NelNet Student Loan Servicing Problems

NelNet Student Loan ServicingNelNet is one of the nation’s largest student loan servicing companies.  What happens is that the United States Department of Education contracts with companies like NelNet to provide servicing options for their student loans.  Prior to 2012, when financial reform changed how student loans were originated, NelNet was also one of the largest holders of student loan debt, topping over $25 billion.

What many student loan borrowers don’t realize is that companies like NelNet have as much power as the government when it comes to managing your student loans.  Student loan servicing companies like NelNet are contracted to:

  • Take in and apply payments to student loans
  • Administer the transfer of student loans
  • Process student loan programs, such as forgiveness, forbearance, and deferment
  • Report to credit agencies past due payments
  • Seek repayment from defaulted loans

Plus a whole lot more.  As a result, NelNet is not a popular company among student loan borrowers.

NelNet’s Past Student Loan Servicing Problems

NelNet has been mired in controversy for years regarding how it handles student loans.  As early at 1993, NelNet was accused of using a tax loophole to generate upwards of $1.2 billion dollars in profits from student loans that it managed.

In 2007, the States of New York and Nebraska accused NelNet of industry kickbacks and gifts to colleges and universities that pushed students towards NelNet loans.  There were also more reports of settlements with student loan borrowers and program administrators throughout the last few years arising from claims improper management of student loan subsidies and other programs.

NelNet’s Other Names

It’s important to realize that NelNet does business as more than 50 subsidiaries in the United States and Canada.  As a student loan borrower, your loan may very well be owned by NelNet and you don’t even realize it.  Some of the larger subsidiaries include: inTuition, infiNet, LoanSTAR, and TriCura Canada.

Student Loan Borrower Problems with NelNet

NelNet has been a popular discuss on this website, and that’s why I wanted to devote an entire post to tackling problems with NelNet student loan servicing.  Too many times student loan borrowers get stuck in a place where they don’t know where to go to vent their problems with their student loan servicer, and this is the place to do it.

Here are some past comments regarding NelNet student loan servicing:

  • Adam had issues when is loans were transferred from NelNet to Fedloan.  It appears that NelNet never communicated the most recent payments when his student loans were transferred.

NelNet Student Loan Issue


  • Jenn was told she was delinquent from NelNet AFTER her student loans had been consolidated and paid off.  

NelNet Student Loan Issue 2


We also get emails from student loan borrowers who are having problems with NelNet:

Samantha is a reader who reached out because of her frustrations with NelNet.  She graduated in 2010 and now lived in Mexico.  This has made it a challenge to pay her student loans, because NelNet (and most other debt companies) do not allow you to pay your loans with credit cards, only checking accounts and debit cards.  However, NelNet advertises that they accept PayPal as a form of payment for their student loans, which would be awesome, except they didn’t allow Samantha to use that option.

According to Samantha, “I asked if I could pay with PayPal and they mentioned that option is only available if I request it when I first set up my account. I asked, ´Can I delete my account and re-instate it?´ their answer was no.”  So much for following through on your commitments NelNet.


Remember, student loan servicing companies like NelNet can and do report you to the credit bureaus for non-payment of your student loans.  But, from the stories shared above, they sometimes make mistakes.  That’s why I urge you to check your credit score for free using Credit Karma. They will show you your credit score for free, and then you can know if something is wrong.  Plus, there are no gimmicks – it’s truly free.

Get Away from NelNet

Finally, if you are able to, you should look at refinancing your student loans away from NelNet.  You can do this in a variety of ways, but I recommend looking using Credible, a student loan refinancing marketplace where you can receive offers from multiple lenders after filling out one short form.

Try it out – Credible.  It’s free and you can get an estimate of how much you can save by refinancing in less than a minute.

Getting Help with your NelNet Student Loans

Before you go on thinking that NelNet is a scam and you have no recourse, make sure that you take the steps below.

