Student Loan Access and Academic Performance: Evidence from Modibbo Adama University NELFUND Beneficiaries

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.