Student Loan Fund Warns Varsities Against Fraud, Threatens Sanctions

The Nigerian Education Loan Fund (NELFUND) has issued a strong warning to tertiary institutions, cautioning that any school found guilty of fraudulent practices in the student loan scheme will face sanctions.

According to the latest operational guidelines of the scheme, institutions that falsify student records, collude with students to illegally access loans, or fail to refund excess payments will be penalized.

The directive follows recent concerns over cases of overpayment and the refusal of some schools to return duplicate disbursements. To address the lapses, the new rules set clear timelines and penalties.

“An eligible tertiary institution shall refund any overpayment or duplicated payments made for any student. Institutions are to process and issue refunds within a maximum of 30 calendar days, or within such other period as may be determined by the board,” the document stated.

On enforcement, NELFUND warned that any institution violating the Student Loan Act, 2024, or provisions of the guidelines, risks suspension from receiving further disbursements.

The document further added: “An institution shall be suspended if it engages in fraudulent activities related to institutional charges payment, such as falsifying student information or colluding with students to obtain loans for ineligible purposes, or if it fails to refund any overpayments or duplicate payments made for any student.”

The fund also explained that disbursements may be withheld while allegations of fraud or irregularities are being investigated.

However, NELFUND clarified that existing beneficiaries would not be affected by the suspension of their schools, except in cases where overpayments or duplicate payments are involved.