Integrate NELFUND with NRS Income Data to Aid Student Loan Recovery — Think Tank Tells FG

By Jimoh Zahirat

Nigerian higher education policy think tank, The iRoad to Live Initiative, has urged the Federal Government to integrate the Nigeria Education Loan Fund (NELFUND) with Nigeria Revenue Service income data to strengthen student loan recovery.

The initiative made the recommendation in a policy brief released on Monday, September 7, 2026.

The brief, titled “Can NELFUND Sustain Itself? Financing Nigeria’s Student Loan Scheme,” advised that the ₦355.87 billion paid out by NELFUND to about 850,000 beneficiaries could be difficult to recover with the current repayment structure.

Think tank noted Nigeria has roughly 18 months to strengthen its loan recovery infrastructure before beneficiaries who complete the compulsory two-year post-National Youth Service Corps grace period start facing enforcement.

It however recommended integrating NELFUND with Nigeria Revenue Service income data to enable the government to track and recover loans from self-employed graduates and other borrowers outside formal employers payroll systems.

“The central recommendation is straightforward: Use the roughly 18 months before the first cohort’s enforcement window opens to integrate NELFUND with Nigeria Revenue Service income data, extending recovery capacity to self-employed graduates rather than relying on employer withholding alone,” Think tank said.

Think tank warned that without such reforms, the student loan scheme could face the same sustainability problems that undermined Nigeria’s three previous student loan attempts.

“Nigeria has tried student loans three times before. Each one collapsed because loans went out faster than the government could ever recover them,” it said.

Think tank asserted that the current repayment framework guessed the availability of formal payroll employment which it described as a major weakness given Nigeria’s high level of informality.

It noted that employer withholding under Section 28(4) of the Students Loans (Access to Higher Education) Act, 2024, was not able to capture graduates who are self- employed, under employed or working outside the formal sector.

The initiative further cited Kenya’s experience, to buttress its recommendations, stating that its Higher Education Loans Board had integrated its recovery system with the Kenya Revenue Authority and credit bureaus.

Adding that despite this, 32.5 per cent of its loan portfolio was reportedly in default as of June 2025.

It noted that the Kenyan experience showed that even tax-authority integration could not completely eliminate loan recovery challenges in economies with widespread informal employment.

“NELFUND sits closer to grant-like system than to the tax integrated models that have achieved the highest recovery rates globally,” the brief stated.

It also stated that the future of the student loan scheme would only be determined by steps taken before repayment starts, rather than by the amount already disbursed.

“Whether Nigeria breaks its decades-long pattern of failed student loan schemes will be decided by choices made now, not by the scale of what has already been disbursed,” it noted.