Student Loan Access and Academic Performance: Evidence from Modibbo Adama University NELFUND Beneficiaries
DOI:
https://doi.org/10.33003/fujafr-2026.v4i2.347.302-314Keywords:
NELFUND, Student Loans, Academic Performance, Human Capital Theory, Higher Education Finance, NigeriaAbstract
Purpose: This study examines whether access to student loans improves academic performance among university students in Nigeria. Specifically, it evaluates the effect of the Nigerian Education Loan Fund (NELFUND) participation on students’ academic performance, cumulative grade point average (CGPA), while accounting for prior academic ability, socioeconomic status, and time allocation factors.
Methodology: The study adopts a quantitative cross-sectional research design using primary data collected from undergraduate students at Modibbo Adama University, Yola. The sample was drawn from population of 15263 students and consisted of a total sample of 659 students, out of which 303 are NELFUND beneficiaries and 356 were non-NELFUND beneficiaries. A purposive stratified sampling technique was employed to ensure representation across key demographic and academic characteristics. The study utilizes a stepwise Ordinary Least Squares (OLS) regression approach to estimate the association between student loan and academic performance. To address potential selection bias, Propensity Score Matching (PSM) is applied as a robustness check, matching beneficiaries with comparable non-beneficiaries based on observable characteristics.
Results and Conclusion: The findings indicate that access to NELFUND students’ loan participation is associated with a statistically significant improvement in academic performance. Beneficiaries record an average CGPA increase of approximately 0.34 points (p < 0.01) relative to non-beneficiaries. The robustness of this effect is confirmed through PSM estimates, which yield a comparable treatment effect of +0.35. The results further show that prior academic performance is the strongest predictor of current achievement, while low socioeconomic status exerts a significant negative influence on academic performance.
Implication of Findings: The study highlights the importance of well-targeted and efficiently implemented student loan programmes in improving academic outcomes. It suggests that policymakers should strengthen disbursement efficiency and complementary academic support systems to maximize the impact of NELFUND on student performance.
References
Angrist, J. D., & Pischke, J.-S. (2009). Mostly harmless econometrics: An empiricist's companion. Princeton University Press. DOI: https://doi.org/10.1515/9781400829828
Barr, A., Bird, K. A., & Castleman, B. L. (2021). The effect of reduced student loan borrowing on academic performance and default: Evidence from a loan counseling experiment. Journal of Public Economics, 202, 104493. DOI: https://doi.org/10.1016/j.jpubeco.2021.104493
Becker, G. S. (1993). Human capital: A theoretical and empirical analysis with special reference to education (3rd ed.). University of Chicago Press. DOI: https://doi.org/10.7208/chicago/9780226041223.001.0001
Belley, P., & Lochner, L. (2007). The changing role of family income and ability in determining educational achievement. Journal of Human Capital, 1(1), 37-89. DOI: https://doi.org/10.1086/524674
Bettinger, E. (2015). Need-based aid and college persistence: The effects of the Ohio College Opportunity Grant. Educational Evaluation and Policy Analysis, 37(1_suppl), 102S-119S. DOI: https://doi.org/10.3102/0162373715576072
Carneiro, P., & Heckman, J. J. (2002). The evidence on credit constraints in post-secondary schooling. The Economic Journal, 112(482), 705-734. DOI: https://doi.org/10.1111/1468-0297.00075
Castleman, B. L., & Long, B. T. (2016). Looking beyond enrollment: The causal effect of need-based grants on college access, persistence, and graduation. Journal of Labor Economics, 34(4), 1023-1073. DOI: https://doi.org/10.1086/686643
Chapman, B. (2006). Income contingent loans for higher education: International reforms. In E. Hanushek & F. Welch (Eds.), Handbook of the economics of education (Vol. 2, pp. 1435-1503). Elsevier. DOI: https://doi.org/10.1016/S1574-0692(06)02025-3
Darolia, R. (2014). Working (and studying) day and night: Heterogeneous effects of working on the academic performance of full-time and part-time students. Economics of Education Review, 38, 38-50. DOI: https://doi.org/10.1016/j.econedurev.2013.10.004
Dynarski, S. (2003). Does aid matter? Measuring the effect of student aid on college attendance and completion. American Economic Review Papers & Proceedings, 93(2), 279-288. DOI: https://doi.org/10.1257/000282803321455287
Eisenberg, D., Golberstein, E., & Hunt, J. B. (2009). Mental health and academic success in college. The B.E. Journal of Economic Analysis & Policy, 9(1). DOI: https://doi.org/10.2202/1935-1682.2191
Haushofer, J., & Fehr, E. (2014). On the psychology of poverty. Science, 344(6186), 862-867. DOI: https://doi.org/10.1126/science.1232491
Imbens, G. W., & Rubin, D. B. (2015). Causal inference in statistics, social, and biomedical sciences. Cambridge University Press. DOI: https://doi.org/10.1017/CBO9781139025751
Johnstone, D. B. (2004). The economics and politics of cost sharing in higher education: Comparative perspectives. Economics of Education Review, 23(4), 403-410. DOI: https://doi.org/10.1016/j.econedurev.2003.09.004
Kurniawan, A., Maulana, S., Pritadrajati, D., Rarasati, N., Revina, S., Suryadarma, D., & Tresnatri, F. A. (2026). Low-cost low-touch information provision, parental involvement, and student learning outcomes: Evidence from a government-implemented intervention in Indonesia. The Journal of Development Studies, 1-24. DOI: https://doi.org/10.1080/00220388.2026.2640887
Li, F., Miao, J., & Yang, J. (2018). More money, better performance? The effects of student loans and need-based grants in China's higher education. China Economic Review, 51, 295-311. DOI: https://doi.org/10.1016/j.chieco.2017.09.005
Lochner, L., & Monge-Naranjo, A. (2011). The nature of credit constraints and human capital. American Economic Review, 101(6), 2487-2529. DOI: https://doi.org/10.1257/aer.101.6.2487
Lohr, S. L. (2019). Sampling: Design and analysis (2nd ed.). Chapman & Hall/CRC. DOI: https://doi.org/10.1201/9780429296284
Marshall, M. (2021). Student loan debt on academic performance [Unpublished honors thesis]. Bryant University.
