NELFUND Student Loans: Who Qualifies and What the 10% Repayment Deduction Looks Like in 2026

Last Updated: August 2026

The Nigerian Education Loan Fund, commonly called NELFUND, was created to reduce the financial barrier to higher education in Nigeria. The scheme can cover approved institutional charges and, where applicable, student upkeep or maintenance support.

The legal framework changed significantly when the Students Loans (Access to Higher Education) (Repeal and Re-Enactment) Act, 2024 replaced the 2023 law. The 2024 Act removed the former ₦500,000 annual income test, expanded the categories of educational costs covered, and introduced repayment based on a percentage of the beneficiary’s gross income.

For an employed graduate, the repayment figure can be calculated simply:

[ \text{Monthly repayment} = 10% \times \text{monthly gross income} ]

For example, a graduate earning ₦250,000 gross per month would have a potential monthly deduction of ₦25,000 once repayment becomes due.

What NELFUND Covers

NELFUND is not a conventional commercial bank loan. It is a government-backed education financing scheme administered by the Nigerian Education Loan Fund.

Under the 2024 Act, the Fund’s purpose includes providing loans to qualified Nigerians for:

• Tuition and approved institutional fees.
• Other charges payable to an approved tertiary institution.
• Maintenance or upkeep allowance payable to the student.
• Training at approved vocational and skills-acquisition institutions.

NELFUND’s official public information describes the initiative as providing interest-free loans for tuition fees. However, the 2024 Act refers to repayment of the loan and “all charges” without setting out a specific commercial interest rate. This means applicants should read the loan agreement and current NELFUND terms displayed on the application portal rather than relying only on descriptions of the scheme.

The amount approved for an individual student is not automatically the same as the amount requested. NELFUND verifies the student’s records, eligible institutional charges and the applicable upkeep amount before disbursement.

Institutional charges are not the same as every school payment

A 2025 Federal Ministry of Education committee report noted that NELFUND intended to cover 100% of approved institutional charges, while excluding certain optional or non-academic charges. Its proposed harmonised fee structure separates academic and support charges from items such as hostel fees, acceptance fees, late-registration charges and some student-related payments.

The exact amount payable therefore depends on:

• The institution and programme.
• Whether the student is a fresh or returning student.
• The category of charge.
• NELFUND’s approved guidelines for that application period.
• The funds available to the scheme.

Who Qualifies for NELFUND?

There are two levels to understand: the broad eligibility created by the 2024 Act and the operational requirements contained in NELFUND’s applicant guidelines.

1. Nigerian citizenship

The applicant has to be a Nigerian citizen within the meaning of the Constitution of the Federal Republic of Nigeria 1999, as amended.

NELFUND’s guidelines identify the National Identification Number, or NIN, and Bank Verification Number, or BVN, as identity-verification information. The guidelines state that BVN is required for applicants aged 18 years and above.

A mismatch between the applicant’s name on the NIN, BVN, JAMB record and school database can delay verification. The application information should therefore match the records held by the relevant institutions.

2. Admission or enrolment in an eligible institution

The 2024 Act covers students admitted into institutions established by the Federal Government or a state government, including:

• Universities.
• Polytechnics.
• Colleges of education.
• Approved vocational and skills-acquisition institutions.

For fresh-entry applicants, the NELFUND guidelines require valid admission through the Joint Admissions and Matriculation Board, commonly known as JAMB. Direct-entry applicants also require valid JAMB admission evidence. Full-time undergraduate students are required to provide their matriculation number.

This distinction matters because the law is broader than a simple “university loan” description. It recognises several types of higher and vocational education, but the current application portal and administrative guidelines determine which programmes and institutions are active for a particular application window.

3. Academic and identity information

The guidelines list information such as:

• JAMB registration number.
• NIN.
• BVN for applicants aged 18 and above.
• Matriculation number for eligible continuing students.
• Phone number and email address.
• Home address.
• Date of birth and other personal details.
• Passport photograph.

The institution also has a role in confirming that the applicant is genuinely admitted or enrolled. An application may not progress where the school has not uploaded or verified the student’s information on the relevant NELFUND platform.

