Reps to probe alleged diversion of student loans by tertiary schools

The house of representatives has resolved to probe the alleged diversion of student loan funds.

The green chamber passed the resolution in a plenary session on Wednesday following the adoption of a motion sponsored by Aliyu Abdullahi, a lawmaker from Kaduna.

Moving the motion, Abdullahi cited findings by the National Orientation Agency (NOA).

The NOA had alleged collusion between some tertiary and financial institutions to delay, divert, and conceal the disbursement of student loan funds.

The legislator stated that NOA also discovered that some institutions received loan disbursements but failed to notify beneficiaries or update their financial records.

He said the allegation indicates a gross violation of public trust and a breach of the Student Loans Act 2024, and raises concerns over transparency and accountability.

Abdullahi said the claims of mismanagement and lack of proper verification, including the upload of inflated school fees on the NELFund portal with final-year students receiving loans after graduation, must be investigated.

The motion was unanimously adopted after it was put to a voice vote by Tajudeen Abbas, speaker of the house.

Consequently, the house asked NELFund to implement “advanced IT solutions” to enhance verification.

The lower legislative chamber directed tertiary institutions to immediately refund students who had paid their tuition fees before the NELFund load was disbursed.

The green chamber mandated the committees on student loans, scholarships and higher education, banking, anti-corruption, and university education to investigate the “diversion, non-disclosure, and mismanagement of student loan disbursements”.

The committees, it added, are to report back within four weeks for further legislative action.

In April 2025, a report alleged significant misappropriation within Nigeria’s student loan scheme affecting at least 51 tertiary schools.

The Independent Corrupt Practices and Other Related Offences Commission (ICPC) said only N28.8 billion in student loan disbursements from NELFund reached students out of N100 billion allocated for the purpose, leaving N71.2 billion unaccounted for.

ICPC’s preliminary probe said institutions received the funds, but a substantial portion did not benefit the intended recipients.

The Nigerian Education Loan Fund (NELFund), which administers the student loan scheme, refuted allegations of misappropriation and mismanagement of student loan funds.

But the fund, alongside the NOA, accused unnamed institutions of colluding with banks to shortchange student loan applicants.

The ICPC’s special task force questioned key stakeholders, including NELFund, the director general of the budget office, the accountant general of the federation, central bank officials, and public tertiary school administrators on the matter.

The ministry of education launched a probe into alleged unauthorised deductions of student loans by tertiary schools.

But Tunji Alausa, the minister of education, said evidence has yet to convincingly prove illegal deductions from the loans by schools.

He constituted a committee to harmonise the naming of university charges, many of which he said are often mistaken for hidden deductions from the loans.