JUST IN: Reps probe NELFUND over alleged fraud in student loan disbursement

The House of Representatives on Wednesday resolved to investigate the activities of the Nigerian Education Loan Fund (NELFUND) over allegations of unethical practices in the disbursement of student loans and to ensure compliance with the Student Loans (Access to Higher Education) Act, 2024, and its associated guidelines.

This resolution followed the adoption of a motion of urgent public importance sponsored by Hon. Aliyu Mustapha, who called for the House’s intervention.

In his lead debate, Hon. Mustapha noted that the Student Loans (Access to Higher Education) Act, 2024, was enacted to guarantee transparent, timely, and equitable access to interest-free loans for all Nigerian students pursuing higher education.

“The House also notes that significant progress has been made in the programme so far, with over half a million applicants and the disbursement of more than N54 billion to beneficiaries across the country.

“The House is aware of a recent report by the National Orientation Agency (NOA), which alleges collusion between certain tertiary institutions and financial institutions to delay, divert, or conceal the disbursement of student loans under NELFUND.

“The House is also aware that the NOA and NELFUND have uncovered cases where some institutions received loan disbursements but failed to notify beneficiaries or update financial records—actions that violate NELFUND guidelines and raise concerns about transparency and accountability.

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“The House is further aware that the Federal Ministry of Education has initiated a probe into alleged unauthorised deductions from student loans by some universities, describing the act as a gross violation of public trust and a breach of the Student Loans Act, 2024.

“The House is concerned about reports of mismanagement and flawed verification processes, including instances where tertiary institutions uploaded inflated tuition fees on the NELFUND portal, final-year students received loans after graduation, and disbursements were made to institutions even after students had fully paid their tuition fees to avoid delays.

“The House is worried that violations of NELFUND guidelines by some institutions may have denied thousands of students their rightful access to loans and undermined the credibility of the loan scheme.

“The House is further worried that, without robust oversight and enforcement, such violations may continue unchecked, thereby eroding public confidence in the student loan programme,” he stated.

While urging NELFUND authorities to implement advanced IT solutions to enhance verification and streamline internal processes, the lawmakers also mandated the agency to report any institution found in violation of the Act or its guidelines to the relevant authorities and to apply appropriate sanctions.

Accordingly, the House directed all tertiary institutions to immediately refund students who had paid their tuition fees prior to the disbursement of their NELFUND loans.

To this end, the House mandated the joint Committees on Student Loans, Scholarships and Higher Education Financing; Banking and Other Ancillary Institutions; Anti-Corruption; and University Education to investigate the alleged diversion, non-disclosure, and mismanagement of student loan disbursements, as well as non-compliance with the Student Loans Act, 2024, and to report back within four weeks.

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