr, the initiative is designed to address cases where students unknowingly pay fees that NELFUND has already settled on their behalf.

He said delays in notifying beneficiaries about completed payments had led some students to make duplicate payments, subsequently creating the need for refunds.

“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 explained that such situations could occur when the fund transferred money to an institution, but a student, unaware of the payment, independently paid the same fees to meet the school’s deadline.

He illustrated the scenario with an example in which NELFUND paid a school on Monday, while a student who had not received notification paid the fees by Wednesday and only discovered the earlier transaction on Friday.

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

The managing director said the new system would reduce such occurrences by allowing students to initiate payments themselves, with the funds transferred directly to their 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 explained that beneficiaries would receive notifications once their approved fees were ready for payment and could then authorise the transactions using an application on their mobile phones.

Once authorised, the funds would be transferred directly to the designated institution, reducing the risk of duplicate payments.

Sawyerr stressed that the system would not involve handing cash to students but would instead give them control over initiating payments while restricting the use of the approved funds.

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

He added that the system would prevent beneficiaries from transferring the funds to their personal accounts or redirecting them to other institutions.

Responding to questions about whether students could move the money into their personal accounts after receiving it in a wallet, Sawyerr said the tokenised arrangement would restrict payments to the institution for which they had been approved.

“The system, the token, not only can they not transfer it to their personal account, they can’t transfer it to any other school,” he said.

He explained that a student with an approved payment of N200,000, for instance, would only be able to authorise a transfer to the designated institution.

“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, also clarified that the token would be linked 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 each token could only be used to direct payments to the institution attached to it.

Iyal confirmed that the pilot phase had begun, with the fund receiving close to 400,000 applications at the time of the briefing.

He reiterated that the institution-linked arrangement was designed to prevent funds from being diverted to students’ personal accounts or redirected to other schools.

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’ schools, while upkeep allowances are transferred to beneficiaries’ bank accounts. The proposed tokenised system specifically concerns institutional fee payments and does not change the usual arrangement for upkeep allowances.

The loan scheme is intended to ease the financial burden of tertiary education and improve access for students who might otherwise struggle to pay their school fees.

However, coordinating payments among NELFUND, beneficiaries and tertiary institutions remains important to ensure that applications are verified, approved amounts are accurate and transactions are properly recorded.

Sawyerr’s remarks suggest that delays in communicating completed payments have contributed to administrative challenges, particularly when students pay independently to meet registration or other academic deadlines.

The proposed system is expected to address this problem by allowing students to authorise payments through institution-specific tokens.

Although the pilot has commenced, the officials did not announce a specific date for full implementation. They also did not clarify how many of the nearly 400,000 applications received had already been processed through the pilot.

The effectiveness of the arrangement will depend on how efficiently students, institutions and NELFUND coordinate payment authorisation, confirmation and record-keeping, particularly where schools impose strict deadlines for fee payments and registration.