NELFUND debunks life imprisonment claims and faces loan recovery warnings

The Nigerian Education Loan Fund (NELFUND) has dismissed viral claims suggesting that students who default on their loans face life imprisonment. The Fund clarified that the circulating images, which purported to show President Bola Tinubu announcing such penalties, are fake news and doctored reports.

Under the current legal framework, repayment obligations for NELFUND beneficiaries begin two years after the completion of the National Youth Service Corps (NYSC) programme or an exemption from it, provided the individual is gainfully employed. For those in formal employment, monthly deductions are capped at 10 per cent of gross income.

Separately, the think tank iRead To Live Initiative has warned that the approximately N355.87 billion disbursed to roughly 850,000 beneficiaries faces significant recovery risks. The group recommended that the Federal Government integrate NELFUND with Nigeria Revenue Service data to better track self-employed graduates and those in the informal economy, noting that the current reliance on employer-based deductions may be insufficient for long-term sustainability.