Due to expensive tuition fees and unstable economic conditions, Education in Nigeria has frequently been seen as a privilege, which has caused some to doubt its worth. But thanks to the establishment of the Nigerian Education Loan Fund (NELFUND), financial obstacles are being removed, increasing access to higher education. More than 326,000 students had applied as of December 2024, and 128 postsecondary institutions had received ₦34 billion in funding. ₦58.4 billion is set up for the program in the 2025 budget, demonstrating the government’s dedication to youth empowerment.
Successful Student Loan programs in the US, UK, and Australia—where repayments are based on graduates’ incomes—are the model for this program. But with youth Unemployment at 53.4%, there are questions about whether repayment is feasible. An income-based repayment plan was implemented by NELFUND to solve this issue and guarantee affordability. Economic Growth is largely dependent on education, and research, notably that conducted by the World Bank, indicates that nations that invest in student loans see increases in employment and GDP. But structural issues including outdated curricula, frequent strikes, and inadequate facilities in Nigeria’s Tertiary Education system could restrict the program’s efficacy.
Admin bottlenecks & loan repayment enforcement have drawn criticism.
Experts contend that in addition to financial aid, educational quality needs to be raised, with improved Vocational Training and curricula that meet the demands of the labour market. Administrative bottlenecks and loan repayment enforcement have drawn criticism, but NELFUND wants to guarantee Sustainability through technology-driven transparency and income-linked deductions. Like the National Health Service (NHS) model in the UK, the program’s long-term success depends on widespread public participation. Nigeria needs to put strong repayment and job-creation systems in place to prevent the failures observed in other African nations, such as Kenya’s Higher Education Loans Board (HELB), which is having trouble recovering from loans.
Complementary initiatives including the $620 million Digital and Creative Enterprises (IDiCE) program, the 3 million Technical Talents Scheme, and the Skill-UP Artisans Program (SUPA) are also being implemented by the Tinubu administration to improve the employability of young people. Furthermore, the Consumer Credit Corporation seeks to give young Nigerians financial Security with ₦200 billion in funding. These efforts are at jeopardy, though, due to issues with corruption, inefficiency, and bureaucracy. Significant difficulties are revealed by Nigeria’s past student loan programs. The Nigerian Students Loans Board (NSLB) was founded in 1972 to offer students financial aid.
Campaigns to raise public knowledge of the loan requirements are planned.
About ₦46 million in loans had been disbursed by 1991, but only ₦6 million (13%) had been recouped. Due to massive delinquency and a popular belief that the loans were “national cake,” administrative inefficiencies were blamed on the low recovery rate. The current Nigerian Education Loan Fund (NELFUND) seeks to solve these problems by putting in place strong recovery procedures, including as income-contingent repayment arrangements and taking advantage of Technology to track and collect loans more effectively. Campaigns to raise public knowledge of the loan requirements are also planned in order to encourage a Culture of accountability among recipients.
Students, teachers, and economists have all had differing opinions about the launch of NELFUND. An Obafemi Awolowo University student expressed worries regarding the loan’s accessibility, pointing out that many impoverished students find the requirement for two guarantors—such as a lawyer with 10 years of experience or a public servant with at least level 12—to be a major obstacle. In order to guarantee that the loans reach the intended recipients, this sentiment emphasises the necessity of more extensive eligibility requirements.
Related Article: 10,300 students unable to obtain NELFUND loan
Additionally, NELFUND has implemented a number of initiatives to improve loan recovery beyond tying repayments to income in order to learn from previous mistakes. The program intends to interface with national identity systems in order to efficiently follow graduates, even those who move or change jobs. Additionally, there are plans to work with financial institutions to keep an eye on financial activity, making sure that loan defaulters are found and that the right actions are done. In order to lower default rates and foster an accountable culture, public awareness initiatives will also be carried out to inform beneficiaries of their payback responsibilities.