NELFUND and rising fees in universities

By Oluwatobi Olanrewaju

The astronomical increase in tuition and ancillary fees in federal universities is disturbing. In fact, tuition and ancillary fees have reportedly been increased by over 200 percent in some universities, with administrators of these institutions and government officials asking the stranded students to apply to NELFUND for financial assistance.

This growing dependence on the Nigerian Education Loan Fund (NELFUND) as a blanket justification for the rapid commercialization of public education is creating a dangerous precedent and economic bubble. While the loan scheme was designed as a safety net for the indigent students, it is being rapidly turned into a primary funding model. This shift effectively moves the burden of funding public universities from the government’s purse to the future earnings of Nigeria’s youth, while the quality of education stagnates and the lecturers who keep the system running remain on the poverty line.

Over the last 18 months, federal universities have aggressively revised their fee structures, dismantling the long-held notion of tuition-free education in federal universities. While technically maintaining that “tuition” is free, institutions have introduced or inflated “consolidated charges,” “utility levies,” and “studio/laboratory fees” to unprecedented levels.

For returning students, who often face the toughest financial squeeze having based their budgets on entry-level costs, the reprieve of the past has evaporated. At the University of Lagos (UNILAG), the fees have risen astronomically.

“Last session, as a language student, I paid about N190,000, which was already a struggle for my parents,” shared a 300-level student who pleaded for anonymity. “This year, with the new ‘consolidated’ charges, I am looking at a bill closing in on N250,000. The portal maintenance fee alone is N15,000. What exactly are we maintaining?”

This aligns with recent reports indicating new levies that have effectively pushed the total package for professional courses toward the quarter-million Naira mark. The trend is not limited to UNILAG. At the University of Ibadan (UI), returning students are grappling with similar increases, while at Obafemi Awolowo University (OAU), fresh students in the College of Health Sciences now face bills upwards of N290,000, a sharp departure from the subsidized rates of previous years.

The justification from vice-chancellors is uniform: the “withdrawal of government subsidies” and the skyrocketing cost of energy and administration. However, the timing of these hikes suggests a strategic calculation. Critics argue that university governing councils have been emboldened by the existence of NELFUND. They operate under the assumption that the loan scheme grants them carte blanche to raise revenue internally without triggering the mass dropouts that would typically follow such hikes.

This “moral hazard” was confirmed by a recent internal risk assessment report from NELFUND itself. The document revealed that the fund is alarmed by the “astronomical increase in tuition fees,” with some institutions raising charges by as much as 521 per cent. The report explicitly noted that many administrators now “justify fee hikes by referring students to the loan programme,” treating the fund not as an aid for the poor, but as a guaranteed revenue stream for the institution.

For students, the reality is far grimmer than the policy papers suggest. While NELFUND has successfully disbursed over N116 billion to students as of November 2025, the narrative that “loans are the answer” glosses over deep systemic cracks.

First is the psychological burden of debt in an economy with double-digit inflation and high unemployment. “It feels like a trap,” said a 300-level student at a federal university in the North Central region. “They increased our fees by 300 percent and then told us to sign our future away to pay it. But what guarantee do I have of a job to repay this loan?”

This fear is well-founded. With Nigeria’s unemployment rate remaining stubbornly high, the model of funding education through debt assumes a labor market that simply does not exist. Without economic reforms to create jobs, the government risks breeding a generation of debtors before they even enter the workforce.

Second is the operational lag. Students have reported significant delays in the disbursement of the monthly “upkeep allowance,” a stipend meant to cover feeding and basic survival. In many cases, verification bottlenecks leave students stranded for months, forcing them to skip classes to hustle for their daily bread, thereby defeating the purpose of the loan which is to allow them focus on their studies.

Perhaps the most damning indictment of this new “user-pays” model is that the massive influx of revenue from higher fees and student loans has not translated into better welfare for the lecturers who keep the system running.

Despite the fee hikes, members of the Academic Staff Union of Universities (ASUU) remain some of the poorest paid academics on the continent. A professor at a Nigerian federal university still earns significantly less than their counterparts in neighboring countries like Ghana or the Benin Republic, a disparity that is fueling an unprecedented “brain drain” or Japa wave within the academia.

“It is wicked and inhuman to leave university lecturers on the same salary regime for more than 15 years,” stated Prof. Monday Lewis Igbafen, the ASUU Benin Zonal Coordinator, during a press briefing earlier this week.

The disconnect is glaring and provocative. Students are paying significantly more, the government is disbursing billions in loans to cover these costs, yet the lecturers are on the verge of shutting down the system due to pauperization.

The core of the conflict lies in the 2009 FG/ASUU agreement, which the union says is practically obsolete due to the depreciation of the Naira. Lecturers argue that the “paucity of funds”, an excuse used by the government to justify the poor funding of varsities, is no longer tenable, especially when statutory allocations to states have increased, and universities are generating billions in Internally Generated Revenue (IGR) from the hiked fees.

However, because the university teachers are paid via the Integrated Payroll and Personnel Information System (IPPIS) controlled by the Federal Government, the increased IGR from tuition fees does not automatically trickle down to salaries. Instead, it often goes into “administrative costs,” leaving the lecturers with the same stagnant wages while their workload increases due to the shortage of staff.

This combustible mix of grievances has brought the system to a breaking point. Just days ago, ASUU issued a fresh ultimatum, declaring it is “fully prepared” to commence an indefinite nationwide strike beginning Friday, November 21, 2025, if the Federal Government does not conclude the renegotiation of the 2009 agreement.

If this strike holds, it will expose the fragility of the NELFUND-reliant model. The government will find itself in a paradoxical situation where it has lent billions of Naira to students to pay for an education that is not being delivered.

Students sitting at home with millions of Naira in student loan debt hanging over their heads will be forced to ask a simple, devastating question: If we are paying so much, and borrowing so much to pay it, why are the classrooms locked?

The over-reliance on NELFUND is not a silver bullet; it is a band-aid on a deep structural wound. Until the government addresses the funding of the universities—specifically the welfare of the staff and the upgrade of facilities—the loans will merely finance a broken system, leaving the next generation with nothing but debt and a diploma from a closed university. This video provides relevant context on the tension between NELFUND’s initiatives and the rising cost of tuition in Nigerian institutions.