Nelnet 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 payments that are past due
- Seek repayment from defaulted loans
Plus, they do 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 toward Nelnet loans. There were also more reports of settlements with student loan borrowers and program administrators throughout the last few years arising from claims of 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 discussion 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 his loans were transferred from Nelnet to FedLoan. It appears that Nelnet never communicated the most recent payments when his student loans were transferred.
- Jenn was told she was delinquent from Nelnet after her student loans had been consolidated and paid off.
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 lives 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
If you’re struggling with NelNet and are looking for help, start by calling NelNet and speaking to their customer service. They are literally paid by the government to help you with your student loans.
If you’re not quite sure where to start or what to do, consider hiring a CFA or CFP to help you with your student loans. We recommend The Student Loan Planner to help you put together a solid financial plan for your student loan debt. Check out The Student Loan Planner here.
Finally, if you are able to, you should look at refinancing your student loans away from Nelnet. It doesn’t always make sense to refinance Federal student loans into private loans, but for some people looking to save money, it does.
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. Plus, College Investor readers can get a $200 bonus when they refinance with Credible!
Try it out: Credible. It’s free and you can get an estimate of how much you can save by refinancing in less than two minutes. Don’t believe me? Just fill out this form and see for yourself:
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 to — or call — the right location):
- Phone: 888.486.4722
P.O. Box 82561
Lincoln, NE 68501-2561
Documents Related to Forbearance, Deferment, Repayment Plan Options, or Enrollment StatusNelnet
Attn: Enrollment Processing
P.O. Box 82565
Lincoln, NE 68501-2565
Documents Related to Student Loan Forgiveness or Loan DischargeNelnet
P.O. Box 17460
Denver, CO 80217-7460
Documents Related to Bankruptcy ClaimsNelnet
3015 South Parker Road, Suite 400
Aurora, CO 80014-2904
If you aren’t getting the help you need from Nelnet, or you think that their customer service is giving you the runaround, you do have other options to get your story heard. Check out these options for help:
U.S. Department of EducationU.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 OmbudsmanPhone: 1-877-557-2575
The Federal Trade CommissionFederal 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 set up 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: FedLoan Servicing – The Worst Student Loan Servicer.