NELFUND student loans: what borrowers get and how repayment works

The government's student loan scheme, NELFUND, became one of the most talked-about topics on Nigerian social media this week, after a student's post saying many beneficiaries may back the President in 2027 set off a wider argument about school fees and debt. Here is what the scheme pays, what borrowers owe and what each side says.

The Nigerian Education Loan Fund had disbursed ₦372.62 billion as of 29 September, according to its own disbursement report, BusinessDay reported on Tuesday. Of that, ₦192.89 billion was paid directly to 319 institutions for fees and ₦179.73 billion went to students as upkeep allowances. The fund says it has processed 1,659,853 applications since its portal opened in May 2024, but processed applications are not the same as students who have been funded.

The loans are interest-free. Under the Student Loans Act 2024 and NELFUND's guidelines, repayment starts two years after a borrower finishes NYSC. Employers deduct 10 per cent of the borrower's salary and pass it to the fund; self-employed borrowers pay 10 per cent of their monthly profit. Borrowers without work or income can apply to delay repayment.

Applying is voluntary. NELFUND said so in a statement on 21 October, after a memo from a state-owned college in Enugu directed all students to apply, Nairametrics reported. Only students who need the support are expected to take it.

On Monday, University of Benin Vice-Chancellor Edoba Omoregie called the scheme “manna from heaven” and said its terms are friendlier than student loans in the US and UK, Vanguard and Punch reported. He also said too few eligible students were applying. Earlier this month, a presidential aide, Abiodun Essiet, said about 850,000 students had benefited, The Guardian reported.

Critics argue the loans are needed because fees at many federal universities have risen sharply, and that graduates will start work owing money. Atiku Abubakar's campaign said in September that he would review the scheme and forgive some student debts if elected. Supporters reply that the loans have kept students in school who would otherwise have dropped out.

Pidgin: NELFUND don pay pass ₦372 billion for school fees and upkeep. Di loan no get interest, and nobody go ask you to pay until two years after NYSC. When you start work, dem go remove 10 per cent from your salary. Di loan no be by force; na only who need am suppose apply.

How this affects you: If you or your child is in a public tertiary institution, the loan can cover fees and upkeep, but it is a debt, not a grant. Read the repayment terms on NELFUND's official portal before applying, apply only through the portal or your school's desk officer, and be wary of anyone asking for money to process an application.