The Nigerian Education Loan Fund (NELFUND) was created to remove financial barriers preventing Nigerian students from accessing higher education. Under the scheme, approved institutional charges are paid directly to participating institutions on behalf of eligible students, while upkeep support is paid to students.
The scale of the programme is now enormous. As of September 29, NELFUND reported that it had disbursed N372.62 billion, including N192.89 billion in institutional fees paid directly to 319 institutions.
This success, however, creates a new problem that requires urgent attention.
In June, NELFUND publicly condemned reports of arbitrary increases in tuition and other institutional charges, as well as cases where institutions delayed or refused to refund students who had already paid their fees before NELFUND subsequently paid the same fees to the institutions. The fund stressed that the scheme was created to remove financial barriers, not create additional burdens for students.
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Then in August, NELFUND Managing Director Akintunde Sawyerr again warned institutions against unreasonable fee increases. He disclosed that some institutions had increased their fees after the introduction of the student-loan scheme and said NELFUND had, in several cases, refused to pay charges it considered unreasonable.
This warning deserves to be taken seriously.
The Federal Ministry of Education already constituted a committee to standardise administrative and other charges across public tertiary institutions. Its recommendations included standardising fee nomenclature, establishing clearer timelines for loan processing and refunds, and improving coordination between NELFUND and institutions.
But the current situation shows that stronger implementation and monitoring may still be necessary.
Whenever a major increase occurs at a time when institutional fees are increasingly being paid through NELFUND, students and the public have a legitimate right to ask: What exactly justified the increase? How was the new amount determined? And is the same charge being applied transparently to students who are not beneficiaries of NELFUND?
These questions are not an attack on universities. They are questions of accountability.
NELFUND should consider introducing a much stronger regulatory framework around institutional charges covered by the loan.
For example, there should be clear benchmarks and maximum allowable charges, with institutions required to provide detailed justification before introducing substantial increases. Any proposed increase should be subjected to verification before NELFUND agrees to pay it.
There should also be a transparent database showing the approved institutional charges of participating universities, polytechnics and colleges. Students should be able to see exactly what their institution is authorised to charge and what NELFUND will cover.
Most importantly, NELFUND should not allow its growing financial capacity to unintentionally become an incentive for institutions to increase charges.
The purpose of a student loan is to make education more accessible, not to create a situation where students are told, in effect, that they should not worry about rising fees because NELFUND will pay. That approach could become dangerous in the long term.
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If institutional charges continue rising simply because more students are accessing government-backed loans, the immediate burden may appear to have disappeared from students’ pockets. But the underlying cost has not disappeared. It has merely shifted to the NELFUND system, and ultimately to the sustainability of the student-loan programme.
NELFUND has already demonstrated that it can move large amounts of money directly to institutions. The next challenge is ensuring that the money is not only paid efficiently, but also paid for legitimate, reasonable and transparent charges.
The warning issued by NELFUND in June and August is therefore welcome. But warnings alone may not be enough.
NELFUND must introduce stronger guidelines, enforce standardised charges and scrutinise substantial fee increases before public funds are released. Otherwise, a programme designed to protect Nigerian students from the financial burden of higher education could unintentionally become a mechanism through which institutional charges continue to rise.
The ultimate objective must remain clear: NELFUND should finance students’ education, not finance unjustified increases in institutional charges.
