The Nigerian Education Loan Fund (NELFUND) has begun piloting a token-based payment system designed to prevent students from paying their school fees twice and reduce complications associated with refunds.
The Managing Director and Chief Executive Officer of NELFUND, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, saying the new arrangement would enable beneficiaries to authorise payments directly to their institutions using tokens linked to their respective schools.
Sawyerr explained that the system was developed to address cases in which students paid their fees without knowing that NELFUND had already settled the bills, resulting in duplicate payments and subsequent refund requests.
According to him, delays in communicating completed transactions had left some beneficiaries unaware that their institutions had received payments from the fund.
He illustrated the problem with an example of a situation where NELFUND paid a student’s fees on Monday, but the student, unaware of the transaction, made another payment on Wednesday before discovering the earlier payment on Friday.
He described such incidents as genuine errors rather than deliberate attempts to obtain money twice.
To address the challenge, Sawyerr said students would receive notifications when their approved fees were ready for payment and would then be able to authorise the transactions through an application on their phones.
Once authorised, the funds would be transferred directly to the designated institution, reducing the likelihood of duplicate payments.
He stressed that the arrangement would not give students unrestricted access to the money, as the funds could neither be transferred to personal bank accounts nor redirected to another institution.
“We’re not giving the students money, but we’re giving them power,” Sawyerr said, explaining that beneficiaries would control when payments were initiated while the system restricted how the funds could be used.
NELFUND Executive Director, Mustapha Iyal, also confirmed that the pilot phase had commenced, with close to 400,000 applications received under the ongoing process.
Iyal clarified that the token would be linked to a specific institution and would not operate as a personal or mobile money wallet.
He said the arrangement was intended to ensure that approved funds could only be used to pay the institution designated for each beneficiary.
Although the pilot has commenced, officials did not announce a specific date for full implementation or state how many of the applications received had already been processed through the pilot system.
The initiative is part of efforts to improve the administration of the Federal Government’s student loan scheme by strengthening payment control and reducing avoidable financial and administrative difficulties for students and tertiary institutions.