The Nigerian Education Loan Fund (NELFUND) has introduced a pilot tokenised payment system to prevent students from paying their school fees twice and reduce complications associated with refunds.

The Managing Director and Chief Executive of NELFUND, Akintunde Sawyerr, disclosed this on Wednesday during a press briefing, revealing that the fund had received nearly 400,000 applications under the ongoing student loan programme.

Sawyerr explained that the new system would allow students to authorise payments directly to their institutions through tokens linked to their respective schools, rather than receiving approved tuition funds in their personal bank accounts.

According to him, the initiative is designed to address situations where students pay their fees independently without knowing that NELFUND has already settled the bills on their behalf.

He said delays in communicating completed payments to beneficiaries had sometimes resulted in duplicate payments, forcing institutions to process refunds.

Sawyerr illustrated the problem with a scenario in which NELFUND pays a student’s fees on Monday, but the student, unaware of the transaction, makes another payment by Wednesday before learning about the earlier disbursement on Friday.

Under the proposed arrangement, students will receive notifications when their approved tuition fees are ready for payment and can authorise the transactions through an application on their mobile phones.

The fund’s Executive Director, Mustapha Iyal, explained that the token would be tied to a specific institution and would not function as a personal or mobile money wallet.

He added that the system would restrict payments to the institution for which the loan had been approved.

The tokenised payment initiative forms part of efforts to improve the administration of the Federal Government’s student loan scheme, established under the Students Loans (Access to Higher Education) Act, 2024.

NELFUND 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’ schools, while upkeep allowances are transferred to beneficiaries’ bank accounts.