FG seeks new financing streams for NELFUND as demand for tertiary education funding grows
ABUJA — President Bola Ahmed Tinubu’s administration has approved a new financing mechanism that will channel funds recovered through financial-crime investigations, together with certain unclaimed financial assets, into Nigeria’s student-loan system.
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The move is designed to strengthen the financial capacity of the Nigerian Education Loan Fund (NELFUND) and expand access to higher education for Nigerian students.
Education Minister Tunji Alausa disclosed the decision following a Federal Executive Council meeting, saying the President had directed that funds recovered by the Economic and Financial Crimes Commission be transferred to NELFUND, subject to applicable legal processes.
Importantly, funds or assets tied up in ongoing court proceedings are not to be transferred until those cases are concluded.
Why the decision matters
Nigeria’s student-loan experiment is unfolding against a backdrop of rising education costs and intense pressure on household incomes.
For many families, university fees are only one component of the financial burden. Accommodation, transportation, textbooks, food, technology and other expenses can make tertiary education increasingly difficult to sustain.
NELFUND was established to provide students with financing that can help reduce that burden.
The government’s latest decision effectively seeks to create additional and potentially recurring sources of funding for the programme rather than relying entirely on annual budgetary allocations.
What about unclaimed dividends?
The decision also touches a sensitive area of Nigeria’s financial system: money belonging to investors that remains unclaimed.
The Securities and Exchange Commission says eligible unclaimed dividends are transferred into the Unclaimed Funds Trust Fund (UFTF) after the statutory period, while shareholders retain the right to claim their money under the applicable framework.
This distinction is critical. The funds are not simply “free government money”. They remain subject to legal and custodial arrangements designed to protect the interests of their rightful owners.
Recent SEC figures have put Nigeria’s unclaimed dividend problem at hundreds of billions of naira, prompting renewed efforts to reunite investors and beneficiaries with their assets.
The accountability question
The new policy will therefore face two simultaneous tests. The first is whether it can give NELFUND enough resources to meet growing demand.
The second is whether government can maintain public confidence that recovered funds and other custodial assets are being transferred and spent transparently and within the law.
That question is particularly important because government has previously borrowed against funds held under the Unclaimed Funds Trust Fund. DMO data showed a ₦100 billion UFTF-linked government security at the end of 2025.
The student-loan initiative could nevertheless represent an important shift: using resources recovered from financial crimes to expand educational opportunity.
For a country battling youth unemployment and skills shortages, the long-term return could be significant—if the money is protected from leakages and actually reaches students.
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