House Probes Alleged Unethical Practices in Disbursement of Student Loans

Adedayo Akinwale in Abuja 

The House of Representatives has launched an investigation into alleged unethical practices in the disbursement of student loans.

It also mandated all tertiary institutions to immediately refund students who paid their tuition fees before their NELFUND loan disbursement.

The resolutions of the House were sequel to the adoption of a motion moved at the plenary on Wednesday by Hon. Aliyu Mustapha.

Moving the motion, the lawmaker said the Student Loans (Access to Higher Education) Act, 2024 was enacted to ensure transparent, timely and equitable access to interest-free loans for all Nigerian students pursuing higher education. 

Mustapha added that significant progress has been made in the programme so far, with over half a million applicants and the disbursement of over N54 billion to beneficiaries across the country.

He recalled a recent report by the National Orientation Agency (NOA) alleging collusion between certain tertiary institutions and financial institutions to delay, divert or conceal disbursement of student loans under the Nigerian Education Loan Fund (NELFUND).

Also aware that the NOA and NELFUND have uncovered that some institutions received loan disbursements but failed to notify beneficiaries or update financial records, which is a violation of the NELFUND guidelines, raising concerns over transparency and accountability. 

The lawmaker stressed that the Ministry of Education has initiated a probe into alleged unauthorised deductions from student loans by some universities, describing the act as a gross violation of public trust and a breach of the Student Loans Act, 2024.

He expressed concern about reports of mismanagement and lack of proper verification, including instances where tertiary institutions upload inflated school fees on the NELFUND portal, cases of final-year students receiving loans after graduation and disbarments made to tertiary institutions even after students have fully paid their tuition fees to avoid delays.

Mustapha expressed worry that violations of NELFUND guidelines by some institutions might have denied thousands of students their rightful access to loans and undermined the credibility of the loan scheme.

He was of the option that without robust oversight and enforcement, such violations might continue unchecked, undermining public confidence in the student loan programme.

The House urged: “NELFUND to implement advanced IT solutions to enhance verification and streamline processes within the system;

 ii. also urged NELFUND to report to relevant authorities and sanction any institution found in violation of the Act or Guidelines; 

“Mandate all tertiary institutions to immediately refund students who paid their tuition fees before their NELFUND loan disbursement.”

The House also mandated the House Committees on Student Loans, Scholarships and Higher Education Financing; Banking and Other Ancillary Institutions; Anti-Corruption; University Education to investigate the alleged diversion, non-disclosure, and mismanagement of student loan disbursements, as well as non-compliance with the Student Loans Act, 2024, and report back to the House within four weeks.