Is Nelnet a Good Loan Servicer for Your Federal Student Loans

Nelnet is one of the largest federal student loan servicers in the US, managing over 13 million student loan accounts.

Nelnet has been in business since 1978 and has a long history of servicing student loans.

Nelnet is a well-established company with a large team of customer service representatives.

Nelnet is a for-profit company, which can be a concern for some borrowers.

Nelnet's customer service hours are Monday through Friday, 8am to 8pm ET, which may not be convenient for everyone.

Nelnet verifies income for income-sensitive and income-based repayment plans, requiring gross monthly income information to be recent, within the last 90 days.

Nelnet handles income verification for certain repayment plans, making it a reliable option for borrowers who need this service.

To ensure Nelnet has the most up-to-date information, borrowers should provide recent income documentation, usually within the last 90 days.

Making payments with Nelnet is a straightforward process, but it's essential to understand your options and how your payments will be applied.

You can make payments by phone, mail, or online. To make a payment by phone, simply call 888-486-4722 and you can speak with a representative or make a payment through the automated phone system.

If you prefer to pay by mail, you'll need to use the mailing address listed on your billing statement and include your Nelnet account number on the check.

Nelnet.com is also an option for making payments online. To start, follow these three simple steps:

You can make extra payments to pay off your loans faster, but be aware that Nelnet will apply the extra payment to the loan with the highest interest rate. Once that loan is paid off, Nelnet will apply the extra payments toward the loan with the next highest interest rate.

Nelnet has been involved in several controversies over the years, including accusations of using tax loopholes to generate profits from student loans and industry kickbacks to colleges and universities.

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. This is a red flag for borrowers, as it suggests that Nelnet may prioritize its own interests over those of its customers.

Nelnet has also been the subject of numerous complaints, with the Consumer Financial Protection Bureau (CFPB) reporting that it handled 5,000 federal student loan complaints between Sept. 1, 2019, and Aug. 31, 2020, with approximately 14% of those complaints being about Nelnet.

Here are some of the federal student loan servicers that are currently active, including Nelnet:

If you're experiencing issues with your loan servicer, you're not alone. Many borrowers have trouble with Nelnet, a popular loan servicer. You can contact Nelnet to discuss your repayment options if you're experiencing financial hardship and can't afford your minimum monthly payments.

Nelnet offers temporary postponements of payments through deferment or forbearance. You can apply for these temporary postponements by calling your loan servicer as soon as you can.

To make monthly payments, additional payments, or pay off your loans in full, you can go online, use Nelnet's mobile app, or call customer support. You can also mail in a payment or set up regular payments through your bank's online bill-pay service.

If you're struggling to pay your student loans, you may be eligible for an income-driven repayment plan. This can reduce your monthly payment. You can contact Nelnet to discuss your options.

Here are some common issues borrowers have with Nelnet:

• Difficulty paying loans while abroad

• Limited payment options (e.g., no credit card payments)

• Difficulty resolving issues with customer support

• Difficulty consolidating loans

• Difficulty accessing repayment options while serving in the military

If you're experiencing any of these issues, it's a good idea to contact Nelnet directly to discuss your options. They may be able to help you find a solution to your problem.

Servicing changes are underway, with the Department of Education signing new contracts with five student loan servicers in April 2023. These companies are Maximus Education (also known as Aidvantage), Edfinancial, MOHELA, Nelnet, and Central Research, Inc. (also known as CRI).

Aidvantage, Edfinancial, MOHELA, and Nelnet were already existing servicers, but CRI is a new addition to the list. OSLA, another existing servicer, did not receive a new contract.

The new contracts went live in late 2024, and all federal student loan borrowers will eventually be able to access their accounts through the StudentAid.gov website. This change aims to reduce disruptions from account transfers and increase servicer accountability.

Building a centralized online student loan servicer portal is a complex task, so borrowers shouldn't expect it to roll out for at least a couple of years.

Here's a list of the federal student loan servicers:

If you're unhappy with your servicer, don't worry, there are steps you can take to address the issue. Unfortunately, you'll have minimal legal recourse.

You can try to resolve the issue directly with your servicer, but if that doesn't work, you can file a student loan complaint. Hold on to records of all conversations with your servicer, including letters, bills, and emails, so you have information to reference.

Most federal student loan borrowers should file their complaint with the U.S. Department of Education's Federal Student Aid (FSA) office, which has the most power to address your issues. You can do this through its online feedback center or by calling 800-433-3243.

If you're dealing with Nelnet, you're not alone - it's one of the largest loan servicers in the country and has been the subject of controversy. In the Consumer Financial Protection Bureau's 2019 Student Loan Ombudsman Report, the CFPB handled 5,000 federal student loan complaints between Sept. 1, 2019, and Aug. 31, 2020, with approximately 14% of those complaints being about Nelnet.

Here are some federal student loan servicers you might be dealing with:

If you're having trouble with Nelnet, you can contact the company about various topics, including total and permanent disability discharge, payments, trouble affording payments, loan consolidation, and repayment options for service members.

Does Nelnet verify income? Yes, for the income-sensitive and income-based repayment plans, Nelnet does verify the borrower's income.

The gross monthly income information must be recent, within the last 90 days. This is a crucial factor to consider when applying for these plans.

Nelnet is one of the main student loan servicers for the Department of Education, servicing Direct Student Loans and some federally-held FFEL Loans.

