By Adesina Wahab

A financial expert, Tunde Alao-Olaifa, has described Nigeria’s student loan scheme as a “financial time machine,” noting that the Nigerian Education Loan Fund has evolved into a ₦200 billion stimulus reshaping access to education and injecting liquidity into the economy.
Alao-Olaifa, who is the Group Chief Financial Officer and Head of Strategy/Principal Investment at Leadway Holdings Limited, said the core idea behind student loans is to enable young people “borrow from their future earnings to fund their present education.”
“The basic premise of a student loan is a beautiful piece of financial time travel. Right now, you are 19, you have no money, but in five years, you will be an engineer, an accountant, or perhaps a highly paid prompt engineer. You will have money then. So, you borrow some of your future money, pull it back to the present, pay your school fees, and then spend your future years paying back the past,” he said.
He explained that before the intervention of the Federal Government, most Nigerian students relied heavily on family support.
“Historically, this time machine was powered almost entirely by the ‘Bank of Mom, Dad, and the Benevolent Uncle in the Diaspora.’ But over the last few years, that bank hit its absolute credit limit,” he added.
According to him, the introduction of the student loan scheme under President Bola Tinubu marked a major shift in funding education.
“In what might be recorded as one of the most pragmatic and consequential policy bets of his administration, the President recognised that human capital cannot be funded by exhausted parents,” he stated.
Citing data from the scheme’s operations, Alao-Olaifa noted that NELFUND has witnessed exponential growth within a year.
“Between March 2025 and March 2026, the scale of this operation went from a modest pilot to a macroeconomic event,” he said.
“In early 2025, they had around 451,000 applicants and had disbursed roughly ₦45 billion. By March 2026, we are looking at 1.7 million applications, over 1.1 million actual beneficiaries, and a staggering ₦206.2 billion out the door,” he added.
He described the growth trajectory as unprecedented.
“That is almost a 4x jump in volume and a 4.5x jump in cash disbursed in a single year. It is the kind of hockey-stick growth chart that makes tech founders salivate and chief risk officers quietly update their resumes,” he said.
Alao-Olaifa commended the management of the fund, particularly its Managing Director, Akintunde Sawyerr, for what he termed efficient and transparent operations.
“What is genuinely shocking… is the quiet, boring competence of it all. Historically, a ₦200 billion government intervention is accompanied by crashing portals, ghost beneficiaries, and a Senate probe,” he noted.
“But under the leadership of Mr. Akintunde Sawyerr, NELFUND has operated without the usual theatre of scandals. They have built a model institution, treating a government mandate with the ruthless efficiency and transparency of a top-tier fintech,” he added.
The expert revealed that the fund has split disbursements between tuition payments and direct allowances to students.
“About ₦128.8 billion, which is roughly 65 per cent, has gone straight to institutions for tuition… while ₦77.4 billion, about 35 per cent, has been paid as upkeep allowances directly to students,” he said.
He described the upkeep payments as a strategic economic intervention.
“NELFUND isn’t just funding education; it is executing a highly targeted ₦77 billion liquidity injection directly into the pockets of Nigerian youth,” he said.
Alao-Olaifa argued that the scheme has unintentionally become one of the most effective economic stimulus tools in recent times.
“When a government wants to stimulate an economy, it usually does something boring… But by dropping billions directly into the accounts of undergraduates, the administration has essentially executed the most targeted, high-velocity stimulus package in recent Nigerian history,” he explained.
He added that students spend money quickly, thereby boosting local economies.
“When you give an undergraduate money, they do not buy Treasury Bills. They buy data, textbooks, pay rent, and patronise local businesses… from POS operators to food vendors,” he said.
He further noted that the scheme has eased financial pressure on families.
“The money a mother in Ibadan would have frantically scraped together for her son’s survival can now be redirected to her own business or basic household needs. It is a fundamental renegotiation of the social contract,” he stated.
On repayment concerns, Alao-Olaifa said inflation significantly reduces the real value of loans over time.
“If you lend a Nigerian student ₦1 million in 2025 and they begin paying it back in 2030, what is that ₦1 million actually worth? In a high-inflation environment, the answer is ‘considerably less,’” he said.
He described the loan scheme as more of a social investment than a commercial facility.
“NELFUND is not really a commercial loan book. It is an accepted structural subsidy… a government grant wearing a fake moustache so the Ministry of Finance feels better about the balance sheet,” he said.
“The goal isn’t to run a profitable hedge fund; the goal is human capital formation,” he added.
However, the expert raised concerns about loan recovery amid increasing migration of young Nigerians.
“There is one gaping structural loophole… the Japa wave. You fund a student’s education and immediately after graduation, they relocate abroad,” he said.
He warned that without proper mechanisms, the scheme could inadvertently subsidise foreign labour markets.
“If not addressed, the loan scheme becomes the most efficient taxpayer-funded talent-export subsidy in Africa,” he cautioned.
To address this, he proposed a structured diaspora repayment system.
“When a graduate requests their transcript for foreign studies, they should trigger a ‘Diaspora Restructuring’—a 24-month moratorium, followed by automated monthly deductions through global payment platforms,” he suggested.
He also recommended linking loan repayment to passport renewal.
“When they apply for passport renewal, the system should check their loan status. If there is a default, renewal is paused until arrears are cleared,” he said.
“At that point, the debt will look incredibly cheap to someone earning foreign currency. It simply becomes an administrative fee for maintaining global mobility,” he added.
Despite the risks, Alao-Olaifa described the initiative as one of the most impactful policy tools in recent years.
“Running a ₦200 billion uncollateralised loan book for teenagers is terrifying for any banker. But as a piece of national strategy, it is one of the most direct and impactful levers the government has pulled in years,” he said.
“It is messy, the inflation math is funny, but if executed properly, it is undeniably the best investment the country is making this decade,” he concluded.