NELFUND risks repeating the failures of Nigeria’s three previous student loan schemes unless it strengthens its loan recovery system before repayments begin, according to a higher education policy think tank, the iRead To Live Initiative.
In a policy brief released on Monday titled ‘Can NELFUND Sustain Itself?‘ Financing Nigeria’s Student Loan Scheme, the initiative warned that the student loan schemes introduced in 1972, 1988 and 1993 collapsed because loans went out faster than the government could recover them.
The report noted that NELFUND has disbursed roughly N355.87 billion to about 850,000 beneficiaries with the earliest enforcement window expected around 2028.
The iRead To Live Initiative drew a direct comparison with Nigeria’s previous student loan schemes, pointing to what it described as a recurring pattern of rapid disbursement without a sufficiently tested recovery system.
The initiative said Nigeria will only know whether NELFUND has broken from the pattern of the previous schemes when the first cohort reaches the end of the enforcement grace period.
It said the period leading up to that point would be critical, with several unresolved issues potentially determining the sustainability of the scheme.
The report said NELFUND has a limited window to strengthen its recovery system before the first borrowers become subject to enforcement.
The iRead To Live Initiative argued that this approach could be problematic in an economy where most workers operate outside formal payroll systems.
It cited National Bureau of Statistics data showing that 93% of employment was informal in Q2 2024, while self-employment accounted for 85.6%.
NELFUND’s student loan programme has expanded significantly since its application portal opened in May 2024, with the Fund’s disbursements rising as more students access financing.
The Federal Government has also taken steps to strengthen NELFUND’s funding base as its obligations grow.
More recently, Nairametrics reported that NELFUND debunked claims that beneficiaries could face life imprisonment for failing to repay their loans. The report noted that NELFUND’s disbursements had risen to N355.87 billion, with the Fund processing 1,659,853 applications as of September 3, 2026.
The Federal Government is also pursuing broader reforms aimed at improving the quality and competitiveness of Nigeria’s tertiary education system.
Earlier this month, Nairametrics reported that the government plans to strengthen Nigeria’s national tertiary institution ranking system and develop a framework that could serve as a benchmark for higher education institutions across Africa.
The proposed framework will extend beyond universities to cover polytechnics and colleges of education, with the government saying the system is intended to better reflect Nigeria’s educational environment, institutional priorities and development needs.
