The Federal Government may struggle to recover the N355.87bn released under its student loan programme unless it introduces a broader system for tracking beneficiaries and collecting repayments, a policy organisation has cautioned.
The concern was raised by The iRead To Live Initiative in a new policy brief, which proposed linking the Nigeria Education Loan Fund with income records held by the Nigeria Revenue Service.
NELFUND has, since commencing operations through its student loan portal in May 2024, disbursed about N355.87bn to approximately 850,000 students, according to the report.
The organisation said the government should use the period before repayments become enforceable to build a reliable recovery structure. It estimated that about 18 months remain before beneficiaries who have completed the required two-year grace period after the National Youth Service Corps could begin facing repayment enforcement.
According to the group, the current arrangement places too much emphasis on deductions from formal employees, leaving graduates who run businesses, work independently or earn their livelihoods outside the formal economy potentially difficult to trace.
It therefore recommended that NELFUND’s records be connected to the NRS income database, saying such an arrangement would give the authorities a better means of identifying borrowers and recovering money from graduates who are not captured by conventional employer-based deductions.
The policy group also urged lawmakers to resolve what it described as uncertainty over whether interest can be charged on the loans. It pointed to Section 17(1)(c) of the 2024 Students Loans Act, which mentions repayment of “capital and interest” despite repeated public descriptions of the scheme as interest-free.
The initiative said NELFUND’s sustainability would ultimately depend on how effectively it handles repayment, rather than simply how much money it has distributed.
It stressed that the scheme had yet to undergo its first major repayment test, as none of the beneficiary cohorts had reached the enforcement stage.
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