KEY POINTS

• Nigeria’s Federal Government investigates 51 universities and NELFund officials over alleged illegal deductions from student loans, totaling billions of naira, prompting an emergency summit on accountability.

• New initiatives include a public compliance tracker, an Annual Transparency Index, and staff training to prevent future misuse, though experts question their delayed implementation.

• The scandal highlights persistent corruption in Nigeria’s education sector, threatening the viability of a program critical to improving tertiary enrollment, which currently stands at just 12% for eligible youth.

The Federal Government has escalated efforts to address allegations of widespread mismanagement within Nigeria’s student loan program, summoning vice-chancellors of 51 universities and the Managing Director of the Nigeria Education Loan Fund (NELFund) to an emergency meeting on May 6, 2025.

The move follows a damning report by the Independent Corrupt Practices and Other Related Offences Commission (ICPC), which uncovered illegal deductions and potential diversion of funds meant for tuition and student upkeep under the NELFund scheme.

Education Minister Olatunji Alausa, in a statement issued by the Ministry’s spokesperson Boriowo Folasade, described the allegations as “a gross violation of public trust” and emphasized the government’s commitment to “rooting out financial malpractice.” Launched in May 2024, NELFund was designed to provide interest-free loans to tertiary students, with N53.8 billion disbursed by April 2025—N30.1 billion for institutional fees and N23.6 billion for student stipends.

However, audits revealed discrepancies, including unauthorized deductions of up to 15% from beneficiaries’ accounts by unnamed institutions.

Skepticism grows amid systemic corruption concerns

Channelstv reports that the scandal has reignited debates about accountability in Nigeria’s education sector, where corruption remains endemic.

A 2024 Transparency International report ranked Nigeria 154th out of 180 countries in its Corruption Perceptions Index, with education funds frequently misappropriated.

“This isn’t just about loans—it’s about whether Nigerian students can ever trust the system,” said Amina Bello, president of the National Association of Nigerian Students (NANS).

To salvage the program, the Ministry announced a partnership with the Athena Centre for Policy and Leadership to launch a compliance-tracking dashboard, an Annual University Transparency Index, and training for university bursars and ICT heads.

“We will publish real-time data on fund utilization and penalize non-compliant institutions,” Folasade stated. However, critics argue such measures are overdue. “Why weren’t safeguards implemented at the start?” questioned Dr. Kemi Adebola, an education economist at Lagos State University. “Reactive policies won’t undo the harm done to students who relied on these funds.”

Meanwhile, affected universities have remained silent, though sources at two institutions in Lagos and Kano, speaking anonymously, denied intentional wrongdoing. “Bureaucratic delays in fee transfers sometimes force schools to temporarily deduct from upkeep allowances,” claimed one administrator.

The ICPC has yet to name implicated universities but confirmed arrests of three bursars and a NELFund accountant in ongoing probes.