The Nigerian Education Loans Fund (NELFUND) – a brain child of President Bola Tinubu administration – was established by the Students Loans (Access to Higher Education) Act, 2024). The Act says that NELFUND was established ‘as a body corporate to receive, manage and invest funds, to provide loans to Nigerians for higher education, vocational training and skills acquisition; and for related matters.’
The three-fold laudable objectives of NELFUND (hereafter referred as the Fund) are to ‘(a) provide loans to qualified Nigerians to pay for tuition, fees, charges, and upkeep during their course of study in approved tertiary institution, vocational and skills acquisition institutions in Nigeria; (b) build, operate and maintain a diversified pool of funds to provide loans to qualified applicants and ensure access to higher education, vocational and skills acquisition; and (c) ensure the recovery of all debts due to the Fund from loans granted to qualified applicants except, where the Board is of the opinion that the borrower should be exempted from repaying his loan by reason of (i) death, or (ii) incapacitation where such results in impossibility or undue difficulty in meeting repayment obligations.’(See NELFUND Act, 2024, Sections 1 & 2).
Section 26 (sub-sections 1 & 2) deal with approval and disbursement of loans. First, ‘applications to the Fund shall be processed and applicants and their selected institutions shall be informed if their applications have been successful not later than 30 days from the date of application.’ Secondly, ‘disbursement of fees and charges payable to institutions and payment of upkeep to successful applicants shall resume not later that 30 days from the commencement of each academic year.’ Section 27 specifies that (a) applicants to the Fund may apply for loans to cover tuition, fees and other charges payable to the institution; and (b) maintenance allowance payable to the student.’
The essence of making reference to section to 26 (1&2); and section 27 (a & b) is to bring out the fact that the Fund on one side and the receiving institutions and successful applicants on the other side, are all involved in the chain of implementation of the loan policy. The Fund directly pays the institutions the tuition fees and other charges, and directly pays to the successful applicants the maintenance allowance. Two major implementation problems constitute the subject of our discussion. The first is the way some tertiary institutions are implementing the loan policy, and the second is the way NELFUND itself is interpreting Section 17 (1), sub-section (c).
With respect to the first major problem, as co-implementers of the loan disbursement, some of the tertiary institution have fraudulently raised their tuition and other fees, which is a huge burden that the students have to bear later during repayment. This crafty way of implementing the Fund’s loan policy is very fraudulent because it compounds the financial crisis of the poor students who borrowed the money. In our economy where remuneration is very poor, how would the fresh graduates who borrowed the money survive when the Act in Section 28, (sub-section 4) requires that ‘repayment of the loan shall be by monthly deductions not exceeding 10% of the gross income of the beneficiary until the loan and all charges are repaid to the Fund.’ Some people may however think that this is fair enough. But some fresh graduates are accepting poorly paid jobs because of lack of befitting ones.
Another emerging crafty way some tertiary institutions are implementing the loan policy came to light few weeks ago. According to Sahara Reporters (October 20, 2026), the Enugu State College of Education (Technical), Enugu (ESCET), has issued a circular making NELFUND Loan Compulsory For All Students, Threatens Them With Exam Bans, Dropout Over Non-Compliance: Students who fail to comply are now facing threats of being barred from taking examinations or forced to drop out entirely.
A copy of the circular which the Sahara Reporters made public is reproduced here to drive the message home. The Internal Memorandum titled: ‘Compulsory Accessing of NELFUND loan by College Students’ reads as follows: This is the bring to the knowledge of all College students and indeed the College Community that it is now compulsory for every student (both in NCE and Degree programmes) to enroll and access the Nigeria Education Loan Fund (NELFund). Consequently, all fresh and continuing students are hereby required to visit the office of the College NELfund Desk Officer Dr. …and apply for the fund, for the 2026/2027 academic session. All Deans/Directors, HODs (Academics) and the Student Union Government are by this memo required to inform the students accordingly. (Please note that this circular is left unedited for some observed typos except for the deliberate omission of names of officers mentioned in the memo).
One other issue of interest to this article is whether the loan is interest-free or not. The management of the Fund has been saying it on top of the roof (for anyone who cares to listen) that the loan is interest-free. However, the Act under Part 111 titled Financial Provisions, section 17 (1) sub-section (c) specifically mentioned repayment of capital and interest on any loan granted by the Fund. (Emphasis added). If the loans given to the successful applicants are interest-free, while then are both capital and interest mentioned. One expected that only capital would have been mentioned in relation to loan recovery. Another serious and follow-up question is that if there is interest attached to the loan, as mentioned in section 17, what is the percentage of such interest charged? Â How can one borrow without knowing the interest rate he/she is going to be charged while paying back the loan? Is this a case of crafty implementation?
Does one require a law degree to interpret this section of the Act? How come the Fund is not seeing this provision of the Act and make the necessary clarification based on concerns raised by such body like the iRead to Live Initiative? I recall that the iRead to Live Initiative (Nigeria’s Independent Higher Education Policy Think-Tank) in its well published Policy Brief (PB-002-2026 September) raised this very important issue. And again during its Webinar titled: Can NELFUND sustain itself?, held on September 25, 2026, it raised the contradiction between what the Act provides on recovery of loan and what the Fund is saying regarding its interest-free nature. Why is the Fund not reacting to this? Its silence fuels the suspicion of crafty implementation?
Prof. Obasi, a public policy expert and analyst is formerly of the Department of Public Administration, University of Abuja. Email: nnamdizik@gmail.com; Cell: 07065692668
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