FG Uncovers Banks, Universities’ Collusion to Shortchange Student Loan Beneficiaries

The Federal Government of Nigeria has uncovered unethical practices involving certain universities and banks colluding to deprive students of their rightful benefits under the Federal Government Student Loan Fund.

This revelation follows an investigation by the National Orientation Agency (NOA), which raised serious concerns about the administration of the loan scheme.

In a post shared on its X handle, the Director-General of the NOA, Mallam Lanre Issa-Onilu, revealed findings from the agency’s Community Orientation and Mobilization Officers (COMO).

These findings suggest that some higher education institutions and banks have been engaging in actions that prevent students from accessing the full benefits of their approved and disbursed loans.

While the specific institutions and banks involved have not been named, the NOA stated: “Recent investigations into the disbursement of the Federal Government Student Loan Fund have uncovered several unethical practices by some institutions of higher learning.”

Issa-Onilu reported that some universities have been deliberately withholding important financial information regarding disbursed student loans, and in some instances, the funds were transferred directly into institutional accounts without notifying the students.

READ ALSO: NIMC highlights success of student loan, importance of digital infrastructure

Furthermore, there have been reports of universities continuing to require students to pay tuition fees, even though the funds from the loan had already been received on their behalf.

Issa-Onilu stressed, “The NOA’s feedback indicates that certain institutions, in collaboration with some banks, have been delaying payments to successful student applicants for personal financial gain. These actions are unethical and violate the core principles of NELFUND, which is responsible for managing the loan scheme.”

To address this, NOA has instructed its state directorates to collect further feedback from students across the country and pursue legal action against institutions found to be involved in these deceptive practices.

The federal government has also issued a strong warning to the involved banks and schools to cease their actions immediately.

Issa-Onilu also emphasized the need for transparency in the disbursement process, urging all institutions to uphold ethical standards and restore confidence in the student loan program.

The loan scheme, initially launched in June 2023 under President Bola Tinubu, aims to provide interest-free loans to assist Nigerian students.

Despite delays in the rollout, the pilot phase of the loan program began in May 2024, covering federal tertiary institutions. The government remains committed to ensuring that the funds reach students and enhance access to education for all Nigerians.