The Nigerian Education Loan Fund (NELFUND) has dismissed a viral publication claiming that students who fail to repay their education loans after graduation could face life imprisonment.
NELFUND described the publication as fake news in a post shared on its official X account on Sunday.
Viral Publication Is Fake
The circulating publication, dated May 27, 2027, claimed that President Bola Tinubu had declared that students who fail to repay their education loans after graduation would be sentenced to life imprisonment.
NELFUND shared an image of the purported newspaper front page and marked it with a prominent “FAKE” stamp.
The Fund clarified that it had not introduced or announced any criminal penalty of life imprisonment for beneficiaries who fail to repay their student loans.
When Does Loan Repayment Begin?
Under the existing student loan framework, beneficiaries are not required to begin repayment immediately after graduation.
Repayment is expected to begin two years after completing NYSC, provided the beneficiary has secured employment.
For employed beneficiaries, 10% of their salary is deducted by their employers and remitted to NELFUND.
Self-employed beneficiaries are expected to make their repayments directly.
Graduates who remain unemployed are not expected to begin repayment until they secure employment or begin earning an income, subject to the applicable NELFUND repayment process.
About the NELFUND Student Loan Scheme
NELFUND was established under the revised Student Loan Act, which was signed into law in April 2024. The Act provides a framework for government-backed loans for students in higher education and vocational training institutions.
The student loan application portal opened in May 2024, initially covering federal tertiary institutions before later expanding to state-owned institutions.
According to NELFUND’s September 3, 2026 Student Loan Disbursement Status Report, the Fund had processed 1,659,853 applications.
Total disbursements had reached ₦355.87 billion, comprising ₦192.89 billion paid to 319 beneficiary institutions as institutional fees and ₦162.98 billion disbursed directly to students as upkeep allowances.
Bottom Line
Students who have received NELFUND loans should not be alarmed by the viral publication claiming that failure to repay their loans could result in life imprisonment.
NELFUND has confirmed that the publication is fake and that no such life-imprisonment penalty has been announced for student-loan beneficiaries.
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