The Nigerian Education Loan Fund (NELFUND) has said it is not relying on proceeds of crime as a long-term source of funding for the student loan scheme, even as the fund currently spends about ?16 billion monthly on students’ upkeep allowances.
Managing Director of NELFUND, Mr Akintunde Sawyerr, who spoke, in Abuja, noted that the fund was exploring multiple sources of financing to ensure the sustainability of the programme.
Sawyerr said NELFUND had received about 1.8 million applications, processed approximately 1.5 million and provided value to about 850,000 beneficiaries, while the scheme had yet to begin recovering loans from beneficiaries.
‘It’s a loan scheme and it’s two years plus old. We’re not getting any recoveries of the loans yet.
‘But how do you keep it going? We have a bill every month, as of today, of about N16 billion for upkeep alone. How do you maintain that?’ he asked.
He explained that the Federal Government was considering different funding channels, including the deployment of legally recovered and unencumbered public funds to education.
His comments followed President Bola Tinubu’s recent directive that cleared and unencumbered funds recovered by the Economic and Financial Crimes Commission (EFCC), as well as funds from unclaimed dividends and dormant accounts, should be considered for transfer to NELFUND, subject to applicable laws.
Minister of Education, Dr Tunji Alausa, had said the directive was aimed at strengthening the financial sustainability of NELFUND as the student loan programme continues to expand.
According to Alausa, only recovered funds that are legally cleared and free from litigation or other encumbrances would be considered, while the Attorney-General of the Federation, alongside the Ministers of Finance and Education, would work out the modalities for implementation.
However, Sawyerr stressed that the government’s consideration of recovered assets should not be interpreted as an attempt to establish a plea-bargaining arrangement with individuals accused of financial crimes.
‘The President did not say, ‘Go and plea bargain or set up a plea bargain arrangement with those who have misappropriated Nigeria’s funds and then give it to NELFUND.’ He didn’t say that.
‘The issues of misappropriated funds and proceeds of crime are entirely separate-completely separate to NELFUND,’ he said.
Sawyerr said the government was, instead, examining how liquid assets legally recovered after the conclusion of corruption cases could be redirected towards Nigerians, who had suffered from the diversion of public resources.
He said young Nigerians seeking education could be regarded among the beneficiaries of such interventions.
The NELFUND boss, however, emphasised that proceeds of crime could not provide a sustainable long-term funding model for the student loan scheme.
‘We can’t possibly rely on proceeds of crime in the long term,’ Sawyerr said.
He explained that the law establishing NELFUND provides for other funding mechanisms, including charitable donations, investments and income-generating activities.
‘The law that set up NELFUND allows us to go out and seek charitable donations; it allows those who want to invest in NELFUND to invest, and it allows NELFUND itself to invest in elements that are going to bring a return and income,’ he said.
Sawyerr said what the government was currently pursuing should, therefore, be seen as a short-term intervention while the fund develops more sustainable sources of revenue.
He disclosed that NELFUND was already attracting interest from the private sector, with potential investors recognising the wider economic and social benefits of expanding access to higher education.
He said a sustainable student loan scheme could contribute to employment creation and help address some of the social challenges confronting the country, including crime, banditry and insurgency.
Sawyerr also dismissed allegations of financial misappropriation at NELFUND, insisting that there was no evidence to support such claims.
‘There is no evidence of any financial misappropriation by the NELFUND,’ he said.
He explained that institutional payments were made electronically and directly to beneficiary institutions, while upkeep allowances were transferred directly into students’ bank accounts.
Sawyerr said the application and disbursement system was designed to minimise human interference and ensure that beneficiaries were selected without discrimination based on gender, ethnicity or personal connections.
He said applicants were required to meet established conditions, including possession of a National Identification Number, Joint Admissions and Matriculation Board (JAMB) registration number, proof of admission and a bank account.
The NELFUND boss expressed confidence that any eventual deployment of recovered public funds to the scheme would be carried out in accordance with the law.
He said: ‘I’m not a lawyer, but I have every confidence that the President will follow the constitutional and legal provisions,’ adding, ‘there is absolutely no evidence today that the law is going to be sidestepped, that the National Assembly is going to be sidestepped.’
He added that, to his knowledge, no executive order had been issued to bypass existing legal procedures.
The development comes as NELFUND’s financial obligations continue to rise with the expansion of the student loan programme.
As of August 8, the Fund had disbursed more than ?322 billion in institutional fees and upkeep allowances to beneficiaries nationwide, according to the Federal Ministry of Education.
The Minister of Education had said the new funding arrangements, alongside NELFUND’s existing sources of revenue, would position the Fund for greater financial stability and enable it to meet its growing obligations.