Contact NelNet student loan servicing (they make it confusing, so make sure you send stuff/call the right location):

  • Phone: 888-486-4722

General Questions

P.O. Box 82561
Lincoln, NE 68501-2561
Fax: 877.402.5816

Documents Related to Forbearance, Deferment, Repayment Plan Options, or Enrollment Status

Attn: Enrollment Processing
P.O. Box 82565
Lincoln, NE 68501-2565
Fax: 866.545.9196

Documents Related to Student Loan Forgiveness or Loan Discharge

Attn: Claims
P.O. Box 17460
Denver, CO 80217-7460
Fax: 303.696.5518

Documents Related to Bankruptcy Claims

3015 South Parker Road, Suite 400
Aurora, CO 80014-2904
Fax: 303.696.5518

If you aren’t getting the help you need from NelNet, or you think that their customer service is giving you the run-around, you do have other options to get your story heard.  Check out these options for help:

U.S. Department of Education

U.S. Department of Education
Federal Student Aid Information Center
P.O. Box 84
Washington, DC 20044-0084
800-4-FED-AID (TTY: 800-730-8913)

The Federal Student Aid Ombudsman 

Phone: 1-877-557-2575

The Federal Trade Commission

Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue, NW
Washington, DC 20580
877-FTC-HELP (382-4357) toll-free

Many borrowers, if they don’t have luck with the Department of Education or the Student Loan Ombudsman, have found success contacting their Congressman.  Most Congressional offices have clerks setup to help their constituents deal with government agencies, such as the Department of Education.  You should find your Congressman’s contact information and reach out to their office for help.


Share Your Story

Have you had a challenging experience with NelNet as your student loan provider?  Has their customer service not been of service?  Please share your story below – and even better if you found a resolution!

If you are looking for information about FedLoan, check out our post on FedLoan Servicing – The Worst Student Loan Servicer.

Get Rid Of Your Student Loans - Legally!
Sign up below and discover 3 ways to ditch your student loans.

A lot of places will tell you that you can't get out of your student loans. But guess what? There are ways to do it, and I give them away for free right here.


  1. says

    I’m glad that they are not my student loan servicing company. My loans were just transferred from Direct Loans to Sallie Mae which I’m not too excited about since Sallie Mae doesn’t have a great reputation. My loan balance did mysteriously go down by $5000 though so maybe the transfer will benefit me.

  2. says

    I’ve actually had really good experience with Nelnet (so far, knock on wood). My real problem is with Brazos loan servicing. My undergrad loan was transferred from ACS to Brazos and brazos just seems so unprofessional. The website looks like it was made yesterday and the info is not very clear. I actually miss ACS. I can’t wait to be debt free and not deal with third party companies.

  3. In Debt says

    I had student loans through Graduate Leverage/Brazos and never had an issue. Last year my loans changed to Nelnet, and they are really terrible. I had set up automatic payments online, paid the first month since there is some lagtime, then a few months later, I got a notice that I had a late payment. I called them and tried to resolve it, but had to pay a fine anyway. I re-set up online payments, and realized that there was a problem on the website- the last line asks for a date, and it kept “auto-correcting” what I was entering, but actually messing up the date. I had to type it in multiple times and keep correcting it until it stopped auto-correcting me. Now this month, i received my statement, and my fixed interest rate has magically increased! What the heck? I have to call them again, but I’m really starting to think they do this intentionally. Errors on the website that prevent online payments from going through? Let’s say they make $20 per person x 100,000 people- that’s a lot of money. And I don’t even know how they can change my interest rate.

  4. AD1964 says

    I too would like to know what can be done about this company. I have tried having my student loan forgiveness done and everytime I call they need another piece of information. It is very simple. I have worked in a low income district as a highly qualifed teacher for 8 years. I have had letters from HR, my principal, as well as the application required filled out. I call every few weeks and they say “oh we need another piece of information”. That was not in your last letter? Why is that? No one has any answers. I have filed with the DoE and the FTC. Waiting for a response. These people do not care. They say ‘you have not met the criteria’ What is the criteria because I NEVER receive correspondence saying I am deficient with another piece of ‘minucia’ detail that is NO WHERE in the directions.

