The Federal Government has uncovered a worrying trend of collusion between certain banks and institutions of higher learning, allegedly aimed at shortchanging beneficiaries of the recently launched student loan scheme.
Findings from the National Orientation Agency (NOA) revealed that some approved loans under the Federal Government Student Loan Fund, which had already been disbursed, never reached the intended students due to unethical practices by the receiving institutions and financial institutions.
The Director General of the NOA, Mallam Lanre Issa-Onilu, made this known via a statement on X (formerly Twitter), following an internal investigation carried out by the Agency’s Community Orientation and Mobilization Officers (COMOs).
Unethical practices exposed
“Recent investigations into the disbursement of the Federal Government Student Loan Fund have uncovered several unethical practices by some institutions of higher learning,” the NOA disclosed.
According to the findings, certain universities deliberately withheld or manipulated key financial information, preventing students from receiving their entitled loan funds. In some instances, the loan amounts were paid directly into university accounts, without students being notified.
Furthermore, there were cases where schools demanded full tuition fees from students, despite already receiving payments from the Nigerian Education Loan Fund (NELFUND) on their behalf.
“The NOA’s feedback shows how specific institutions have, in connivance with some banks, deliberately delayed payments to successful student applicants for personal financial benefit,” Mallam Issa-Onilu said.
“Such actions are both unethical and a breach of the principles upon which NELFUND was founded. Legal action will be pursued against institutions engaging in such deceptive practices.”
While the NOA did not name the institutions and banks involved, it warned that strict action would follow if the malpractice continues.
Government response and oversight
To tackle the issue, the NOA has instructed its state directorates nationwide to collect further reports from affected students, in order to build a clearer picture and inform decisive action against offending institutions.
The federal government has issued a strong warning to any university or financial body engaging in such conduct, urging immediate cessation and full cooperation with the loan disbursement process.
Issa-Onilu emphasised the need for transparency and ethical compliance among participating bodies.
He expressed confidence that improved oversight would help restore public trust in the student loan programme and ensure funds reach their rightful recipients.
Background to the scheme
The student loan initiative was first signed into law by President Bola Ahmed Tinubu in June 2023, with the aim of providing interest-free loans to Nigerian students in tertiary institutions.
Originally scheduled to launch in October 2023, the scheme experienced delays before officially relaunching in April 2024. Its pilot phase, which commenced in May 2024, currently covers federal tertiary institutions.
The federal government’s intervention underscores its commitment to education access and equity, as well as its determination to hold institutions accountable in the delivery of public support programmes.