The federal government has raised concerns over alleged collusion between some tertiary institutions and banks to defraud student loan beneficiaries, following revelations from an ongoing probe.
According to the National Orientation Agency (NOA), early investigations suggest that certain universities are conspiring with financial institutions to undermine the fair disbursement of funds under the National Student Loan Fund (NELFund) scheme.
The discovery was made public by Lanre Issa-Onilu, Director General of the NOA, after a meeting with Akintunde Sawyerr, Managing Director of NELFund.
In a statement on Sunday, Issa-Onilu said initial findings indicate that university authorities are deliberately withholding critical information about the release of loan funds. This, he noted, has prompted immediate intervention by NELFund.
The NOA accused some schools and banks of intentionally delaying disbursements to approved student applicants in order to exploit the situation for financial gain. It added that some institutions are refusing to acknowledge funds already released by NELFund.
Confirming the troubling trend, Sawyerr said during the meeting that NELFund had uncovered incidents where schools received the loan funds but failed to notify students or update their records accordingly.
“Recent findings by NELFund have shown that some institutions have received student loan disbursements directly into their accounts yet neglect to inform the affected students or record the payments in their financial records, leading to unnecessary confusion,” Sawyerr said.
He added, “Withholding critical financial information from students is not only unethical but also a breach of the principles on which NELFund was founded. We are prepared to take legal action against any institution engaged in such deceptive practices.”
Issa-Onilu issued a warning to the implicated universities and their partner banks, calling for an immediate halt to the misconduct. He also announced that the NOA has instructed its state directorates to intensify monitoring and collect feedback from students nationwide.
According to him, the federal government is prepared to sanction any school or financial institution found guilty of exploiting the student loan system.
President Bola Tinubu first signed the student loan policy into law in June 2023, aiming to provide interest-free loans to Nigerian students. Although originally scheduled to begin in October 2023, the program faced delays and was re-enacted in April 2024.
The loan application portal officially opened in May 2024, launching a pilot phase focused on federal tertiary institutions.
However, reports have emerged of significant delays in disbursing approved funds. Some students have approached exam periods or new academic sessions without receiving the promised financial support.
There have also been complaints about inconsistencies between the approved loan amounts and actual tuition fees, raising questions around future repayment terms.
NELFund had previously threatened legal action against institutions found to be withholding disbursement details from students without justification.