  5. Cliff203 says

    Nelnet is absolutely terrible at communicating a potential problem loan situations to the “endorser” of a loan.

    In the no good deed goes unpunished category, I “endorsed” or co-signed 3 student loans for the children of a friend who was going through financial difficulty and did not qualify for the loans under FAFSA. She was making payments on one of the loans that required them at that point but fell behind. I got one letter from NelNet after the payments fell 30 days behind. I made a phone call to the borrower, was assured that the payments would be brought up to date and received no further notices from NelNet. Just recently I was sent an alert from Credit Karma indicating that a loan on my credit report was120 days past due and now listed as delinquent. It was the student loan and I had not gotten any further communication from NelNet. My credit score dropped 75 points instantly.

    Shouldn’t NelNet be responsible to notify loan co-signers when action is needed?

  6. says


    I have a student loan with ACS (Lender: NELNET EDUCATION FUNDING TRUST / GUARANTOR is NATIONAL STUDENT LOAN PROGRAM). I have been paying on my loan faithfully since December 2008; I have the following problems:

    1) My balance remains the same. I have been trying to speak with a manager at ACS which is near to impossible to discuss my problem. My full amount of the loan of owing is $25,000 give or take. I have been making paying faithfully since Dec. 2008 and there records show me making the following (Payment $16,188.61 / Principal $6,705.74 / Interest $9,317.96).

    2) My payments are due the 14th of every month; however I usually make my payments between the 3rd – 8th of each month. Maybe a couple of times I made the payments around the 13th. Majority of the payments are around the 3rd thru the 5th

    3) When I make a payment the principal and interest rate which is fixed at 5.470 is applied different each month.

    4) I am also unsure of when my loan will be paid off since the balance does not change and I am unable to speak with someone.

    5) There site is not user friendly, I am unable to locate a main person (VP someone up top) to get any help.

    6) I would like to switch over to someone else but I am afraid of what Nelnet would do with my loan.

    While I was searching the internet for information regarding Nelnet, I found a number of people in the same position as myself. I would like to pay this off by making extra payments but from what I see from others who are with this company their payments are not being applied correctly and they seem to lose their money. I know each person is different but I don’t want to pay extra until I get things straighten out. If you can offer me any advice, I appreciate it very much as I would like to pay this loan off quickly. Just a side note, I am also paying on my son’s parent student loan with salliemae on time and the payments / interest rates are applied in a matter that I see my balance going down each month.
    Signed: No end in sight for this madness.

  7. Sarah Merchant says

    My student loans were forgiven due to permanent disability when I was diagnosed with terminal breast cancer. Nelnet tried to reinstate my loans falsly and later retracted it but reinstated a new probation period. They are now trying to issue me another Cancellation of Debt form after already issuing me on 2 years ago in which I was taxed 10k for. I am not looking forward to arguing my way out of this one again. They are an unbelievable company to deal with and have no compassion for the terminally ill.

  8. Tala says

    Student loan is like cancer, you need to stop it when you can. Your loan will be transferred between companies for their benefits. They hide their dirty work and no body check.

  9. says

    I started paying down my student loans in Nelnet while attending graduate school. What is funny is that you have to call them directly to allow payments to go down on the interest while in school. I started making payments and noticed that the money deposited was only going towards the principal. Meanwhile, interest started to accumulate and I as unable to pay down the interest via the website. I called them and had my account fixed so that I could pay down interest and the principal while attending graduate school. They were not too happy with me because I am minimizing the amount of money they are making off of me while in school.

  10. M L M says

    Is it legal for student loan debt to accrue interest daily? I had been making significant extra payments to be applied toward principle (in writing). After a year, my overall principle was the same. After reacting quite inappropriately, I finally found out that because the interest accrues daily, all extra payments went to interest and fees. The only way for my extra payment each month to be applied to principle was to make that extra payment on day of due date. But then it takes 3-4 days to “process” that extra payment….HIGHWAY ROBBERY!!! I don’t mind paying my debt, butbi NEVER saw anywhere that interest would accrue daily. I was told then (in college) that student loan debt is the best debt to have and that it won’t hurt my credit and better than a house loan…HA!!! It’s killing my debt to asset ratio. I have dealt with ACS, Brazos, Sallie Mae, etc…now I’m with Nelnet. I love how they sell your loans without telling you…right as you are approaching an interest rate reduction for 24 on-time payments!!! All of it….SOOOO WRONG!!!!!!

