Student Loan in Nigerian Universities (2025 Update)

Access to higher education in Nigeria has long been hindered by financial barriers for many students, especially coming from low- and middle-income households. Recognizing this, the Nigerian government recently introduced a formal student loan scheme through the Nigerian Education Loan Fund (NELFUND), backed by legislation. As of 2025, this has become the principal framework for student lending in public tertiary institutions across Nigeria.

In this article, we examine the structure, current status, opportunities, risks, and advice for students concerning the student loan regime in Nigerian universities today.

Background & Legal Framework

Student Loans (Access to Higher Education) Act, 2024

The foundation for this system is the Student Loans (Access to Higher Education) (Repeal and Re-enactment) Act, 2024. Under this Act, the Federal Government established NELFUND as the universal student loan agency for tertiary education financing.

By enacting this law, the government made it clear that student loans would be part of Nigeria’s broader strategy for expanding access to tertiary education.

Before this, student financing was mostly informal (family, scholarships, private sponsors) and fragmented.

Launch and Early Disbursements

• NELFUND commenced operations in mid-2024, opening its application portal in May 2024.

• The first disbursements were made to a limited number of institutions (19 institutions initially) for the 2023/2024 session. By February 2025, data from NELFUND showed that ₦22,736,960,971 had been disbursed in institutional fees support for 215,514 students across public tertiary institutions.

• In his 2025 Independence Day address, President Bola Tinubu stated that about 510,000 students have benefitted from NELFUND across 36 states and the FCT, with ₦99.5 billion disbursed in tuition loans and ₦44.7 billion in upkeep allowances across 228 institutions.

These numbers reflect a rapid scale-up in just about a year of operations.

How NELFUND’s Student Loan Works (2025)

Components of the Loan

The NELFUND loan is designed to cover two major cost components of tertiary education:

1. Institutional Charges / Tuition & Fees – This portion is paid directly to the student’s institution (the university, polytechnic, or college).

2. Upkeep / Living Allowance – A stipend to help with accommodation, food, transportation, and other living expenses.

NELFUND refers to both as institutional and upkeep disbursements.

Application & Verification Process

• Students must apply through the official NELFUND portal during the window announced for their academic session.

• Their documentation (e.g. JAMB admission slip, school ID, transcripts, bank account details) is screened. Any mismatch or missing documents can lead to rejection.

• The student’s institution must also verify and approve their data for the student to qualify.

• Regarding upkeep payments, NELFUND recently clarified that these will now be disbursed strictly based on academic sessions to avoid duplication, since many institutions may operate out of sync due to non-harmonized academic calendars. nuc.edu.ng

• If an application is rejected at any stage, the reason is displayed on the student’s dashboard so they can correct and reapply. nuc.edu.ng

Disbursement & Limits

• For tuition, the funds are paid directly to the institution on behalf of the student.

• For upkeep allowance, funds are remitted to the student’s verified bank account, but only during the active academic session as defined by their institution.

• The exact quantum of tuition or upkeep per student is not publicly uniform, and appears to depend on institutional classification (federal, state, or college) and internal cost structure.

• NELFUND has also published “disbursement dashboards” to show how much is being paid out to institutions and students. X (formerly Twitter)+1

Repayment Terms

The 2024 Act and NELFUND’s policies set out a repayment framework, though specific rules may still evolve:

• After graduation (or exit from school), students enter a grace period before repayment begins.

• Repayments are expected to be income-contingent, meaning the student pays a percentage of their income rather than a fixed burden.

• Those who default may incur penalties, and may be blacklisted or prevented from certain public sector employment or further benefits.

• The law also envisages that NELFUND could partner with employers, states, and private agencies to enforce repayment.

• As of mid-2025, NELFUND has published guidance and policies on repayment schedules, but public uptake is still minimal (many graduates are yet to reach repayment stage).

Who Is Eligible?

Here are the eligibility criteria (subject to modifications) as of 2025:

1. Student Status

   • Must be a student in a recognized public tertiary institution (university, polytechnic, colleges of education) in Nigeria.

   • Some state institutions are being progressively onboarded.

2. Academic Admission

   • The student must have been admitted via standard processes (e.g. JAMB) into their institution.

   • Must satisfy departmental requirements.

3. Documentation & Verification

   • Must submit required official documents, bank account details, identification, etc.

   • The institution must verify the student’s details.

4. Session Alignment

   • The application must fall within the academic session for which the student is applying (for both tuition and upkeep

5. Good Standing

   • Students with serious disciplinary records or who have defaulted previously may be disqualified.

6. Others

   • There may be caps or limits (e.g. restriction to a maximum number of years, or prioritization of needy students first) though these are not fully public.

   • Private university students are not currently covered under the scheme.

Because the scheme is still relatively new, NELFUND and the government may revise eligibility criteria as challenges emerge.

Benefits & Prospects

Implementing a formal student loan scheme brings several potential gains — though with caveats.

Increased Access to Education

Many more students from less privileged backgrounds can now afford to attend university, knowing a mechanism exists to assist with fees and living expenses.

