By Babatunde Emmanuel

Following the introduction of the Universal Basic Education (UBE) programme in 1999 by the federal government and other successive educational initiatives for all levels of education in Nigeria till date as a form of reform and provision of access to quality education in Nigeria, it could still be observed that Nigeria still has a long-standing education funding challenge.

According to UNICEF, despite the assurance of the 2004 UBE Act, which guarantees the right of every child to compulsory free basic education, 10.2 million children of primary school age and 8.1 million children of junior secondary age were out of school in 2018. Also, a large percentage of Nigerian students are seen not to be at the top of their potentials as a consequence of poor funding of Nigeria’s education sector.

According to UNICEF, Nigeria’s total government education expenditure as a share of total government spending has been on a downward trend, declining from 9.3 percent in 2015 to 3.6 percent in 2023. Also, Nigeria has committed to spend 4% of its gross domestic product (GDP) on education by 2025 and maintain this through 2030.

On Wednesday, April 3, 2024, President Bola Tinubu signed into law the Students Loans (Access to Higher Education) (Repeal and Re-enactment) Bill 2024. The NELFUND body was established as a result, and the Student Loan Act 2023 was repealed due to challenges bothering its governance and management, purpose of loans, eligibility criteria for applicants, method of application, repayment provision and loan recovery. The scheme aimed at making loans available to students for their education pursuit with ease, and it was focused mainly on education for tertiary institution students. This article therefore explores the essence of NELFUND and how it’s either affecting or developing the average Nigerian student.

Education is a connection between the government and the public, and both entities have roles to play in responding to the accessibility of quality education.

Section 18(1) of the 1999 Constitution of the Federal Republic of Nigeria states that the government shall direct its policy towards ensuring that there are equal and adequate educational opportunities at all levels. Furthermore, Section 18(3) says the government shall strive to eradicate illiteracy and, as and when practicable, provide free, compulsory and universal primary education, free secondary education, free university education and free adult literacy programmes.

Also, Section 2(1) of the Universal Basic Education Act 2004 states that every government in Nigeria shall provide free, compulsory and universal basic education for every child of primary and junior secondary school age. The constitution serves as the basic definition of government’s responsibility and expected attitude towards empowering the public through education.

Education cannot and shouldn’t be treated exclusively as an individual’s responsibility. A highly educated population impacts the community positively by thinking creatively, creating job opportunities and contributing to a reduced crime rate as an educated population. Education is a public good and benefits society beyond the individual graduate. Every educated member of a country raises the banners high and lifts up the standard of every sector they find themselves in and hence raises the country’s standard because the government’s policies alone cannot be used to measure the standard of a country. The public’s responsiveness and contribution also have a great impact in raising the country’s standard. This is the reason why the government’s role in ensuring accessible education is readily available to the public is very important, and hence education is a connection between the government and the public.

An alternate financial system provides an additional source of funding to complement existing financing arrangements, while a substitute, on the other hand, replaces a previously established funding system. Applied to the Nigerian Education Loan Fund (NELFUND), student loans can provide additional support to students who can’t afford the cost of higher education. Student loans can take away certain barriers, serve as a basis for no student not to be educated and improve students’ access to education. However, the introduction of student loans raises a question: being a loan, should students increasingly become responsible for financing their education through repayable loans, and should the government’s previous systems of fulfilling its educational responsibility of providing access to quality education be replaced by repayable loans, leaving the government arms folded towards its responsibility, or should these loans operate alongside sustained public investment in higher education?

The United Nations Educational, Scientific and Cultural Organization (UNESCO) established that education is a transformative investment which contributes to poverty reduction, economic growth, improved healthcare, gender equality, peace and sustainable development.

According to UNESCO, education is the smartest long-term investment a country can make. Each additional year of schooling boosts annual earnings by 9 to 10%, while every dollar invested in education can yield up to 15 dollars in economic returns. Also, UNESCO added that education has contributed to reducing extreme poverty by 40%, and achieving full secondary education for all by 2030 could prevent over 200,000 disaster-related deaths in the next two decades.

Recognising this importance, the international communities’ committee in 2015, through the Incheon Declaration, allocated at least 4 to 6% of GDP and/or up to 20% of public expenditure to education.

Also, the UNESCO Global Education Monitoring Reports on Nigeria’s educational finance identify different financing systems, including grants and scholarships for vulnerable groups, Tertiary Education Trust Funds (TETFUND), and federal and state funding of federal and state institutions. Therefore, NELFUND enters into an existing financing structure, and it is meant to complement those systems, not replace them.

One noticeable way this disparity played out was through an occurrence at Enugu College of Education (Technical), in which the university’s management issued a memorandum on October 6, 2026, directing all fresh and returning students in its NCE and degree programmes to apply for NELFUND. This became more controversial when reports indicated that students could be denied examination clearance without evidence of NELFUND registration, which was later disregarded when NELFUND intervened and clarified that accessing the loan was meant to be voluntary and not forced. This incident exposed the growing psychology of educational management in regards to NELFUND and students. If NELFUND is intended to complement public investment in higher education, what happens when an institution begins requiring students to access it irrespective of their financial status?

One of the major boasting points of NELFUND is that the loan is interest-free. However, it is important to note that an interest-free loan is not the same as debt-free. NELFUND brings instant relief to students, but we must consider the long-term effects it creates on students. Also, considering the increase in the unemployment rate in Nigeria and the poor economy, NELFUND repayment becomes a burden. Nigerian graduate unemployment deserves attention and intervention if a student loan scheme is to be considered sustainable. Considering these great factors, there arises an important question: is NELFUND therefore a relief or a burden?

Nigeria’s education system needs a better and sustainable financing system. Coupled with student loan schemes, more opportunities and a stronger system should be built around Nigeria’s educational sector. Beyond loans, there are other applicable initiatives that the government can buy into to ensure a sustainable educational system.

Recall that UNESCO recommends that the government should allocate at least 4–6% of GDP to education and/or 15–20% of total expenditure to education. Meanwhile, Dr Tunji Alausa, the Minister for Education, raised a striking concern about Nigeria’s tertiary institution underfunding crisis.

On June 12, 2026, it was reported that Dr Tunji Alausa raised his concerns in a paper titled “65 Years of Excellence: Obafemi Awolowo University and the Future of Higher Education in Nigeria”. According to the report, Dr Tunji Alausa established that federal allocations to education have historically hovered between 5% and 8% of the national budget, which is far below UNESCO’s recommended 15–20%.

He also noted that the widening gap between the demand for university education and the available admission spaces posed a serious challenge to the educational sector, as Nigeria has over 200 universities, but our carrying capacity is far below demand. According to him, over 2 million qualified candidates apply for less than 500,000 university spaces annually.

Therefore, looking critically at these rising concerns, a loan scheme alone cannot necessarily be seen as funding Nigeria’s educational sector, especially for the fact that it is even a loan. Better systems should be organised, older systems like TETFUND should be strengthened, and critical attention should be given to Nigeria’s education in order to meet the rising demands in our educational sector and avert the looming disaster which is building up in our nation.