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 reduce complications associated with refunds.
NELFUND Managing Director, Akintunde Sawyerr, disclosed the development during a press briefing on Wednesday, noting that the initiative comes as the fund has received nearly 400,000 applications.
“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, said the new system would enable students to authorise payments directly to their institutions through tokens linked to their respective schools, rather than receiving institutional loan funds in their personal bank accounts.
“We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students,” he said.
He gave a scenario in which NELFUND paid an institution on Monday, but a student, unaware of the transaction, paid the same fees by Wednesday before learning of the fund’s payment on Friday.
“It was a genuine error, no suspicion, no accusation, just genuine error,” Sawyerr said.
According to him, under the proposed arrangement, students would authorise payments through an application on their phones, with the funds transferred directly to the designated institution.
“We’re not giving the students money, but we’re giving them power,” he said.
He added that the tokens would restrict transactions to the institution for which the funds had been approved, preventing beneficiaries from transferring the money to personal accounts or redirecting it to other schools.
“For instance, if a student has an approved payment of ₦200,000, the student 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 added.
The Fund clarified that the token was not a personal or mobile money wallet but a payment authorisation mechanism tied to a specific institution.
“It’s not a personal wallet, it’s not a mobile money wallet at all,” he said.
He confirmed that the pilot phase had commenced but did not provide a specific timeline for the system’s full implementation.
The ICIR reports that President Bola Tinubu signed the Student Loans (Access to Higher Education) Act (Repeal and Re-Enactment) Bill into law on Wednesday, April 3, 2024, following approval by the Senate on Wednesday, March 20 to 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 approved upkeep allowances are transferred to students’ bank accounts. The proposed tokenised system focuses on institutional payments rather than the ordinary disbursement of upkeep allowances.
The scheme is intended to ease the financial burden of tertiary education and expand access for students who might otherwise struggle to meet the cost of schooling.
Nanji is an investigative journalist with the ICIR. She has years of experience in reporting and broadcasting human angle stories, gender inequalities, minority stories, and human rights issues. She has documented sexual war crimes in armed conflict, sex for grades in Nigerian Universities, harmful traditional practices and human trafficking.