N355.9BN STUDENT LOANS MAY FACE RECOVERY PROBLEMS, POLICY GROUP WARNS

About N355.9 billion disbursed through the Nigerian Education Loan Fund could face significant recovery challenges when beneficiaries begin repaying the loans, a higher education policy think tank has warned. The concern was raised in a policy brief released by The iRead To Live Initiative, which called on the Federal Government to strengthen the systems that will be used to track beneficiaries and recover outstanding debts.

The organisation recommended that NELFUND be integrated with income data from the Nigeria Revenue Service to make it easier for the government to identify beneficiaries who have started earning and determine their repayment obligations. According to the group, relying solely on existing information could make it difficult to effectively monitor graduates once they leave school and enter the labour market.

The warning comes as the student loan programme continues to expand, with hundreds of thousands of students already benefiting from government-backed financial support for their education. The policy group stressed that while expanding access to tertiary education financing was important, the long-term sustainability of the scheme would depend largely on the government's ability to recover loans from beneficiaries after graduation.

The think tank's concern also highlights the need for a reliable repayment architecture before the first major wave of beneficiaries becomes due for repayment. Without proper income tracking and coordination between relevant government agencies, the organisation warned that a substantial portion of the funds could become difficult to recover, potentially putting pressure on the government's ability to continue financing new applicants.

The development adds to ongoing discussions about the sustainability and administration of Nigeria's student loan scheme. NELFUND has previously defended the transparency of its application process, saying applications are submitted electronically and are tied to students' institutional records. With demand for the loans described as overwhelming, authorities now face the challenge of ensuring that the programme can support future students while also protecting public funds already committed to the scheme.