  11. Cliff says

    I also received a total discharge from Nelnet because of a disability although in my case it’s very thankfully not terminal. Sarah Merchant, if you are still with us, and you happen to read this my prayers are with you. Anyway, in my case after claiming that I did not complete,and return a form I never got they reinstated my loans, and then essentially forcing me to get my doctor to complete the forms again because the documentation they had on file was too old they finally discharged my loans. Well, not exactly. One thing Nelnet had to do was to request that my loans be sent back to them from the lenders. Well, they claim that they never received the loans. The lenders tell me that they were never asked. So now I’m told that my case at Nelnet has been escalated to management level to resolve this. The irony here is that six months ago I was forced to enter into a very minimal repayment paln with what I just found out is one of my lenders. Had I not agreed they would have attached my Social Security benefits. I told them what Nelnet was doing but they didn’t care. They did say that once the loans were actually closed out they would refund my payments. I’m not holding my breath. The really frustrating point for me is that I am on a very limited income. As a result I am trying to refi my home for a lower payment. my refi counselor tells me that the derogatories from Nelnet and the lenders is keeping my credit score from letting me qualify for a new mortgage. Nelnet has told me that they will in fact remove the negative info from my credit report but not till they actually finish with the paperwork as it were. So who knows. Try and deal with a more reputable agency if possible.

  12. patti says

    Nelnet is awful. I am paying 2x my payment and my loan is not going down it actually has gone up!! How can I find out what I signed? They tell me they have no way to get them to me. I need to find out why and all they tell me is I had deferred payments for a years and that is why. So what can I do? I need help on this!! I make $250.00 per month for the last 4 yrs and still not going down. I am being ripped off!! Its worse than a credit card!

  13. Carroll says

    Nelnet student loan billing statements that are delivered by mail are dated on the 2nd of every month with a due date of the 23rd of the month. A reasonable person might assume that the bill would be processed and delivered shortly after the statement date in order to give enough time to make a payment within that period and before the due date. But, Nelnet delivers student loan statements late in this 21 day billing cycle. This delay can be called “short cycling.” Delaying delivery by even one day will make Nelnet more money. The balance they charge interest on won’t be lowered until a payment is posted at Nelnet. This late delivery also increases the likelihood of late payments. Nelnet billings will never come before the 8th of the month and sometimes as late as the 15th only 8 day before the due date. Adding 3-5 days for postal delivery and processing, a payment may not be posted until just a few days before the due date. Even a short delay in making a payment may leave the student borrower with a late payment.

    Nelnet targets their statement bill delivery for the second Friday of the month, after the statement date. Why the second Friday? The answer goes to the deeper target date of Sunday. Receiving a bill on Friday that is not responded to and in the mail system within 24 hour will shorten the billing period an additional 2 days. Who is going to stand by their mail box waiting for a Friday mail delivery so they can pay their Nelnet bill? Sunday the post office is closed, it is a non-delivery day. On average the 21 day billing cycle is effectively reduced to 10 days. Interest charged on the previous month’s higher balance will continue every day the delivery is delayed and will not be reduced until the payment is posted at Nelnet. Nelnet does not include the date a payment is posted on the billing statement.

    Short cycling also accounts for why monthly interest payments might appear higher than the month before. The second Friday is different every month. For example September 11, 2015 will be the next 2nd Friday and then October 9, 2015 and November 13, 2015. These are the next 2nd Friday’s and the day Nelnet loan statements are scheduled for delivery. Unless Nelnet changes their delivery date, billing statements will be delivered on or after these dates.

Leave a Reply

Your email address will not be published. Required fields are marked *