President Bola Tinubu’s student loan scheme is being financed with money diverted from the Tertiary Education Trust Fund and cash recovered by the Economic and Financial Crimes Commission, according to official figures released by the Nigerian Education Loan Fund.
The Managing Director of NELFUND, Akintunde Sawyerr, disclosed the funding breakdown when he appeared before the House of Representatives Committee overseeing the agency in May 2025. He said the total amount received by NELFUND was N203 billion, sourced from N10 billion appropriated by the Office of the Accountant General, N143 billion released by TETFund following a presidential directive, and N50 billion from recovered proceeds of crimes provided by the EFCC.
The government has continued to expand this funding model. In August 2026, President Tinubu directed that all legally cleared and unencumbered liquid funds recovered by the EFCC be channelled into NELFUND to strengthen student financing and expand access to tertiary education. The directive also covered unclaimed dividends from the Capital Market Trust Fund and dormant funds from the Dormant Account Trust Fund, subject to existing laws. Minister of Education Tunji Alausa said the new arrangement would complement NELFUND’s existing sources of financing, including the 15 per cent allocation from the TETFund development levy.
The shift in TETFund’s role has been dramatic. TETFund was established in 2011 to monitor the disbursement of the education tax to public tertiary institutions, providing supplementary support for infrastructure, staff training and research. Its main revenue source is the three per cent education tax paid from the assessable profits of companies registered in Nigeria. In September 2024, the Federal Government announced that 30 per cent of TETFund’s annual revenue would be funnelled into the student loan scheme. Presidential spokesman Bayo Onanuga said the funds previously used for infrastructure would now support student loans. By October 2026, TETFund had released more than N300 billion to NELFUND.
The Academic Staff Union of Universities has repeatedly opposed the diversion of TETFund resources. In January 2025, ASUU condemned the planned diversion of TETFund resources to NELFUND, warning that replacing TETFund with a student loan scheme would promote a culture of debt, discourage access to higher education for low-income families and deepen socioeconomic inequalities. In December 2024, ASUU warned that suffocating TETFund’s funding source to support NELFUND would destroy public education in the country. The union said NELFUND cannot be a replacement for TETFund.
The government has defended the arrangement, arguing that it is crucial for enhancing student access to tertiary education. Alausa said the administration was committed to ensuring that financial difficulties did not prevent qualified young Nigerians from obtaining higher education. He described the new funding direction as an opportunity to convert resources recovered on behalf of Nigerians into educational opportunities for young people.
More than 1.2 million students are currently benefiting from NELFUND, and the Fund had disbursed more than N322 billion in institutional fees and upkeep allowances to beneficiaries as of August 2026. The government says the expanded funding base will enable NELFUND to meet its growing obligations. Critics, however, point out that the scheme is not funded by new revenue but by redirecting money that was already meant for the improvement of tertiary institutions and by using recovered loot to finance a loan programme that students will eventually have to repay.
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