Nelnet handles Disability Discharge for borrowers who are totally and permanently disabled, transferring their loans to Nelnet to handle the process.

Nelnet is also the servicer that handles loans for borrowers with accounts that begin with an "E", accessible through https://nelnet.studentaid.gov/.

Here's a list of other federal student loan servicers, including Nelnet:

American Education Services manages only FFEL Program debt, while Default Resolution Group services only federal student loans in default. Heartland ECSI is a servicer for borrowers with federal Perkins loans.

Aidvantage services federal student loans, just like other servicers.

Central Research, Inc. (CRI) manages federal student loans, but we don't know what specific types of loans they handle.

Edfinancial Services services federal student loans, but we don't know what specific types of loans they handle.

MOHELA services federal student loans, including some that were previously serviced by FedLoan Servicing.

Nelnet services Direct Student Loans and some federally-held FFEL Loans.

American Education Services only services FFEL Program debt.

Default Resolution Group services only federal student loans in default.

Heartland ECSI is a servicer for borrowers with federal Perkins loans.

FedLoan Servicing is no longer active, and all borrowers were transferred to either MOHELA, Edfinancial, Aidvantage, or Nelnet.

Great Lakes is no longer active, and borrowers were transferred to Nelnet.

OSLA is no longer active, and borrowers were transferred to Aidvantage.

When dealing with Nelnet, it's essential to have the right documents ready. To enroll in income-based repayment plans, you'll need proof of gross monthly income, which can be in the form of pay stubs from the last 90 days.

Nelnet requires a signed copy of your federal tax form, such as form 1040, 1040 A, 1040X, 1040 EZ, or 8879.

These documents are crucial for Nelnet to process your loan information accurately.

To confirm the frequency of pay, your pay stubs should include this information.

Here's a list of the required documents:

Nelnet offers private education loans as part of its business. These loans are separate from the federal loans they primarily serve.

Nelnet's private education loans are not part of the federal loan program, but rather a separate offering for students and families.

Sloan Servicing is the new student loan servicer division of Nelnet, which handles commercially-held FFEL Loans.

If your Nelnet student loan account begins with "D" or "J", your loans will be serviced by Sloan Servicing.

They will handle all your payments and questions.

Sloan Servicing is a result of Nelnet migrating commercially-held FFEL Loans to a new servicer.

You shouldn't have old FFEL loans, but if you do, your account will be serviced by Sloan Servicing.

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Contacting Nelnet is relatively straightforward. You can reach them by phone, but be aware of their hours of operation: 8 - 9pm EST on Mondays, 8 - 8pm EST on Tuesdays and Wednesdays, and 8 - 6pm EST on Thursdays and Fridays.

If you're a Nelnet customer, you can write to them at P.O. Box 82561 in Lincoln, Nebraska. California residents, on the other hand, should use P.O. Box 82578 for their correspondence.

To make a payment, you'll need to know the correct address, which varies depending on your account number. If your account starts with "E", you'll need to send payments to the U.S. Department of Education at P.O. Box 2837 in Portland, Oregon.

A class-action lawsuit was filed against Nelnet in June 2020 by the Domina Law Group on behalf of five student loan borrowers. The borrowers claim that their income-driven repayment plan applications were mishandled.

If you had federal student loans serviced by Nelnet and experienced issues with your income-driven repayment plan, you may be eligible for relief. To qualify, you must have been enrolled in an IDR plan, submitted an application to renew the plan on time, had your application eventually approved, and had your IDR temporarily discontinued by Nelnet while the application was pending.

The lawsuit alleges that Nelnet mishandled IDR plan applications, but it's essential to note that this is a specific complaint and not a reflection of Nelnet's overall performance as a loan servicer.

The federal government regulates the student loan servicers to ensure they handle borrowers' accounts fairly and efficiently.

Aidvantage is one of the federal student loan servicers, and borrowers can contact them for assistance with their accounts.

Central Research, Inc. (CRI) and Edfinancial Services are also authorized to handle federal student loans, but they have specific roles. CRI services only FFEL Program debt, while Edfinancial Services handles a range of federal student loans.

MOHELA, Nelnet, and American Education Services manage federal student loans, but they have different responsibilities. MOHELA and Nelnet handle a variety of federal student loans, while American Education Services only manages FFEL Program debt.

Default Resolution Group is a specialized servicer that handles federal student loans in default, and Heartland ECSI is responsible for servicing federal Perkins loans.

In the past, some servicers have been discontinued, such as FedLoan Servicing, Great Lakes, and OSLA. Borrowers who were previously serviced by these companies were transferred to other servicers, including MOHELA, Edfinancial, Aidvantage, or Nelnet.

A class-action lawsuit was filed against Nelnet in June 2020 by the Domina Law Group on behalf of five student loan borrowers. The lawsuit alleged that Nelnet mishandled income-driven repayment plan applications.

The lawsuit specifically targeted borrowers who had federal student loans serviced by Nelnet at any point within the previous four years prior to June 2020. If you fit this criteria, you may be eligible to join the class-action lawsuit.

To be eligible, you must have been enrolled in an income-driven repayment (IDR) plan, submitted an application to renew the plan on time, had your application eventually approved, and had your IDR temporarily discontinued by Nelnet while the application was pending.

Here are the key details to consider: