FG Accuses Banks, Universities of Sabotaging Student Loan Scheme
The Federal Government has accused some universities and financial institutions of deliberately sabotaging the National Student Loan Fund (NELFund) scheme by withholding disbursement information and manipulating access to approved funds.
The allegations were made public on Sunday by the National Orientation Agency (NOA) following a strategic meeting between its Director General, Lanre Issa-Onilu, and the Managing Director of NELFund, Akintunde Sawyerr.
According to the NOA, preliminary investigations have uncovered evidence suggesting that certain tertiary institutions are colluding with partner banks to exploit the system for financial gain—undermining the scheme’s goal of ensuring equitable access to education funding.
“We’ve identified troubling cases where institutions received approved disbursements but failed to inform students or reflect the payments in their financial records,” Sawyerr said. “Such actions are unethical and contrary to the founding principles of NELFund. We will not hesitate to pursue legal action against offenders.”
The NOA revealed that some institutions are deliberately delaying disbursements, refusing to acknowledge receipt of loan funds, and keeping students in the dark—all while approved payments sit idle in school accounts.
Issa-Onilu emphasized that the agency has now directed its state offices nationwide to monitor the situation closely and gather feedback directly from students. He warned of possible federal sanctions against any school or financial institution found guilty of obstructing the loan process.
“The abuse of this initiative will not be tolerated. We’re expanding our monitoring efforts and working with NELFund to ensure transparency and accountability at every stage of the disbursement process,” Issa-Onilu stated.
The student loan program, signed into law by President Bola Tinubu in June 2023, was designed to offer interest-free loans to Nigerian students pursuing higher education. After initial delays, it was re-enacted in April 2024, with the pilot phase launched in May 2024 across federal institutions.
However, the rollout has faced widespread criticism over disbursement delays, inconsistent fee structures, and communication lapses—particularly during critical academic periods such as exams and new sessions.
The government says it remains committed to the integrity of the scheme and warned that any attempt to defraud students will face serious legal and regulatory consequences.