Reduction of Dropout Rates

Financial stress is a key reason many students drop out. With tuition and upkeep support, fewer students will be forced to quit mid-session.

Predictable Funding for Institutions

Universities benefit by receiving funds directly, reducing delays or shortfalls in student payments. This helps their cash flow and planning.

Accountability & Transparency

Public dashboards, auditing, and legal frameworks make the system more transparent than ad hoc scholarships or sponsorships.

Stimulus for Economy

A more educated workforce can fuel innovation, entrepreneurship, and higher national productivity.

Encouragement of Discipline & Financial Responsibility

Graduates must repay based on income, which fosters responsibility and accountability among beneficiaries.

Key Challenges & Criticisms

Being a novel and ambitious program, the NELFUND scheme also faces formidable challenges. Some of the pressing issues include:

Institutional Calendar Misalignment

Because Nigerian universities and tertiary institutions often run on non-synchronized academic calendars (different start and end dates), there is difficulty in timing upkeep disbursements uniformly. NELFUND has responded by restricting upkeep payments strictly to declared academic sessions.

Delay in Disbursement

Some institutions or students report delays in the release of funds, affecting their ability to settle fees or meet living expenses on time.

Verification Bottlenecks

At both application and institutional verification stages, mismatches in documentation, delays, or non-cooperation from institutions can lead to rejections.

Sustainability & Default Risk

A big concern is repayment defaults. If a substantial number of graduates fail to repay, the scheme might become a burden on public finances.

Public Awareness & Trust

Many students and parents remain unaware of the scheme’s details. Moreover, skepticism exists about its durability, given past broken promises in education funding.

Exclusion of Private Universities

Private universities are currently not covered, leaving students in those institutions without access to the scheme’s benefits.

Funding Adequacy

The amounts disbursed may not fully cover all tuition or upkeep costs, especially for students in higher-cost or specialized programs.

Inflation & Currency Pressures

Given Nigeria’s inflationary environment, fixed loan amounts may lose value rapidly, making upkeep stipends less helpful.

What Students Should Know & Advice

If you are a student (or prospective student), or advising one, here’s what to do:

1. Stay Informed & Monitor Announcements

   • Watch the NELFUND portal and your institution’s communications for application windows.

   • Follow their social media pages and check your email regularly.

2. Prepare Required Documents Early
   Make sure you have your admission letter, JAMB printout, ID cards, transcripts, and valid bank account details ready before the window opens.

3. Check Institutional Participation
   Confirm whether your university or college is among those recognized by NELFUND. Not all state institutions may be onboarded yet.

4. Apply Within the Session Window
   Upkeep payments are strictly tied to the declared academic session—if you apply outside that period, you may be disqualified.

5. Track Your Application Status
   Keep checking your dashboard for approval, rejection reasons, or requests for missing documents.

6. Use Funds Wisely
   Since upkeep is limited, prioritize key needs (accommodation, food, transport) and avoid overspending.

7. Plan for Repayment
   Even though repayment comes later, treat the loan as a real debt. Get ready for disciplined financial management after graduation.

8. Engage with Student Unions / Associations
   Push for your institution to cooperate fully with NELFUND (verification, uploading academic calendars, etc.).

9. Provide Feedback & Report Issues
   If your application is unreasonably delayed or rejected unfairly, report through official channels and engage media or student advocacy groups.

10. Consider Alternative / Supplementary Funding
    Don’t rely solely on the loan—continue pursuing scholarships, work-study, grants, or parental support where possible.

Outlook & What to Watch in 2026

Given how fresh the program is, the coming year will be critical. Here are developments to watch:

• Expansion to More Institutions
  Increasing coverage to all state universities, private universities, polytechnics, colleges of education, etc.

• Refinements to the Repayment Mechanism
  More clarity on grace periods, default enforcement, and partnership with employers or tax authorities to facilitate deductions.

• Increased Public Funding & Sustainability Measures
  Ensuring the fund remains solvent and that inflows from repayments and government budget can support future demand.

• Improved Disbursement Efficiency
  Reducing delays, automating verification, streamlining institutional coordination.

• Better Communication & Transparency
  More accessible dashboards, regular media updates, outreach to rural or underinformed students.

• Inclusion of Private Institution Students
  Possibly widening the scheme’s scope to include private university students, either directly or via partnerships.

• Adjustment for Inflation & Variable Allowances
  Revising upkeep amounts periodically to match cost-of-living increases, especially in more expensive cities.

• Integration with Scholarship & Grant Programs
  Harmonizing student loans with existing scholarship systems to avoid overlap or redundancy.

Conclusion

The introduction of the NELFUND student loan scheme marks a bold and long-needed step in Nigeria’s education sector. By legislating a formal structure, the government is signaling serious intent to improve access and affordability of tertiary education. As of 2025, the scheme has already disbursed substantial funds to hundreds of thousands of students, though significant challenges remain.

For students, the key is to stay informed, apply properly and on time, use funds responsibly, and be ready for repayment after graduation. For the system to succeed, government agencies, institutions, and students must cooperate transparently and efficiently.