This column makes recommendations to the management of NELFUND on the measures they can take to make repayment of student loans easier for the beneficiaries.
When the Nigerian Education Loan Fund (NELFUND) opened its portal for application on Friday, May 24, 2024, some Nigerians who have witnessed countless failed government promises were skeptical. But with what we have seen, it is now a reality. Some applicants are already awaiting disbursement.
For the record, NELFUND isn’t the first student loan in Nigeria. There were similar loans for students between 1973 and 1991, after the first Nigerian Students Loans Board was set up in 1972. Students used the loans to finance their undergraduate programmes.
According to the Access to Higher Education (Repeal and Re-enactment) Bill, 2024, beneficiaries can begin to repay two years after their post National Youth Service Corps (NYSC).
For those who witnessed those years, when loans estimated at N46,000,000 were given to students, repayment was the major issue. Some beneficiaries went abroad after benefiting and never looked back to repay for others coming behind. The ongoing NELFUND must end this way. Measures should be put in place for repayment.
The timeline for the NELFUND loan repayment is fair enough. It’s a digital age, we now have undergraduates who work online while they study.
Here are the measures the government can take to help in recovery of NELFUND loan repayment:
Create NELFUND virtual wallet
There are thousands of homework assignments that students do while on campus and they earn in foreign currencies. For this set of people, they may have the financial capacity to repay even before completing the mandatory one-year NYSC. One of the ways NELFUND can make repayment seamless for the beneficiaries is by assigning to the account of each beneficiary virtual wallet.
Virtual wallet is a payment method that allows customers of a service to fund their wallet seamlessly, the balance of which they can use to cover charges on their account.
Virtual wallet will allow beneficiaries to transfer or deposit money into their virtual account, they can then use the balance to make payment for the part of their loan.
The funds in the beneficiary’s wallet can be used to pay for outstanding loans.
Major hosting companies and domain registrar like GO54 (formerly WhoGoHost) and NameCheap have virtual accounts for their clients to top up their wallet, which they use to clear future invoice or charges.
Apart from making it easy for customers to renew whatever services they have, it also makes it easy for them to deposit into their wallet regardless of how small it is.
We want to call on NELFUND to make this possible.
Creating virtual accounts on the NELFUND dashboard will teach the beneficiaries the actual savings for future use and make it less of a burden for them when it is time to start making payment for their loans.
Partnering with institutions for part-time jobs
As it is in the United Kingdom and the United States, where students can work part-time, the management of NELFUND should encourage federal and state higher institutions to create a portal where students can find jobs and get paid for their time by putting a limit on the number of hours they can work per week. Leeds International Study Centre has a model for this method.
Priority should be given to undergraduates instead of outsourcing workforce for certain services. The money earned from this task can be paid directly into the NELFUND wallet.
Partnership with the Ministry of Youth
The current minister of Youth Development, Jamila Bio Ibrahim, is someone who has many years of experience in human capital development and had worked on Sustainable Development Goals, she should have something remarkable to add to the student loan in Nigeria.
NELFUN should work with the Ministry of Youth Development on plans on how to find part-time jobs for students.
Takeaway
As the government plans to recover loans given to the students, an enabling environment should also be created for the beneficiaries to ease the process of repayment so that challenges with recovery can be minimized compared to the issue the government faced during the Nigerian Student Loan Boards of the 1970s.
All beneficiaries of the scheme should also know that it is a loan and not a grant, but the beauty of it is that it is an interest-free loan. Repayment is must to ensure continuity and the benefit of those coming behind.
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I have not received my upkeep of to till now
My name is Victoria Macrobt Okon.
I applied for the student loan mistakenly.
But now I wish to decline from the loan.
I had sent a letter to this effect. But it has not been declined yet.