An investigation has revealed alleged unethical practices involving some universities and banks in the management of student loans provided through the federal government’s loan program.
According to the National Orientation Agency (NOA), certain universities may be working with banks to exploit the student loan scheme, leaving student beneficiaries at a disadvantage. The agency’s community officers (COMO) raised concerns that some institutions are withholding important information about loan disbursements.
NOA Director General, Lanre Issa-Onilu, shared these findings after meeting with Akintunde Sawyerr, Managing Director of the National Student Loan Fund (NELFund). Issa-Onilu said there is early evidence that some school officials are blocking or delaying student access to loan funds, prompting NELFund to step in.
The NOA claims some universities and partner banks are intentionally delaying payments to approved students for personal or institutional gain. It also noted that certain schools are not acknowledging funds already sent by NELFund.
Sawyerr confirmed that in some cases, institutions received student loan funds directly but failed to notify students or record the transactions correctly. “This creates unnecessary confusion and is a violation of the trust on which NELFund operates,” he said, adding that legal action could be taken against schools involved in such misconduct.
Issa-Onilu issued a stern warning to the institutions and banks involved, urging them to stop these alleged practices immediately. He also directed NOA’s state offices to gather more feedback from students nationwide to support possible federal sanctions.
President Bola Tinubu signed the student loan policy into law in June 2023 to provide interest-free loans to students. While the program was initially set to launch in October 2023, it was delayed and relaunched in April 2024. Applications opened in May 2024 for students in federal tertiary institutions.
Despite these efforts, some students have experienced delays or confusion regarding disbursed amounts, which sometimes don’t match their tuition fees. NELFund has previously warned that it would take legal steps against any institution that fails to properly communicate loan details to students.