The Nigeria Education Loan Fund may face significant challenges recovering the ₦355.87 billion it has disbursed to students, with a higher education policy think tank warning that the current repayment system may not be strong enough to track beneficiaries when repayment begins.
The warning was contained in a policy brief by The iRead To Live Initiative, titled “Can NELFUND Sustain Itself? Financing Nigeria’s Student Loan Scheme.”
NELFUND has disbursed about ₦355.87 billion to approximately 850,000 beneficiaries since the launch of its student loan portal in May 2024. However, the initiative said the ability to recover the funds remains largely untested because no beneficiary cohort has yet entered the repayment stage.
The think tank said the Federal Government has roughly 18 months to strengthen the recovery system before beneficiaries who complete the mandatory two-year post-NYSC grace period become subject to repayment enforcement.
It therefore urged the government to integrate NELFUND’s records with Nigeria Revenue Service income data. According to the group, this would make it easier to identify borrowers and recover loans from graduates who are self-employed or work outside formal payroll systems.
The concern centres on the current reliance on employer-based deductions. The initiative argued that such a system could leave a significant number of borrowers outside the recovery net because of Nigeria’s large informal workforce.
The group warned that without urgent reforms, NELFUND could encounter problems similar to those that undermined previous attempts at establishing a sustainable national student loan scheme.
However, it stressed that NELFUND’s performance cannot yet be judged by its recovery record because repayments have not started. The real test, it said, will come when the first beneficiaries enter the repayment window.
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