The Nigerian Education Loan Fund (NELFUND) is spending about ₦16 billion monthly on upkeep allowances for student beneficiaries, even as the agency is yet to begin recovering loans disbursed under the Federal Government’s student loan scheme.
NELFUND Managing Director, Akintunde Sawyerr, disclosed this during an interview with ARISE NEWS on Monday, August 31, 2026, while discussing the progress and sustainability of the student loan programme.
Sawyerr said the scheme, which has been in operation for more than two years, had not yet recorded loan recoveries from beneficiaries.
The disclosure has raised fresh questions about the long-term financing of the programme, particularly as the number of beneficiaries and the government’s financial commitments continue to grow.
NELFUND records ₦16bn monthly upkeep bill
According to Sawyerr, NELFUND currently spends approximately ₦16 billion every month on upkeep payments to students enrolled in the scheme.
The upkeep component is designed to provide financial support to eligible students to help them meet some of their day-to-day expenses while pursuing their education.
Unlike tuition payments, which are made directly to participating institutions, upkeep payments provide beneficiaries with funds intended to assist with living and academic-related expenses.
The monthly commitment means NELFUND could be spending roughly ₦192 billion annually on upkeep alone if the current level of expenditure remains unchanged throughout a full year.
The figure does not include other financial obligations associated with the administration of the student loan programme, including tuition and other approved educational expenses.
Student loan recovery yet to begin
Sawyerr said NELFUND had yet to commence recovering the loans provided to beneficiaries despite the programme being more than two years old.
The absence of loan recovery means the fund is currently relying heavily on government funding and other sources to meet its obligations.
The development is particularly significant because the student loan programme was designed as a revolving financing mechanism.
Under such a model, money provided to students is expected to eventually be repaid, allowing the fund to use recovered resources to support subsequent generations of beneficiaries.
However, with repayments yet to commence, NELFUND is currently carrying the cost of supporting existing beneficiaries without receiving corresponding repayments from previous beneficiaries.
Government explores alternative funding
The NELFUND boss said the Federal Government was exploring alternative ways of financing the student loan programme to ensure that it remains sustainable.
Sawyerr acknowledged that the growing financial requirements of the scheme made it necessary to consider additional funding mechanisms.
He did not suggest that the government was abandoning the student loan programme.
Instead, he indicated that discussions were ongoing on how to create a sustainable financial structure capable of supporting the scheme as the number of beneficiaries increases.
The issue of funding is expected to become increasingly important as more Nigerian students seek access to the programme.
How the student loan scheme works
The Federal Government’s student loan programme was established to provide financial assistance to Nigerian students who require support to pursue tertiary education.
NELFUND is responsible for administering the scheme, including receiving applications, assessing beneficiaries and disbursing approved loans.
The programme covers eligible students in higher institutions, with support provided for approved institutional charges and upkeep, subject to the applicable rules.
The scheme was introduced as part of efforts to reduce financial barriers to tertiary education and expand access to higher education for students from different economic backgrounds.
The government has repeatedly presented the initiative as a major component of its education reforms.
Sustainability becomes major concern
The revelation about the absence of loan recovery has placed the sustainability of the scheme under renewed scrutiny.
A student loan programme can only operate sustainably over the long term if there is a reliable mechanism for replenishing the funds being disbursed.
Without recoveries, the government may have to continue providing substantial amounts of fresh funding to meet the obligations of the scheme.
This becomes more challenging as the beneficiary population expands.
If NELFUND continues to record a monthly upkeep bill of approximately ₦16 billion, the financial requirement could become significantly larger over several years.
The situation could also place additional pressure on public finances unless alternative sources of funding are developed.
Why loan recovery matters
Loan recovery is central to the concept of an education loan fund.
Unlike a scholarship, which is generally awarded without an expectation of repayment, a loan is intended to be repaid under agreed terms.
Recovered funds can subsequently be re-lent to other students, creating a revolving pool of resources.
For NELFUND, the eventual commencement of repayments would therefore represent an important milestone in establishing the financial sustainability of the student loan system.
However, repayment cannot begin until beneficiaries reach the stage at which they are required to repay under the applicable rules.
The timing and structure of repayment are therefore important factors in determining when NELFUND can begin recovering its disbursements.
Growing demand for student loans
The Federal Government’s student loan initiative has attracted significant interest from Nigerian students since its launch.
The programme was initially introduced under the Student Loans (Access to Higher Education) Act and subsequently underwent changes aimed at expanding access and simplifying the process.
President Bola Tinubu’s administration has continued to position NELFUND as an important mechanism for improving access to tertiary education.
As more students become aware of the programme, demand for financial assistance is expected to remain high.
The growing demand, however, also means that NELFUND will need a reliable and predictable source of funding to maintain its operations.
NELFUND faces balancing act
NELFUND is consequently facing the challenge of expanding access to education while maintaining financial sustainability.
On one hand, increasing the number of beneficiaries could help more Nigerians overcome financial barriers to tertiary education.
On the other hand, every additional beneficiary increases the amount required for tuition-related support and upkeep.
The reported ₦16 billion monthly upkeep commitment illustrates the scale of the financial responsibility already facing the agency.
Without a corresponding recovery mechanism, the fund’s dependence on government allocations or alternative financing arrangements could remain substantial.
What happens next
Sawyerr’s disclosure suggests that the Federal Government and NELFUND are now considering how to strengthen the financial foundation of the student loan programme before repayment becomes a major source of funding.
Alternative financing mechanisms could help reduce pressure on government resources and ensure that eligible students continue to receive support.
The precise funding arrangements being considered by the government were not fully disclosed in the interview.
For now, NELFUND remains responsible for administering the programme and meeting its financial obligations to beneficiaries.
The agency’s ability to sustain the scheme will depend on how successfully the government establishes additional funding channels and, eventually, implements an effective loan recovery system.
As Nigeria continues to grapple with the rising cost of education and household financial pressures, the student loan programme remains a significant part of efforts to expand access to higher education.
However, with NELFUND spending about ₦16 billion monthly on student upkeep and yet to recover loans from beneficiaries, the question of how the scheme will be financed over the long term is likely to remain a major issue for policymakers.
