In a country where education is often hailed as the ladder to social mobility but access remains a steep climb for millions, the introduction of the National Student Loan Scheme marks a bold and long-awaited shift. For decades, financial hardship has been one of the biggest barriers preventing Nigerian youths from pursuing or completing higher education. Every year, thousands of brilliant students drop out or never even get a chance to enrol in universities, polytechnics, and colleges of education due to the crushing weight of tuition fees and the rising cost of living. Recognising this growing crisis, the Nigerian government officially launched the National Student Loan Scheme (NSLS) — a policy designed to democratise access to education and ease the financial burden on students, particularly those from low- and middle-income backgrounds. The scheme is more than just a financial lifeline; it is a national statement of intent to invest in the country’s most valuable resource — its human capital. Here are the key facts you should know:
1. Established by Law
The National Student Loan Scheme is backed by law through the Students Loans (Access to Higher Education) Act, 2024. This revised version of the original 2023 law aims to remove ambiguities and broaden access to financial aid for students across Nigeria’s higher institutions.
2. Managed by the Nigerian Education Loan Fund (NELFUND)
The scheme is administered by a dedicated body known as the Nigerian Education Loan Fund (NELFUND). This fund is responsible for application processing, disbursement, repayment tracking, and policy direction.
3. Open to All Students in Tertiary Institutions
Unlike the original 2023 Act, which restricted loans to students from families earning less than ₦500,000 annually, the 2024 amendment allows all students in public higher institutions—universities, polytechnics, colleges of education, and vocational institutions—to apply for the loan, regardless of income level.
4. Interest-Free Loans
One of the standout features of the NSLS is that the loans are interest-free, making it more affordable and student-friendly. However, administrative charges may apply depending on evolving regulations.
5. Digital Application and Disbursement
Applications are done online via the official NELFUND platform. The digital system is intended to reduce bureaucracy, ensure transparency, and track repayment efficiently.
6. Covers Tuition, Institutional Charges and Some Upkeep
The scheme currently covers tuition fees as well as some other expenses. It does not extend to accommodation, feeding, transportation, or other living expenses. However, there are ongoing discussions about expanding the scope to include more comprehensive financial coverage in the future.
7. Loans Are Paid Directly to Institutions
Instead of giving money to students, funds are disbursed directly to the educational institutions on behalf of the beneficiaries. This is meant to ensure the loan is used for its intended purpose.
8. Repayment Begins Two Years After NYSC
Students are expected to begin repaying the loan two years after completing the National Youth Service Corps (NYSC). Repayment is deducted directly from their salaries via the Integrated Payroll and Personnel Information System (IPPIS) or relevant tax records for self-employed graduates.
9. Aimed at Reducing Dropout Rates
One of the scheme’s core objectives is to reduce dropout rates caused by financial challenges. According to UNESCO, over 20 million Nigerian youths are out of school, many of whom cite poverty as the main barrier to education. The NSLS could help reverse that trend if implemented effectively.
10. Tied to Education Reforms
The National Student Loan Scheme is part of broader educational reforms championed by the administration of President Bola Ahmed Tinubu. It aligns with efforts to make education more inclusive, accessible, and relevant to national development.
11. It’s Not a Scholarship
Unlike scholarships that do not require repayment, the student loan scheme is a debt obligation. Students are required to repay the full amount over time, making it crucial to assess affordability and future income potential before applying.
12. It May Influence Future Private Sector Lending
If successful, the NSLS could create a model that encourages private financial institutions to offer student-friendly loans, expanding educational financing options beyond government funding.
