The Federal Government’s student loan scheme is one of the most important social programmes introduced in recent years. It gives thousands of young Nigerians a chance to remain in school when rising fees and living costs might otherwise force them out.
But the success of the Nigerian Education Loan Fund (NELFUND) will not be measured only by how much money it disburses. It will also be measured by how much it eventually recovers and whether the scheme can continue helping future generations.
That is why the latest warning over N355.9 billion in student loans deserves serious attention.
NELFUND has disbursed N355.87 billion since its student loan portal opened in May 2024. The money has gone towards institutional fees and students’ upkeep, with more than 1.65 million applications processed by early September.
A policy brief by the iRead To Live Initiative has now warned that the government could struggle to recover the money if it does not strengthen its repayment system. It recommends linking NELFUND with Nigeria Revenue Service income data so that graduates who are self-employed or outside the formal payroll system can also be identified when they begin earning.
This is a sensible warning. Nigeria has a large informal economy. Many graduates will not work for companies that can simply deduct repayments from their salaries. Some will run small businesses, work for themselves or earn money from several sources. A system that depends mainly on formal employers will therefore leave too many borrowers outside its reach.
NELFUND’s own terms already provide for repayment through deductions from salaries and require self-employed beneficiaries to provide information about their businesses. The government should now build the technology and institutional links needed to make those provisions work in practice.
The timing is important. NELFUND says it has not yet begun recovering the loans, while its monthly upkeep bill is about N16 billion. The government therefore has an opportunity to fix weaknesses before repayment becomes a major problem.
But recovery must not become harassment.
A graduate who cannot find a job should not be treated like a criminal. The purpose of the scheme is to help young Nigerians build better lives, not push struggling graduates deeper into hardship. Repayment should begin when beneficiaries have income, and the system must remain fair to those who are unemployed or earning very little.
The government must also make the scheme transparent. Nigerians need regular information on how much has been disbursed, how much has been recovered once repayments begin, the number of beneficiaries and the cost of administering the programme.
The student loan scheme should not become another government programme that starts with good intentions, expands rapidly and eventually collapses because nobody planned properly for repayment.
The government has already put substantial public resources behind NELFUND. It must now invest equally in a strong recovery system.
Education loans can change lives. Government must ensure that they also build a sustainable system that will serve generations of Nigerian students.
Dear Vows
