The Director General (DG) of the National Orientation Agency (NOA), Lanre Issa-Onilu, recently raised an alarm over some infractions that seek to undermine the essence of the Nigerian Education Loan Fund (NELFund). He said anti-corruption agencies in the country have been alerted to scrutinise the activities of some tertiary institutions that are colluding with banks to sabotage the student loan scheme. This development followed an earlier alarm raised by the NELFund, accusing some higher educational institutions of withholding information about student loan disbursements from beneficiaries.

The Managing Director of NELFund, Akintunde Sawyerr, said the agency had discovered that some institutions were failing to notify students when loan payments had been made directly to the institutions for their fees; adding that these institutions were still demanding fee payments from the affected students, causing confusion. Sawyerr described the practice as “unethical” and ”direct violation” of NELFund’s principles and warned that legal action would be taken against any institution found to be engaging in such “deceptive practices.” He, therefore, called on all institutions to be transparent and work with the fund to ensure the loan scheme’s success.

In a follow-up to revelations by the NELFund, the NOA through its Deputy Director of Communications and Media, Paul Odeniyi, disclosed that its investigation confirmed the development. He said the action raised “serious concerns over transparency and accountability in the new student loan scheme.” Quoting its DG, Issa-Onilu, NOA said the report was based on findings by Community Orientation and Mobilisation Officers (COMO) across the country.

While speaking on Arise Television, Issa-Onilu further revealed that the affected higher institutions are under the radar of anti-graft agencies. “We also heard of some schools that charge some fees, processing or so-called fees, for the students to access the funds. Something that you played no role in,” he said. A lot of students keep complaining that it is only after they have made payment that they discover that NELFund has paid for their tuition and their institutions would not inform them. Students are intimidated to look for alternative sources when fees are disbursed late. Staff with record of such students conspire with criminally-minded bank staff to divert the loans meant for such students into fraudulent accounts. There have also been inconsistencies reported in the amounts disbursed to students.

Following up on the matter too, the Independent Corrupt Practices and Other Related Offences Commission (ICPC), on May 1, 2025 revealed that only N28.8 billion was disbursed to students in various tertiary institutions instead of the N100 billion released to the institutions. The anti-graft agency specifically said its preliminary investigations have uncovered that not less than N71.2bn have been diverted by the management of different universities who had taken custody of funds.

The spokesman of the commission, Demola Bakare, told journalists in Abuja that key stakeholders, including the Director General of the Budget Office and the Accountant General of the Federation have been invited. Bakare disclosed that senior officials from the Central Bank of Nigeria as well as the Chief Executive Officer and Executive Director of NELFund were also invited to provide documentation and explanations relevant to the case.

In a swift yet amazing reaction to revelations by the ICPC, NELFund disclaimed allegations of mismanagement in the administration of the student loan scheme. An advertorial signed by the Director of Strategic Communications of NELFund, Mrs Oseyemi Oluwatuyi, said, “No funds have been mismanaged, stolen, or are unaccounted for under the current NELFund student loan scheme.”

It would be recalled that President Bola Ahmed Tinubu enacted an initial version of the student loan policy in June 2023 to grant interest-free loans to students. The scheme was to commence in October 2023, but implementation was repeatedly deferred until a re-enactment in April 2024. NELFund is a pivotal financial institution established under the Student Loans (Access to Higher Education) (Repeal and Re-enactment) Act, 2024. It was signed into law by President Bola Tinubu on 3 April 2024, marking a historic step towards ensuring sustainable higher education and functional skill development for Nigerian students and young people. NELFund opened the loan application portal in May 2024 when a pilot phase to serve federal tertiary institutions began.

It’s unfortunate that the agency, which is barely a year old since its establishment by an Act is already enmeshed in corruption allegations. This is happening even as technological tools that could forestall corrupt practices in the scheme are available for deployment. Allowing a window through which an institution could collude with the banks to defraud beneficiaries of the loan scheme suggests a deliberate attempt to encourage corruption. NELFund should have provided mechanisms that would avert fraudulent practices among all the parties involved in the administration of the scheme including NELFund staff, institutions, and commercial banks.

With the recent surge in the claims and counter claims over the disbursement of funds to students by NELFund, Daily Trust calls on the federal government to institute an urgent probe into the student loan scheme since the inception. Incidences of conspiracy between institutions and banks to defraud benefiting students should be thoroughly investigated. The report of the probe should be made public and officials indicted should be promptly prosecuted. NELFund should not be turned into another sinkhole. (Daily Trust Editorial)