By Majekodunmi Precious Favour, Odedele Ezekiel Olumide, Oboh Patience Oluwaferanmi, Mike-Nliam Daisy Mmesoma
Student loans have long served as a gateway to education and opportunity, particularly in countries where the cost of university education places a heavy burden on families.
The concept dates back to 1840 in the United States, when Harvard University issued what is considered the first recorded student loan. Over the decades, the system evolved.
A major shift occurred in 1958, when the U.S. government, under the National Defense Education Act, introduced a federal loan program to encourage students to pursue science fields during the Cold War.
As global student loan systems matured, many developing nations lagged behind in providing structured financial aid to students. Nigeria, for many years, remained one such country. Despite the growing demand for higher education, there were few formal mechanisms to support students who couldn’t afford tuition, until recently.
The Nigerian Education Loan Fund (NELFUND) marks a turning point in Nigeria’s approach to tertiary education financing. Established under the revised Student Loan Act of 2024, NELFUND is a government-backed initiative designed to dismantle financial barriers that have historically hindered access to tertiary education.
Its core innovation lies in its interest-free structure, targeted at eligible students enrolled in public universities, polytechnics, colleges of education, and recognized vocational institutions.
NELFUND’s development involved several years of planning, policy drafting, and stakeholder consultations. The bill was signed into law by President Bola Tinubu in June 2023 and further refined into its current structure by early 2024, with operational plans rolling out by April 2024. It is administered in collaboration with the Central Bank of Nigeria, Federal Ministry of Education, and other financial partners to ensure transparency and accountability.
Unlike traditional student loan programs, NELFUND emphasizes sustainability, accountability, and flexibility. Loans are not disbursed directly to students; instead, funds are sent to educational institutions after verification to cover tuition and essential academic expenses, including upkeep.
On May 1, 2024, Dr. Akintunde Sawyerr, Managing Director of NELFUND, noted that the agency was designed “with sustainability at its heart,” and emphasized that the repayment mechanism would only activate two years after NYSC, strictly based on income thresholds.
In a recent statement, Prof. Tahir Mamman, Minister of Education, said, “The NELFUND initiative is not just a fund; it’s a statement that Nigeria believes in its youth. This is about inclusivity, about ensuring that the child of a roadside trader has the same academic opportunity as the child of a civil servant.”
The formulation of NELFUND involved broad consultation, according to eyewitness accounts. Uche Eke, a student union leader from the University of Abuja, stated “’NELFUND didn’t come out of nowhere. Representatives from NANS were consulted in late 2023, and our voices helped shape the fairer terms we see today.”’
Many students who have benefited from the program describe it as a much-needed intervention. During an interview, Zainab Lawal, a 200-level student at Unilorin, said, “NELFUND has really eased the burden of financial constraints, running helter-skelter to get funds for school fees payment.”
Similarly, Omolara Adebayo, a 300-level student, shared her experience, “I was skeptical at first because it sounded strange to me… but the orientation from the Federal Government through social media and the benefits attached to it, alongside my dad’s encouragement, prompted me to apply.”
With NELFUND’s rollout, Nigeria has entered a new chapter in its education financing history, one that prioritizes access, dignity, and equity for its student population. Through these collaborative efforts and carefully structured mechanisms, NELFUND was developed not only to provide immediate financial relief but also to establish a sustainable and accountable student loan program for Nigeria’s future.
