How NELFUND Plans to Recover Student Loans After Graduation
The Managing Director of the Nigerian Education Loan Fund (NELFUND), Akintunde Sawyerr, yesterday said that two years after beneficiaries of the Fund complete their National Youth Service Corps (NYSC) scheme, they are expected to start paying back their debts
However, Sawyer noted that for those without jobs within that period, NELFUND will within its power, connect them through a portal to employment opportunities, explaining that 10 per cent will then be deducted by their employers to repay the debt.
“If a student or a loanee has graduated, two years after they complete their NYSC, there is some obligation for them to start paying the loan back if they have a job. It makes sense in the value chain that we should assist in that process of helping people get jobs.
We don’t create jobs. What we can do is connect people with jobs. So one of the things that we intend to do is to set up a portal, attract vacancies and jobs into that portal, connect them with students who have loans so that they get jobs and they can pay the loan back.
“It’s in their interest and the interest of NELFUND to make this connection. And it’s a very small investment for us to make, given the potential value that it brings back to the students,” Sawyerr, who spoke on Arise Television, said.
The MD also dismissed any practice of the ‘man know man’ syndrome, maintaining that no student needs any connection to benefit from the programme, bar the normal verification carried out in the process of application.
On the data so far, Sawyerr noted that 724,000 students had applied for the loan as of yesterday morning, while 449,000 beneficiaries have so far been recorded.
“A beneficiary is somebody whose fees have been paid and in some cases have had their fees and the upkeep provided to them. So 449,000 people are in that category. Talking further around the numbers, the 449,000 beneficiaries are from 218 institutions.
“Tertiary institutions at federal or state government level, N47 billion paid to those institutions on behalf of these 449,000. It’s impossible to apply twice. And finally, the upkeep, we have paid N38 billion, “ he stated.
In terms of anticipated defaulters, he stated that NELFUND has put systems in place to ensure that in the first place, it is giving loans to people that it can identify and trace, whether through the BVN requirement, through their bank accounts or other means.
“The President was very careful with this. He didn’t want students to be penalized for taking a loan to go and get an education. So the obligation to pay the loan back is on the employer. When an employer employs, they go to a database to identify whether the person they’re employing has a loan with the NELFUND or not.
“If they have a loan with the NELFUND, the employer is obliged to deduct 10 per cent with the permission of the consent of the employee. 10 per cent of those fees, of their salary or their wages, depending on whether they’re doing weekly work or monthly work, can then be remitted to the Nelfund account.
“But the obligation is on the employer, not on the student. Unless, of course, the student or the loanee, rather, is self-employed, in which case they have an obligation to pay that 10 per cent, he explained .
He stated that in cases where students pay without knowing that NELFUND has already sent money to the institutions, such monies will have to be refunded, explaining that a number of institutions were already responding.
The institutions have been making great strides to refund some of this money to students. Some are slower than others. It’s also important to recognise that there’s a cost to returning funds.
“So some of them have returned funds short of what was actually paid to them because there’s a charge. These are administrative issues. They’re not a big deal. They’re administrative issues which, over time, will be smoothed over.
NELFUND is working very closely with the institutions and with the students to smooth these over. These are things that we must experience. We must go through them. There are teething problems,” he added.
