NELFUND debunks claim students face life imprisonment over unpaid loans

The Nigerian Education Loan Fund (NELFUND) has debunked a viral claim stating that students who fail to repay their education loans after graduation could face life imprisonment. This was announced on the Fund's official X account on Sunday, with the organization describing the claim as "fake news". This clarification comes as misinformation continues to circulate about the Federal Government's student loan program, specifically about disbursement, repayment, and penalties for beneficiaries.

The dispute arose after a publication circulated online with a purported newspaper front page, alleging severe penalties for non-repayment of education loans. However, NELFUND did not announce any new criminal penalties for beneficiaries who fail to repay their student loans.

According to NELFUND's repayment framework, students are not expected to begin repaying their loans immediately after graduation. Instead, the two-year grace period is designed to provide graduates with the time needed to secure employment and achieve financial stability. This contradicts the suggestion made by the viral publication that graduates would face life imprisonment for non-payment.

The Nigerian Education Loan Fund was established under the revised Student Loan Act in April 2024, superseding the 2023 legislation. This new framework provides government-backed loans to students in higher education and vocational training institutions. Since its launch, the program has seen significant growth, with NELFUND disbursing a total of N355.87 billion to 1.16 million beneficiaries across 270 institutions. This represents an increase from the N206.29 billion disbursed to 1.16 million beneficiaries in March 2026.

Despite the controversy, the Nigerian government is actively working to enhance the quality and competitiveness of the country's tertiary education system. The Federal Government plans to revamp the ranking system for universities and other higher education institutions, with the aim of creating a benchmark that could serve as a model for higher education institutions across Africa.