The Federal Ministry of Education has launched a formal probe into alleged unauthorized deductions from student loans disbursed under the Nigerian Education Loan Fund (NELFund) by some Nigerian universities, following a media report that raised serious concerns.

In a statement released on May 1, 2025, the Honourable Minister of Education, Dr. Maruf Olatunji Alausa, described the allegations as “very disturbing and extremely concerning.”

He added that “any unauthorized deductions from student loans not only breach financial ethics but also undermine the very foundation upon which NELFund was established.” 

He emphasized the damaging effect such actions could have on the credibility of the loan scheme.

“Any unauthorized deductions from student loans not only breach financial ethics but also undermine the very foundation upon which NELFund was established,” he stated

He warned that if proven true, the actions would constitute a betrayal of public trust and the government’s efforts to ensure equitable access to education.

Backstory 

The Independent Corrupt Practices and Other Related Offences Commission (ICPC) had earlier launched its own investigation following a media report that alleged the involvement of 51 tertiary institutions in illegal deductions from students’ loans.

The Commission said these deductions, ranging from N3,500 to N30,000 per student, were made from institutional fees paid via the loan fund.

According to the ICPC, although the Federal Government released N100 billion for the student loan scheme, only N28.8 billion has so far been disbursed to students, leaving an unaccounted balance of N71.2 billion.

The anti-corruption body has invited the CEO of NELFund, Akintunde Sawyerr, along with officials of the Central Bank of Nigeria and others, to provide explanations. The investigation will now extend to both the beneficiary institutions and individual student recipients.

In response to the ICPC’s action, the Nigerian Education Loan Fund denied reports of fund mismanagement. It clarified that the financial figures being circulated in the public are drawn from older education financing interventions that predate NELFUND’s launch in 2024 and therefore have no relevance to the present scheme.

The agency explained that all institutional fees are paid directly to verified institutions, while student upkeep allowances are deposited into verified bank accounts of eligible applicants.

It emphasized that the process is fully automated, eliminating any human interference, and that all transactions are digitally tracked, timestamped, and verifiable.

Emergency meeting scheduled 

To address the issue, the Ministry will hold an urgent meeting on May 6, 2025, with Vice Chancellors of the affected universities and the Managing Director of NELFund.

The meeting, according to the Ministry, will thoroughly investigate the claims, ensure accountability, and “reaffirm the Ministry’s zero-tolerance policy toward financial malpractice in the education sector.” 

Transparency tools introduced 

The Ministry also announced a new set of initiatives aimed at enhancing transparency in the disbursement and use of education loan funds.

In collaboration with the Athena Centre, the Ministry will launch a compliance-tracking initiative and a countdown webpage to monitor institutional transparency.

An Annual University Transparency Index will also be introduced to promote accountability and improve the global ranking of Nigerian universities.

Additionally, bursars and ICT Heads from universities and polytechnics will undergo training on the development and maintenance of open-portal systems that ensure real-time tracking of student loan transactions.

Dr. Alausa reaffirmed the government’s commitment under the National Education Sector Reform Initiative (NESRI), emphasizing the importance of transparency, responsible financial conduct, and ensuring that every kobo allocated for student welfare is used appropriately.

He assured Nigerians that the issue would not be overlooked and that anyone found guilty would face appropriate sanctions.

He also highlighted NELFund, a flagship initiative launched by President Bola Ahmed Tinubu, was created to expand access to high-quality education and to provide financial support to students and institutions in a fair and transparent manner, he stressed that any attempt to exploit the fund would contradict the President’s vision for inclusive human capital development.