By joshua NELFUND Loan Fraud: How Students Are Being Shortchanged – and Left with Debts They Never Owed
By Alao Adamadamosi Sunday, arpa
When President Bola Tinubu signed the Student Loans (Access to Higher Education) Act into law, it was hailed as a game-changer for millions of Nigerian youths struggling to afford tertiary education. The Nigerian Education Loan Fund (NELFUND) was designed to provide interest-free loans covering tuition, institutional fees, and monthly upkeep allowances of N20,000. With over half a million applicants and billions of naira disbursed, the scheme promised to democratise access to higher education.
But beneath the promise lies a troubling reality. Recent investigations by the National Orientation Agency (NOA), the Independent Corrupt Practices and Other Related Offences Commission (ICPC), and the House of Representatives have uncovered widespread fraudulent practices in the disbursement of NELFUND loans. No fewer than 51 tertiary institutions have been implicated in illegal deductions and exploitation of the scheme, with some institutions making between N3,500 and N30,000 off each student’s institutional fees.
This article exposes the various methods through which fraud is perpetrated in the disbursement of NELFUND loans and calls for urgent reforms to protect Nigerian students.
1. Inflation of Tuition Fees on the NELFUND Portal
One of the most pervasive fraudulent practices involves institutions uploading inflated tuition fees on the NELFUND portal. Students are shown fee amounts that are significantly higher than the actual approved institutional fees
· University of Jos (UNIJOS): Instead of the approved N130,000 institutional fee, NELFUND disbursed between N145,000 and N150,000 per student—an excess of N10,000 to N20,000 per student.
· Federal University, Lafia: Students were shown N148,500 on the NELFUND dashboard instead of the approved N120,000—an extra N28,500 per student.
· Abubakar Tafawa Balewa University (ATBU): The school charges N135,000 instead of N110,000—an excess of N25,000 per student.
· Obafemi Awolowo University, Ile-Ife: Charges N125,000 instead of N105,000—N20,000 more per student.
· Niger Delta University: Charges N30,000 extra on the approved N145,000 institutional fee, bringing the total to N175,000.
At DS Adegbenro ICT Polytechnic in Ogun State, reports indicate that N355,000 was disbursed per student, whereas the actual school fees payable stand at approximately N236,000—leaving a shocking balance of N119,000 belonging to each affected student.
Here is the most dangerous part of this fraud that no one is talking about loudly enough: NELFUND is a zero-interest loan, but zero interest does not mean zero liability. Every extra naira fraudulently added to a student’s institutional fee becomes part of the principal that the beneficiary must repay after graduation.
When a university inflates fees by N30,000, that N30,000 is added to the student’s repayment schedule. The student will leave school owing money for phantom charges they never benefited from, while the institution makes a windfall. In essence, institutions are not just stealing from the government—they are saddling young Nigerians with avoidable, lifelong debt that will follow them into the labour market, affect their creditworthiness, and reduce their disposable income for years. The student signs a legally binding loan agreement based on false figures, only to discover later that they are repaying a debt incurred by institutional greed.
2. Failure to Notify Students of Loan Disbursements
In a scheme that amounts to institutional fraud, some universities receive loan disbursements directly from NELFUND but deliberately fail to notify student beneficiaries or update their financial records. This leaves students unaware that their tuition has been paid, allowing institutions to demand and collect fees directly from students—resulting in duplicate payments. Worse, students are unknowingly building a repayment liability for fees they have already paid out of pocket.
The NOA’s findings point to a disturbing pattern wherein institutions receive funds but keep students in the dark, while some universities reportedly ignore students’ requests for refunds of overpayments outright.
3. Refusal to Refund Fees Already Paid by Students
Many students who paid their tuition fees independently before NELFUND disbursements arrived have found it nearly impossible to get refunds from their institutions. Some institutions collected institutional fees from the government without refunding the full value to students at the point of disbursement. Meanwhile, the loan balance on the student’s NELFUND profile remains unchanged, meaning they will repay a loan for fees they funded themselves.
In May 2025, the House of Representatives mandated all tertiary institutions to refund students who had paid their tuition fees before their loan disbursements. Yet, many institutions continue to ignore this directive.
4. Ghost Students and Loans to Graduated Students
Perhaps the most audacious fraud involves institutions processing loans for students who have already graduated or who do not exist at all. Weak verification systems have allowed some institutions to upload inflated tuition fees and receive payments for students who are no longer enrolled or never were. These non-existent beneficiaries, of course, will never repay—but the scheme’s sustainability is eroded, and genuine students suffer.
5. Collusion with Banks to Delay Payments
Investigations have revealed that some institutions, in collusion with certain financial institutions, deliberately delay payments to students for dubious financial gain. By holding onto funds meant for students, these institutions and banks earn interest or leverage the funds for other purposes while students are left stranded—yet their repayment clock continues ticking.