Marx, B. M., & Turner, L. J. (2019). Student loan nudges: Experimental evidence on borrowing and educational attainment. American Economic Journal: Economic Policy, 11(2), 108-141. DOI: https://doi.org/10.1257/pol.20180279
Modibbo Adama University. (2026). Modibbo Adama University. https://mau.edu.ng/
Nigerian Education Loan Fund (NELFUND). (2024a). Educational loans. Federal Republic of Nigeria. https://nelf.gov.ng/educational-loans
Nigerian Education Loan Fund (NELFUND). (2024b). Operational framework and implementation guidelines. https://nefl-public-assets.s3.eu-west-1.amazonaws.com/
Obunadike, G. N., Jiya, E. A., & Ajik, E. D. (2024). A study of student loans procedure in selected countries for effective implementation of Nigeria Education Loan Fund. FUDMA Journal of Accounting and Finance Research, 2(3), 172-184. DOI: https://doi.org/10.33003/fujafr-2024.v2i3.124.172-184
Oketch, M., McCowan, T., & Schendel, R. (2014). The impact of tertiary education on development: Systematic literature review for DFID. Institute of Education, London.
Oreopoulos, P., & Petronijevic, U. (2013). Making college worth it: A review of research on the returns to higher education. The Future of Children, 23(1), 41-65. DOI: https://doi.org/10.1353/foc.2013.0001
Qi, S., Ma, Q., & Ji, X. (2022). The influence of financial aid systems on student academic development in higher education in China. Sustainability, 14(21), 14068. DOI: https://doi.org/10.3390/su142114068
Rosenbaum, P. R., & Rubin, D. B. (1983). The central role of the propensity score in observational studies for causal effects. Biometrika, 70(1), 41-55. DOI: https://doi.org/10.1093/biomet/70.1.41
Stinebrickner, R., & Stinebrickner, T. R. (2003). Understanding educational outcomes of students from low-income families. Journal of Human Resources, 38(3), 591-617. DOI: https://doi.org/10.2307/1558769
Teferra, D. (2013). Funding higher education in Africa: State, trends and perspectives. Journal of Higher Education in Africa, 11(1-2), 19-51. DOI: https://doi.org/10.57054/jhea.v11i1-2.1544
Walsemann, K. M., Gee, G. C., & Gentile, D. (2015). Sick of our loans: Student borrowing and the mental health of young adults. Social Science & Medicine, 124, 85-93. DOI: https://doi.org/10.1016/j.socscimed.2014.11.027
York, T. T., Gibson, C., & Rankin, S. (2015). Defining and measuring academic success. Practical Assessment, Research, and Evaluation, 20(5), 1-20.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Abdullahi Ahmed, Danjuma Ahmad, Adamu Jibrilla
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
The FUDMA Journal of Accounting and Finance Research (FUJAFR) operates a copyright policy that ensures a balance between author rights and wide dissemination of scholarly work.
1. Author Copyright Retention
Authors retain full copyright of their published work without restriction. Submission to FUJAFR does not transfer ownership of copyright to the journal.
2. License to Publish
By submitting a manuscript and upon acceptance, authors grant FUJAFR:
- The right to publish, reproduce, and distribute the article
- The right to identify itself as the original publisher of the work
This grant is non-exclusive, meaning authors are free to reuse their work in other contexts, provided proper acknowledgment of the original publication in FUJAFR is made.
3. Licensing of Published Content
All articles are published under the:
Creative Commons Attribution-NonCommercial License (CC BY-NC 4.0)
Under this license:
- Users may share and adapt the work for non-commercial purposes only
- Proper attribution to the author(s) and the journal is required
- Any commercial use requires explicit permission from the copyright holder
4. Author Reuse Rights
Authors are permitted to:
- Archive their published articles in institutional repositories or personal websites
- Share their work for educational and research purposes
- Reuse portions of their work in future publications (e.g., books or other articles), provided proper citation of the original publication is included
5. Third-Party Content
Authors are responsible for obtaining permission to use any third-party copyrighted material (e.g., images, tables, datasets) included in their manuscripts. Proper acknowledgment must be provided where required.
6. Attribution Requirement
All users of FUJAFR content must provide appropriate credit, including:
- Author name(s)
- Article title
- Journal name (FUJAFR)
- Year of publication
