A probe has uncovered allegations of unethical practices involving some universities and banks in the handling of student loan funds disbursed through the federal government’s loan scheme.
The National Orientation Agency (NOA), through its community orientation and mobilisation officers (COMO), said certain tertiary institutions are suspected of colluding with banks to unfairly disadvantage student beneficiaries of the loan programme.
Lanre Issa-Onilu, Director General of the NOA, disclosed the findings following a meeting with Akintunde Sawyerr, Managing Director of the National Student Loan Fund (NELFund). In a statement issued on Sunday, Issa-Onilu said early evidence points to university officials withholding key information related to loan disbursements, prompting NELFund to intervene.
The NOA alleged that some institutions, in partnership with specific banks, have intentionally delayed payments to approved student applicants for personal or institutional gain. It added that several universities are not acknowledging the disbursements made by NELFund to students.
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Sawyerr confirmed these issues at the meeting, citing cases where institutions received student loan funds directly but failed to notify recipients or record the payments accurately.
“Recent findings by NELFund have shown that some institutions have received student loan disbursements directly into their accounts yet neglect to inform the affected students or record the payments in their financial records, leading to unnecessary confusion,” he said.
“Withholding critical financial information from students is not only unethical but also a breach of the principles on which NELFund was founded. We are prepared to take legal action against any institution engaged in such deceptive practices.”
Issa-Onilu issued a warning to the implicated institutions and collaborating banks, demanding an immediate halt to the alleged misconduct. He also revealed that the NOA has instructed its state directorates to collect further feedback from students nationwide to support federal sanctions against any culpable schools or financial institutions.
President Bola Tinubu first signed the student loan policy into law in June 2023, with the aim of providing interest-free loans to students. Though initially set to launch in October 2023, the scheme was postponed until a re-enactment in April 2024. NELFund opened the loan application portal in May 2024, beginning with a pilot phase for federal tertiary institutions.
Despite these efforts, some students have reported delays in receiving funds, even after being approved. In some cases, the disbursed amounts have not matched actual tuition fees, leading to confusion about repayment terms. NELFund had earlier threatened legal action against institutions that failed to properly communicate disbursement details to applicants.
