The Nigeria Education Loan Fund has been urged to integrate its student loan system with Nigeria Revenue Service income data to strengthen repayment and recovery. The recommendation was contained in a policy brief released on Monday by higher education policy think tank, The iRead To Live Initiative.
The brief, titled “Can NELFUND Sustain Itself? Financing Nigeria’s Student Loan Scheme,” said NELFUND had disbursed N355.87bn to about 850,000 beneficiaries since its portal was launched in May 2024. It warned that the loans could prove difficult to recover under the existing repayment framework, particularly because of Nigeria’s large informal workforce.
According to the initiative, Nigeria has about 18 months to strengthen its recovery infrastructure before beneficiaries who complete the mandatory two-year post-NYSC grace period become subject to enforcement. It said relying mainly on employer-based deductions would leave self-employed, underemployed and other graduates outside formal payroll systems difficult to track.
The think tank said linking NELFUND to Nigeria Revenue Service income records would allow the government to identify borrowers and pursue repayments beyond formal employment. It argued that the current framework under Section 28(4) of the Students Loans (Access to Higher Education) Act, 2024, does not adequately address the realities of an economy where many workers operate outside formal payroll systems.
The initiative cited Kenya’s Higher Education Loans Board as an example, noting that the country has integrated its loan recovery system with the Kenya Revenue Authority and credit bureaus. However, it said 32.5 per cent of the Kenyan loan portfolio was reportedly in default as of June 2025, showing that tax-authority integration alone would not eliminate repayment challenges in economies with significant informality.
The brief also called on the National Assembly to clarify the treatment of interest on NELFUND loans. It pointed to an apparent inconsistency in the 2024 Act, noting that while the loans have been publicly described as interest-free, Section 17(1)(c) lists repayment of capital and interest among the Fund’s revenue sources. The initiative warned that the discrepancy could create legal uncertainty for borrowers who relied on the scheme’s public description.
The think tank stressed that NELFUND’s sustainability cannot yet be assessed based on its recovery performance because no beneficiary cohort has reached the repayment stage. It said the crucial test would come when repayments begin, arguing that decisions taken during the period before enforcement starts would determine whether the scheme avoids the problems that undermined Nigeria’s previous student loan programmes.
