NELFUND needs primary schools to reach its full potential, let me try to explain.
Every time NELFUND announces a new figure, someone in the comments says the same thing: “Abeg, it is a loan o. Nobody should be clapping.”
They have a point. A loan is not a gift, and nobody should dress it up as one. But I think the argument stops one step too early. The better question is not “Is it free?” It is “Will it work?” And whether NELFUND works depends on something that happens years before a student ever opens the NELFUND portal: what that student learned in primary and secondary school.
That is why a bill about nursery pupils, primary school desks and junior secondary teachers matters to a student loan scheme. The bill is the Compulsory, Free Universal Basic Education Act (Amendment) Bill, 2026, and it is waiting for the President’s signature.
First, what is even NELFUND? NELFUND, the Nigerian Education Loan Fund, was created under the Students Loans (Access to Higher Education) Act, passed in 2023 and revised in 2024. It pays a student’s fees straight to the institution and adds a monthly upkeep allowance for living costs.
The terms are softer than most loans you will find in Nigeria. It is interest-free, nothing is paid while you study or during NYSC. Repayment starts two years after NYSC and is capped at 10% of your gross monthly income. It also covers vocational training and skills, not only university degrees.
The scale is already big. By October 2026, NELFUND had paid out about ₦372.6 billion since its portal opened in May 2024, and had processed more than 1.65 million applications.
So, is it an achievement? Critics say no, because the money must come back. Supporters say yes, because before NELFUND, many bright students simply dropped out when fees became too heavy.
NELFUND is not the first government student loan scheme in Nigeria. Between 1972 and 2023, Nigeria tried (and repeatedly failed) to give students a functional loan system, mostly because the programs were broken from day one. The 1972 Nigerian Students Loans Board (NSLB) quickly turned into an awoof initiative. Without a national ID system to track borrowers after graduation, the government was basically doing giveaways. Unsurprisingly, less than 13% of the money was ever paid back, partly because graduates couldn't find jobs, and partly because most people assumed the "loan" was just a generous gift from Uncle Gowon. Trying to fix the mess, the government launched the Nigerian Education Bank (EDUBANK) in 1993, promising a shiny new revolving credit system. Instead, they forgot the most crucial ingredient: actually funding it. The bank sat practically empty and dormant for thirty years.
Whether you think NELFUND is an achievement or not, you are partly right, because it depends on the repayment. A loan scheme is an achievement only if it lasts, and Nigeria has a poor record here. Previous student loan schemes collapsed, mainly because money went out faster than it came back. The billions disbursed by NELFUND could face recovery problems if the repayment system is not strengthened before repayments begin. So the real test of NELFUND is not the day the money goes out. It is the day the money comes back.
Now here is why it is foolhardy. Loans are repaid from salaries. Salaries come from skills. Skills begin long before university.
Now look at what feeds the pipeline. UNICEF figures, widely reported in Nigerian media, put the number of out-of-school children at about 18.5 million, the highest in the world. Most of them are unlikely to ever reach the stage where NELFUND matters.
Then take the ones who stay. In the 2026 WASSCE, 1,950,726 candidates sat the exam. Only 1,200,514 of them, 61.54%, got five credits, including English and Mathematics, the usual minimum for university admission. That leaves about 750,000 candidates who missed that mark, and these are the ones who stayed long enough to write the exam.
A loan given to someone who finishes school with shaky foundations is a risky bet, for the student and for the fund. If that graduate struggles to find work, repayment struggles too. A loan to someone who cannot earn is not really a loan.
Enter the UBE Amendment Bill. The bill amends the 2004 law that governs free basic education. The House of Representatives passed it in May 2026, the Senate passed its own version in June 2026, and the harmonised version was sent to the President on 30 July 2026. In plain terms, it does five things:
One detail decides whether the extra money ever reaches a classroom. States must put up 50% of a project’s cost before they can collect their federal matching grant, and many have not. By March 2026, 21 states and the FCT had left about ₦97.9 billion in UBEC funds unaccessed. In August, UBEC said about ₦65 billion in counterpart funding was still unaccessed, and about ₦267 billion in earlier released funds had not been used.
The bill does not remove the 50% rule. What it adds is a consequence. A state that does not collect last year’s matching grant within 12 months forfeits it, and UBEC spends the money directly, half in that state and half in other states. UBEC also cannot release new grants until it is satisfied that earlier ones were used properly. So the money stops sitting idle, and children in slow states are not left with nothing.
Here is my opinion. I believe basic education should be compulsory and free, and I would go further than this bill, which stops at junior secondary school. Free education should run through senior secondary, so that every child leaves school with a full foundation.
I do not believe tertiary education should be subsidised at all. University is a choice, and where it is a choice, a loan is fair. But for it to be a real choice, secondary school graduates need other good options. Too many young people go to university because nothing else feels respectable. Nigerian career guidance has long offered three options: doctor, lawyer, engineer, or “what will I tell people at the wedding?”
Imagine a secondary school graduate who leaves with solid reading and maths, plus a skill employers will pay for. For that person, university becomes something you pick, not something you run to. Anyone who wants more can take a loan if they cannot afford it. NELFUND already points this way, since the law covers vocational and skills training too.
NELFUND matters for Nigeria’s credit culture and it is the part that excites me most. Nigeria has a thin credit culture. Many adults have no formal credit record, so getting a business loan or a mortgage is hard. NELFUND partnered with FirstCentral Credit Bureau in 2024 so that loans are reported, which means a graduate who repays on time can build a record that helps for the rest of their life. But a credit record is built on repayment, repayment on income, and income on skills. That is why the benefits can be eroded if we are careless. Three risks stand out:
1. Weak recovery. This is what sank the earlier schemes.
2. Pressure on students. In October, a college in Enugu reportedly made the loans compulsory, which caused outrage, and NELFUND had to say publicly that the loans are voluntary.
3. Graduates who cannot earn. Debt with no income helps nobody, and it can leave a bad first credit record for a young person.
The third risk is where the UBE Amendment Bill comes in. It will not fix everything, but it goes after the root: better foundations, more teachers trained, learning materials in classrooms, and children actually in school.
Fair questions about the bill
The bottom line is that, the bill is not a magic wand, and NELFUND is not a free lunch. But the two belong together. A student loan scheme is only as strong as the graduates it produces, and graduates are only as strong as the classrooms that raised them. If Nigeria wants loans that get repaid, credit records that mean something, and young people who choose university instead of fleeing to it, the fix starts in primary school. The Bill is on the President’s desk. The sooner it is signed, the sooner the 2027 budget can start doing that work.