4. No disqualifying government loan or scholarship

The NELFUND guidelines identify several disqualifying conditions. An applicant can be excluded where they:

• Defaulted on a previous education loan from the Federal Government, a state government or one of their agencies.
• Are already receiving another education loan or scholarship from the Federal Government, a state government or one of their agencies.
• Were dismissed for examination malpractice or found guilty of plagiarism, cultism or violence.
• Submitted fraudulent documents.
• Were convicted of fraud, forgery, drug offences, felony or another offence involving dishonesty.

The 2024 Act removed the previous rule that could disqualify an applicant because a parent had defaulted on a loan. A parent’s separate borrowing history is therefore different from the applicant’s own disqualifying record under the current framework.

Does the ₦500,000 Income Limit Still Apply?

The ₦500,000 annual personal or family income limit belonged to the earlier 2023 framework. The 2024 Act removed that income threshold. A student is not automatically excluded from NELFUND merely because the student’s household earns more than ₦500,000 per year.

This does not mean every applicant receives funding automatically. Eligibility remains subject to the Act, NELFUND guidelines, institutional verification, accurate identity records and the availability of funds.

The practical distinction is:

When Does Repayment Begin?

The repayment rule has two related parts.

First, the beneficiary becomes liable to begin repayment after graduating and securing employment in any capacity. Second, the Fund cannot initiate enforcement action until two years after the beneficiary completes the National Youth Service Corps programme or receives an exemption from NYSC.

These provisions appear in the repayment section of the 2024 Act, generally cited as Section 28(1)–(4). Section 28(4) provides that repayment is through monthly deductions not exceeding 10% of the beneficiary’s gross income until the loan and applicable charges are repaid.

NELFUND’s online terms also state that a beneficiary who participates in NYSC begins repayment two years after completing the programme. The terms require the beneficiary to update employment information and consent to deductions from source.

Example of the repayment timeline

Assume:

• Graduation: November 2026.
• NYSC completion: November 2027.
• Two-year post-NYSC period: ends in November 2029.
• Employment begins: March 2028.

The beneficiary may have employment before the two-year period ends, but the statutory enforcement restriction remains relevant. The exact collection process and repayment commencement date should be checked against the beneficiary’s executed loan agreement and NELFUND instructions.

An unemployed beneficiary can request an extension based on lack of employment or income. The 2024 Act also allows the Fund to provide exemptions in specified circumstances, including death, hardship, equity or situations where recovery is impossible or uneconomic. These provisions do not create an automatic exemption for every unemployed graduate; they operate through the Fund’s applicable process.

How the 10% Deduction Works

The legal ceiling is 10% of monthly gross income. “Gross income” is the amount earned before deductions such as PAYE tax, pension contributions, NHF contributions, cooperative deductions and other payroll items.

For a salaried employee, the basic calculation is:

[ \text{NELFUND deduction} = \text{gross monthly salary} \times 10% ]

These figures show the NELFUND deduction alone. They are not the employee’s final take-home pay because Nigerian payroll can also include PAYE, pension, National Housing Fund, health insurance, union dues, cooperative deductions and other authorised items.

Real salary example: ₦250,000 gross monthly pay

Consider a beneficiary employed by a Nigerian company on a monthly gross salary of ₦250,000.

1. Monthly gross income: ₦250,000.
2. Repayment percentage: 10%.
3. Calculation: ₦250,000 × 10%.
4. Monthly NELFUND deduction: ₦25,000.
5. Annual repayment at the same salary: ₦25,000 × 12 = ₦300,000.

If the salary later rises to ₦320,000, the monthly figure becomes:

[ ₦320,000 \times 10% = ₦32,000 ]

If the salary falls to ₦180,000, the calculation becomes:

[ ₦180,000 \times 10% = ₦18,000 ]

The amount is therefore income-linked rather than a fixed monthly instalment. A beneficiary with a ₦250,000 salary does not continue paying ₦25,000 if the gross salary changes.

Gross salary versus net salary

Suppose the employee’s gross salary is ₦250,000 but the amount entering the bank account after payroll deductions is ₦214,000. The 10% calculation is not automatically based on ₦214,000. Section 28(4) refers to gross income, while payroll deductions are calculated separately.

The employee’s payslip can therefore show:

The NELFUND deduction should not be confused with PAYE income tax. PAYE is a tax withheld under Nigeria’s personal income tax system, while NELFUND repayment is a loan recovery deduction.

