The NELFUND token system is being piloted to prevent double school fee payments, reduce refund delays and give Nigerian students greater control over when their approved tuition fees are paid. The Nigerian Education Loan Fund says the new arrangement will allow beneficiaries to authorise payments directly to their institutions without transferring the money through their personal bank accounts.
NELFUND Managing Director Akintunde Sawyerr announced the development on Wednesday, October 28, 2026, during a press briefing. The initiative addresses a problem encountered by some beneficiaries who paid their fees without knowing that the fund had already transferred the money to their schools.
Although the pilot has commenced, officials have yet to announce a date for the system’s full implementation.
Why NELFUND Is Introducing the Token System
The new payment arrangement follows cases in which students made duplicate payments because they did not receive timely information about the status of their NELFUND disbursements.
According to Sawyerr, some beneficiaries paid their institutions independently while waiting for confirmation of their loan payments, only to discover later that NELFUND had already settled their fees.
Explaining the problem, he said: “We discovered that there were some issues with students being informed in good time that their payments had been made by NELFUND, which meant that some of them would pay because they hadn’t realised that NELFUND had paid already.”
The situation can leave students with two payments recorded against the same fee obligation. While the institution may eventually need to refund one payment, the process can create additional administrative work and leave students waiting to recover money they need for other expenses.
Sawyerr illustrated the problem with an example in which NELFUND pays an institution on Monday, but a student who has not been informed makes another payment on Wednesday. By Friday, the student discovers that the original fee had already been settled.
Describing such cases, the NELFUND chief said: “It was a genuine error, no suspicion, no accusation, just genuine error.”
The token system is intended to reduce these incidents by changing how approved institutional payments are authorised.
How the New NELFUND Payment System Works
Under the proposed arrangement, beneficiaries will be notified when their approved tuition funds are ready for payment. They will then use an application on their mobile phones to authorise the transaction through a token linked to their respective institutions.
Instead of giving students unrestricted access to the approved tuition funds, the arrangement will allow them to initiate payments directly to the schools designated for their loans.
This means a student will have a role in authorising the transaction, while the payment remains restricted to its intended destination.
Sawyerr explained the reasoning behind the change, saying: “We want to eliminate that need for refunds. So we’re placing the power of payment in the hands of the students.”
He further clarified that the arrangement would give students control over payment initiation without allowing them to withdraw or redirect the funds.
“We’re not giving the students money, but we’re giving them power,” he said.
The distinction is important because the system is not designed to function like a conventional bank account or digital wallet. Instead, the token serves as a payment authorisation mechanism tied to a particular institution.
Can Students Transfer NELFUND Funds to Their Bank Accounts?
Under the proposed token arrangement, beneficiaries will not be able to transfer approved institutional fee payments to their personal bank accounts or redirect the funds to another school.
Sawyerr addressed the restriction directly, explaining: “The system, the token, not only can they not transfer it to their personal account, they can’t transfer it to any other school.”
For example, a student with an approved tuition payment of ₦200,000 would be able to authorise payment only to the institution designated for that transaction.
The funds would not move until the student initiates the payment, according to Sawyerr.
“If they don’t push the button, the money doesn’t go anywhere. It will never be able to be transferred to the personal account of the student or anybody else,” he said.
NELFUND Executive Director of Operations Mustapha Iyal also clarified the nature of the arrangement.
“It’s not a personal wallet, it’s not a mobile money wallet at all,” Iyal said.
The restriction is intended to ensure that approved tuition funds are used for their designated purpose rather than diverted elsewhere.
Will the Token System Affect NELFUND Upkeep Allowances?
The new arrangement focuses on payments for institutional charges, including approved tuition fees. It should not be confused with the existing process for paying students‘ upkeep allowances.
Under NELFUND’s published student loan information, approved institutional charges are paid to students‘ institutions, while approved upkeep allowances are paid into beneficiaries’ bank accounts.
The tokenised payment arrangement is intended to address problems associated with institutional fee payments. The announcement did not indicate that the existing upkeep payment process would be replaced by the new system.
Students should therefore distinguish between money approved for school fees and any upkeep allowance included in their loan approval.
NELFUND Pilot Begins as Applications Near 400,000
Iyal confirmed that the pilot phase had commenced and disclosed that the fund had received close to 400,000 applications at the time of the briefing.
“As I speak to you, we already have close to 400,000 applications,” he said.
However, the figure represents applications received, not the number of students who have already used the new payment system. Officials did not disclose how many beneficiaries were participating in the pilot or identify a specific date for a nationwide rollout.
The effectiveness of the arrangement will depend on how efficiently NELFUND, students and their institutions coordinate payment authorisation and confirmation.
For students facing registration deadlines, timely notifications will remain important. Even with a system that allows beneficiaries to authorise payments, clear communication about approved funds and completed transactions will be necessary to prevent avoidable confusion.
NELFUND’s next steps will therefore be important for beneficiaries waiting to understand how the new arrangement will operate in practice.
For now, the key development is that the fund has started testing a token-based approach intended to reduce duplicate school fee payments, limit the diversion of institutional funds and make the payment process more manageable for students.
