The Nigerian Education Loan Fund (NELFUND) is introducing a new loan disbursement system that will give students more control over the payment of their approved institutional fees.
The new arrangement, known as the School-Locked Token System, is designed to address challenges associated with the previous payment process, particularly cases where students unknowingly paid their school fees twice.
How the Previous System Worked
Under the old arrangement, once NELFUND approved a student’s loan application, the approved institutional fees were sent directly to the student’s institution.
However, some institutions reportedly failed to notify students promptly after receiving the payments.
As a result, students who were unaware that NELFUND had already paid their fees sometimes proceeded to pay from their personal accounts.
This resulted in double payments, leaving affected students to go through the stress of requesting refunds from their institutions.
NELFUND’s Managing Director, Akintunde Sawyerr, had described the occurrence as a genuine error rather than fraud.
How the New School-Locked Token System Works
Under the new system, NELFUND will make approved institutional fees available through a special token linked to the student’s institution.
Instead of automatically transferring the money to the school, students will be required to authorise the payment through their NELFUND application.
For example, if a student receives approval for ₦200,000 in institutional fees:
- NELFUND approves the student’s loan application.
- A school-locked token is made available through the NELFUND application.
- The student receives a notification to approve the payment.
- The student authorises the transaction.
- The approved amount is transferred directly to the institution.
This means students will have an opportunity to confirm and authorise their school fee payments before the funds are disbursed.
Is the Token Money You Can Withdraw?
No. The school-locked token is not a personal wallet or mobile money account.
It is simply an authorisation mechanism for institutional fee payments.
Students cannot withdraw the approved school fees into their personal bank accounts, transfer the funds to another person or redirect the payment to another institution.
If a student does not authorise the transaction, the funds remain with NELFUND.
What Happens to the ₦20,000 Upkeep Allowance?
The new arrangement does not change the payment process for students’ upkeep allowances.
The upkeep allowance of ₦20,000 will continue to be paid directly into the student’s personal bank account, while the school-locked token applies to approved institutional charges.
Is the New System Available to All Students?
The new system is currently at the pilot stage, with almost 400,000 applications reportedly involved in the current batch.
A wider rollout across participating institutions is expected after the pilot phase.
Students are therefore advised to follow official NELFUND announcements for updates on when the new arrangement will become available to their respective institutions.
What Students Should Know
The introduction of the School-Locked Token System is aimed at improving transparency, reducing payment errors and ensuring that students are aware of when their approved school fees are being disbursed.
For students, this means paying closer attention to notifications on their NELFUND applications and confirming their payment status before making additional school fee payments.
Studentsdash advises students to always verify their payment status with their institution before making another school fee payment to avoid unnecessary double payments.
Stay connected with Studentsdash for more updates on NELFUND, student loans and other important educational developments.
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