What Happens If You Are Self-Employed?

The repayment structure also recognises self-employed beneficiaries.

The Federal Ministry of Education’s NELFUND report describes the self-employed repayment option as 10% of monthly profit. It also states that a self-employed beneficiary has to provide business information within 60 days of assuming that status, including the business name, address, registration documents where applicable, banking details, partners, directors and shareholders.

A simplified example:

• Monthly business revenue: ₦600,000.
• Allowable business expenses used to determine monthly profit: ₦380,000.
• Monthly profit: ₦220,000.
• NELFUND repayment at 10%: ₦22,000.

[ ₦220,000 \times 10% = ₦22,000 ]

Revenue is not the same as profit. A trader receiving ₦600,000 into a business account cannot automatically treat the entire ₦600,000 as profit if legitimate business costs reduce the actual profit. The beneficiary remains responsible for accurate records and compliance with the information requested by NELFUND.

Self-employed individuals with irregular earnings may have different monthly profits. A month with ₦100,000 profit produces a different 10% calculation from a month with ₦300,000 profit.

Employer Responsibilities

The 2024 Act places responsibilities on employers involved in the employment of beneficiaries.

An employer is required to obtain information from the Fund about the student-loan status of a prospective employee. Where the employer is informed that the employee is a beneficiary with an unpaid loan, the employer is required to provide information requested by the Fund to facilitate collection.

The law also provides sanctions for certain employer contraventions. PLAC’s analysis of the Act reports a fine of not less than ₦2,000,000, imprisonment of not less than one year, or both, for an employer or responsible director or officer found guilty under the relevant provision.

For HR and payroll teams, the practical records may include:

• Employee identity and contact details.
• NELFUND status or notification.
• Gross salary used for calculation.
• Monthly deduction amount.
• Date and amount remitted.
• Evidence of remittance to the Fund.
• Updated employment information where an employee changes jobs.

The payroll department should distinguish NELFUND deductions from tax, pension and other statutory payroll items so that each remittance is properly classified.

How to Estimate Your Deduction

You can estimate a monthly repayment in three steps:

1. Confirm the gross monthly salary, not the net amount received.
2. Multiply the gross salary by 0.10.
3. Compare the result with the outstanding loan balance and the applicable NELFUND repayment instructions.

For a faster calculation, use ToolBase’s Nigeria student loan repayment estimator. You can also compare the deduction with your estimated payroll outcome using the Nigeria salary calculator.

The estimator provides a projection, not an official repayment notice. The final amount depends on the beneficiary’s loan agreement, verified income, NELFUND instructions and any applicable charges.

Common Misunderstandings

“Anyone enrolled in school automatically qualifies”

Enrollment alone is not enough. Citizenship, eligible admission or enrolment, NIN, BVN where applicable, JAMB or matriculation information, institutional verification and disqualification rules all matter.

“The old ₦500,000 family-income rule still applies”

The 2024 law removed the former income threshold. Current approval remains subject to the active NELFUND guidelines and funds available.

“10% means 10% of take-home pay”

The Act refers to gross income. A payslip deduction can reduce take-home pay, but the calculation begins with gross earnings.

“Repayment starts immediately after graduation”

The Act connects repayment with employment and limits enforcement action until two years after NYSC completion or exemption. The beneficiary’s signed terms and current NELFUND instructions remain important.

“Private university students are always covered”

The Act refers to institutions established by the Federal or state government and certain federally licensed vocational or skills-acquisition institutions. Eligibility for a particular institution depends on whether it falls within the approved categories and is active on the NELFUND verification system.

Conclusion

NELFUND eligibility in 2026 is based on Nigerian citizenship, qualifying admission or enrolment, identity verification, institutional confirmation and the absence of specified disqualifying conditions. The former ₦500,000 annual income limit was removed by the 2024 framework, while repayment is linked to employment and capped at 10% of gross income under Section 28 of the Students Loans (Access to Higher Education) Act, 2024.

A salary of ₦250,000 gross per month produces an estimated monthly repayment of ₦25,000 at the 10% rate. For self-employed beneficiaries, the corresponding calculation is based on monthly profit rather than total business revenue.

This article is for educational purposes only and does not constitute professional advice. Consult a qualified professional for your specific situation.