If you have federal student loans, there’s a good chance that you’ve dealt with Nelnet at some point. In 2018, Nelnet serviced student loans for 15.6 million borrowers. For many people, Nelnet student loan forgiveness provides the perfect repayment strategy. What is Nelnet and what Nelnet student loan forgiveness options are available?
What is Nelnet?
Nelnet is one of the nine student loan servicers used by the government. Federal borrowers are assigned a loan servicer, who handles loan payments and other services for borrowers.
Located in Lincoln, Nebraska, Nelnet is one of the largest student loan servicers. In 2018, Nelnet acquired Great Lakes Educational Loan Services for $150 million.
Student loan forgiveness through Nelnet
Nelnet borrowers can qualify for Nelnet student loan forgiveness through federal programs. What forgiveness options are available for federal borrowers?
Public Service Loan Forgiveness (PSLF)
PSLF is one way for borrowers to get their student loan debt forgiven. To qualify for PSLF, borrowers have to meet specific criteria, which includes:
- Work full-time for a government agency or qualifying nonprofit organization
- Have Direct Loans (or consolidate your loans with a Direct Consolidation Loan)
- Repay your student loans on an income-driven repayment (IDR) plan
- Make 120 qualifying payments
If you’re planning to pursue PSLF, you’ll want to submit an Employment Certification Form (ECF) to the FedLoan Servicing address listed on the form. Once you do this and your employment qualifications are confirmed, your student loans will be transferred to FedLoan Servicing, the official loan servicer of the PSLF program.
Sometimes Nelnet recommends keeping your loans with them while pursuing PSLF. Borrowers should not do this. You’ll want to move your loans to FedLoan. Get your employment verified and your loans transferred to FedLoan. You’ll be able to track your qualifying payments for future loan forgiveness.
Once they reach 120 qualifying payments, borrowers can apply for PSLF by submitting the Public Service Loan Forgiveness (PSLF): Application For Forgiveness. If approved, any remaining federal student loan debt will be forgiven tax-free.
Temporary Expanded Public Service Loan Forgiveness (TEPSLF)
If you applied for PSLF and were denied because some or all of your 120 payments didn’t qualify, you still have another option. The government saw that PSLF guidelines weren’t initially clear, so they created Temporary Expanded Public Service Loan Forgiveness (TEPSLF).
TEPSLF gives borrowers a second chance to qualify for loan forgiveness. To qualify for TEPSLF, you must have:
- Submitted a PSLF application and been denied because some or all payments weren’t made under a qualifying repayment plan
- Had at least 10 years of full-time employment approved by FedLoan Servicing
- Met requirements for the last 12 months worth of payments before applying for TEPSLF, including the last payment before applying (payments must be at least as much as they would have been paid under an income-driven repayment plan)
- Made 120 qualifying payments under TEPSLF standards while working full-time for a qualifying employer
If you were denied PSLF because of a technicality, it’s worth looking into TEPSLF to see if you qualify. Not all loans qualify for TEPSLF, so be sure to look at all of the stipulations before pursuing this option.
Income-driven repayment (IDR) forgiveness
If you don’t qualify for PSLF, there’s another way to get a portion of your student loan debt forgiven. If you are on an IDR plan and make payments for 20 to 25 years (depending on the specific IDR plan), any remaining student loan balance will be forgiven.
There are four IDR plans borrowers can choose from:
- Pay As You Earn (PAYE)
- Revised Pay As You Earn (REPAYE)
- Income-Based Repayment (IBR)
- Income-Contingent Repayment (ICR)
Unlike PSLF, you may end up paying taxes on your forgiven loans. According to the IRS, any forgiven student loan debt is considered taxable income. However, the good news is that you have a considerable amount of time to plan and save money to cover this expense.
Teacher loan forgiveness
Teachers with loans through Nelnet can pursue teacher loan forgiveness. Teachers may qualify to have a maximum of $17,500 or $5,000 in student loans forgiven, depending on the subject area taught, if specific requirements are met.
In order to qualify you need to meet exact requirements such as:
- Full time employment as a highly qualified teacher for 5 consecutive years, with at least 1 year after the 1997–98 academic year
- 5 completed academic years in a qualifying low-income school or educational service agency
- Borrowed qualifying loans before the end of your 5 academic years of teaching
This option should be weighed against PSLF since your total amount of debt may impact which forgiveness program is best for you.
Refinancing Nelnet student loans
Depending on your specific loan situation, refinancing your Nelnet student loans may be a better repayment option. With refinancing, a lender pays off your existing loans and you receive a new loan. Your new loan will have new terms, a new interest rate and new repayment options.
If you can secure a lower interest rate, you could save thousands of dollars in interest payments over the life of your loan. You must have established credit or a cosigner (if applicable) in order to qualify for refinancing and get a low rate.
As a general rule, if you owe less than 1.5 times your income, you are a good candidate for refinancing. If your debt is higher than that, loan forgiveness makes more sense, especially if you could qualify for PSLF.
Refinancing will turn your federal student loans into private loans. You’ll lose access to federal protections like loan forgiveness, IDR plans, forbearance, and deferment options. Private lenders may have options for borrowers facing hardship, but it’s not guaranteed. Make sure you won’t need access to any of the federal programs before moving forward with refinancing.
Tips for people with Nelnet student loans
Federal loan servicers don’t have the best reputation for customer support. This includes Nelnet. If you choose to stay with Nelnet as your loan servicer, make sure you are in the right repayment plan, file taxes correctly and stay vigilant with how Nelnet is handling your loans.
If your Nelnet student loans are in default, be sure to take the right steps to get back on track with repayment.
If you need extra help handling your loan situation, a student loan lawyer may be the best option. Particularly if you feel you’ve been taken advantage of or if your rights as a borrower aren’t being upheld, hiring a student loan lawyer may be in your best interest.
Situations that might require the help of a student loan lawyer also include:
- Your student loans have been or are being mishandled
- You’ve attempted loan rehabilitation and it was handled incorrectly
- Disputes over your loans require extra professional attention
While their reputation is better than many other federal loan servicers, many borrowers still have complaints about Nelnet. Take advantage of Nelnet student loan forgiveness options if you qualify; otherwise, refinancing your Nelnet loans may be the best repayment option available.