6. Fake Portals and Phishing Scams Targeting Students
Beyond institutional fraud, cybercriminals have also targeted NELFUND beneficiaries through fake loan portals and phishing scams. Fraudsters have created bogus websites and circulated messages falsely claiming that President Tinubu had ordered the reopening of the NELFUND portal. Students are lured to these fake portals where they submit personal and financial information, which is then used for identity theft and financial fraud. In some cases, criminals take out loans in students’ names, leaving the innocent victims to repay the debt.
NELFUND has repeatedly warned the public that the only official portal is https://nelf.gov.ng.
The magnitude of the fraud is staggering. According to ICPC findings, as of March 19, 2024, NELFUND had received a total of N203.8 billion. However, open-source information revealed that while the federal government reportedly released N100 billion for the scheme, only N28.8 billion was disbursed to students, leaving an unaccounted sum of N71.2 billion.
The total amount disbursed to institutions from inception stands at approximately N44.2 billion, with 299 institutions and 293,178 students having benefited from the fund. Yet, the discrepancy between what was released and what reached students raises serious questions about accountability and transparency. Every unaccounted naira represents a future repayment obligation unfairly shifted onto innocent graduates.
Behind these numbers are real students whose dreams are being crushed. Students who rely on the N20,000 monthly upkeep allowance to survive have gone for months without payments. The National Association of Nigerian Students (NANS) has threatened mass action, including the occupation of NELFUND’s headquarters, over what it described as “unacceptable” delays in the disbursement of upkeep allowances.
The National Association of Ogun State Students (NAOSS) has demanded that the EFCC launch a thorough investigation into what it called “a calculated attempt to deprive students of funds rightfully belonging to them”.
Graduates are beginning to receive repayment reminders for amounts far exceeding what they actually spent on tuition, and they have no clear channel to challenge these discrepancies. A student who borrowed N500,000 based on an inflated fee may find themselves legally obligated to repay N550,000 or more over the repayment period—a lifetime burden for a crime they did not commit.
The Federal Ministry of Education has described the allegations as “very disturbing and extremely concerning”. Minister of Education, Dr. Maruf Olatunji Alausa, has vowed that “any attempt to exploit this fund is unacceptable and contradicts the President’s vision for inclusive human capital development”.
In response, the Ministry has convened emergency meetings with Vice Chancellors of affected universities, launched a compliance-tracking initiative, and introduced an Annual University Transparency Index to promote accountability.
The ICPC has commenced a comprehensive investigation and dispatched letters to key stakeholders, including the Director General of the Budget Office, the Accountant General of the Federation, and senior officials from the Central Bank of Nigeria. NELFUND has also warned that it will sanction any institution found culpable and suspend disbursements while allegations are investigated.
To restore trust in the NELFUND scheme and protect students from being unfairly indebted, the following measures are urgently needed:
First, NELFUND must implement robust verification systems to prevent the uploading of inflated tuition fees and the processing of loans for ghost or graduated students. Technology-enabled guardrails are essential to eliminate fraud.
Second, institutions must be mandated to notify students immediately upon receipt of loan disbursements and to update financial records promptly. Transparency in disbursement records is non-negotiable.
Third, the ICPC and EFCC must expedite their investigations and ensure that culpable individuals and institutions face the full weight of the law—not just for corruption, but for knowingly burdening students with fraudulent debts.
Fourth, a comprehensive audit of all NELFUND disbursements should be conducted to account for every kobo released under the scheme. The loan balances of all beneficiaries must be reconciled against actual, verifiable institutional fees.
Finally, students must be empowered with information about their rights and the proper channels for reporting fraud. Awareness campaigns warning against fake portals and phishing scams must be intensified. Students must also be given access to their full repayment schedules upfront, so they can verify that their loan principal matches their genuine educational expenses.
The NELFUND student loan scheme represents a historic commitment to expanding access to higher education in Nigeria. But fraud, inefficiency, and institutional greed threaten to turn this lifeline into a debt trap for an entire generation.
As the Minister of Education rightly noted, “any unauthorised deductions from student loans not only breach financial ethics but also undermine the very foundation upon which NELFUND was established”. The government must leave no stone unturned in its quest to uphold transparency, protect public funds, and ensure that students receive the full benefits of the scheme.
Nigerian students cannot afford to be treated as helpless spectators to administrative excesses. Every fraudulent naira added to a student’s loan today is a naira they will fight to repay tomorrow—long after they have left the university gates. The era of impunity must end. Justice must prevail, and every student must receive what rightfully belongs to them—and repay only what they genuinely owe.
Alao Adamadamosi Sunday arpa writes from Lokoja