NELFUND Disburses ₦93 Billion in Interest-Free Student Loans as Beneficiaries Raise Repayment Concerns

The Nigerian Education Loan Fund (NELFUND) has announced the disbursement of ₦92.87 billion in interest-free student loans to thousands of undergraduates across the country. While the scheme is being hailed as a landmark intervention for affordable higher education, many beneficiaries are voicing concerns about job prospects, repayment conditions, and technical issues with the disbursement process.

Massive Uptake Since Launch

According to the latest status report from NELFUND’s headquarters, 809,983 students have registered on the loan portal since its launch on May 24, 2024, with 795,332 applicants successfully completing their applications—a 102% success rate. Out of this number, 482,342 students have already received disbursements, covering tuition fees and monthly upkeep allowances.

The fund was established following President Bola Ahmed Tinubu’s approval of the Students Loan (Access to Higher Education) Act, 2024, with the goal of removing financial barriers to education and improving Nigeria’s Human Development Index.

Repayment Framework and Job Matching

NELFUND Managing Director Akintunde Sawyerr explained that graduates will enjoy a two-year grace period after completing the National Youth Service Corps (NYSC) before repayment begins. Once employed, 10% of their monthly salary will be automatically deducted by employers and remitted to NELFUND.

For self-employed graduates, a similar 10% contribution will be paid directly through the NELFUND portal. To reduce default risk, the fund is developing a job-matching platform to connect unemployed graduates with job openings to enable them to start repayment. Employers are also required to check NELFUND’s database to confirm whether new hires have outstanding loan obligations.

Students Welcome Relief but Fear Repayment Burden

Despite appreciating the financial lifeline, many students expressed anxiety about job scarcity and the practicality of repayment.

• Rabi’u Muhammad, a beneficiary at Bayero University, Kano, said the loan allowed him to continue his studies after tuition hikes.
• Shareef Noma of Gombe State University questioned whether graduates earning minimum wage could comfortably pay back 10% of their salaries.
• Abba Suleiman, a student at the University of Abuja, voiced concerns about government access to personal banking details, fearing deductions even without employment.
• Mubarak Abubakar from the Federal University of Education, Zaria, worried about repayment for self-employed graduates whose earnings barely cover basic needs.

Others, like Adetunkobo Naomi of Ladoke Akintola University, reported smooth disbursement and expressed confidence in repaying once employed.

Calls for Flexible Policies

Students across federal and state universities urged the government to introduce job guarantees, repayment waivers, or more flexible terms for graduates who remain unemployed after the grace period. Some suggested government-backed internships, private-sector incentives, and startup support to create employment opportunities.

Economic and Policy Implications

The interest-free loan program is a bold attempt to expand access to education, reduce dropout rates, and build a skilled workforce. However, with Nigeria’s youth unemployment rate still high, analysts say the success of the scheme depends on sustained job creation, regulatory enforcement, and transparent repayment systems.

The federal government has pledged to strengthen its employment policies by expanding agricultural initiatives, tech innovation hubs, and small-business funding, ensuring graduates can repay without hardship.