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.

 

Warning

Credit KarmaRemember, 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 consolidating your student loans away from NelNet.  You can do this in a variety of ways, but I recommend looking at CU Student Loans – these are student consolidation loans that are offered by local credit unions, so they are a lot easier to work with than FedLoan.

Try it out – CU Student Loans.  You can check your eligibility for free, and it’s quick and easy.

 

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

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

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

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

Documents Related to Student Loan Forgiveness or Loan Discharge

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

Documents Related to Bankruptcy Claims

Nelnet
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.

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Comments

  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?

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