The Federal Government’s Students’ Loan Scheme, managed by the Nigerian Education Loan Fund (NELFUND), was introduced to make higher education accessible to all Nigerians, particularly those from low-income backgrounds.
However, barely 16 months after its launch, the initiative is facing serious challenges — primarily due to the arbitrary increase in tuition fees by several tertiary institutions.
1. What is NELFUND?
NELFUND was established by the Bola Tinubu administration to provide interest-free loans to indigent students enrolled in tertiary institutions across the country.
The aim is simple: no student should be denied access to higher education because of financial hardship.
Beneficiaries are expected to repay the loan after graduation, once they secure employment.
2. Why is the scheme facing problems?
Many universities and polytechnics have reportedly increased their tuition fees significantly since NELFUND began operations.
Observers say some institutions are taking advantage of the availability of student loans to raise their fees, assuming that government support will cushion the impact on students.
These arbitrary increases are undermining NELFUND’s financial projections and placing additional pressure on students.
3. How high are the fee increases?
A report titled “Framework to Mitigate the Impact of Increased Institutional Charges on the Fund’s Operations” details several examples:
University of Ilesa, Osun State:
Nursing: ₦825,000 → ₦1.276 million (55% increase)
Law: ₦1.276 million → ₦1.526 million (20% increase)
Ekiti State University, Ado-Ekiti:
Medicine and Surgery: ₦797,000 → ₦1.132 million (42% increase)
Edo State University, Iyamho:
Medicine and Surgery: ₦3.25 million → ₦4.25 million (₦1 million increase)
In some cases, fees have reportedly risen by as much as 500% within a single academic session.
4. Why does this affect NELFUND?
NELFUND’s funding plans were based on existing tuition levels.
When institutions suddenly raise their fees, the fund’s budget projections become unrealistic, threatening the sustainability of the scheme.
It also means more students will require larger loan amounts, increasing the financial strain on NELFUND and the federal government.
5. What does this mean for students?
The impact on students has been immediate and severe:
Increased tuition and accommodation costs.
Possible delays in loan disbursement while NELFUND reassesses its allocations.
Risk of temporary suspension of loans to students in schools with excessive fee hikes.
Those studying high-cost programmes such as Medicine, Law, and Nursing are particularly affected.
6. What steps is NELFUND taking?
To manage the situation, NELFUND has proposed several measures:
Suspending loan disbursements to institutions with extreme fee hikes until proper reviews are concluded.
Capping loan amounts for schools with moderate increases.
Halting loans to institutions where tuition has risen by more than 100% pending investigation.
Supporting the Federal Government’s audit of universities benefiting from TETFUND grants to ensure transparency and accountability.
7. What are the recommendations going forward?
The Nation editorial recommends that:
The 51 institutions implicated in illegal deductions and exploitative practices should be appropriately sanctioned.
Sanctions should not affect students, who are not responsible for such violations.
A national fee regulatory framework involving the government, educational institutions, and parents should be established to standardise tuition charges.
The editorial further emphasised that universities should not treat NELFUND as a revenue source, but as a tool to support equitable access to education.
8. The bottom line
The Students’ Loan Scheme was designed to ease the financial burden on Nigerian students, not to justify unreasonable tuition hikes.
If unchecked, these arbitrary increases could erode public trust and jeopardise the long-term viability of the fund.
As The Nation rightly noted, “the money is not a freebie; it is a loan that beneficiaries will repay later.”
Educational institutions must therefore act responsibly, ensuring that the spirit of NELFUND — education for all, regardless of background — is preserved.
EduTimes Africa, a product of Education Times Africa, is a magazine publication that aims to lend its support to close the yawning gap in Africa's educational development.