If you’re working to repay your federal student loans, there’s a decent chance you’ve been assigned to Nelnet student loan servicing. After all, this $380-million-per-year company services federal loans for over five million people. That’s about 1.5% of the entire U.S. population with Nelnet student loan payments!
If Nelnet is your student loan servicer, you’re pretty lucky (believe it or not). You dodged a bullet and avoided some of the loan servicers with the worst reputations, like FedLoan and Navient.
When it comes to student loan servicers, Nelnet seems to be right in the middle: there aren’t a whole lot of bad complaints about them, but there also aren’t a whole lot of shiningly-positive things to say either. They’re the white bread of the student loan servicing world, as are its other servicing branches.
Still, that doesn’t mean you can coast and trust that Nelnet is a pure, golden fairy godmother with your best interests at heart. We talked with real people who work with Nelnet too to see what their experiences have been, and what you need to know when working with them. We’d like to hear from you, too: what has your experience been with Nelnet student loans? Drop us a line in the comments below.
As if Nelnet wasn’t already big enough, they’ve grown even larger after purchasing every last share of stock in Great Lakes, another student loan servicer, in early 2018. To top things off, they even paid $150 million for the new company — in cash.
Now that these two giants are merged, they control loan servicing for a total of 16.2 million people, or about 5% of the entire U.S. population.
Why the merger now? We’re not sure, but this snippet from a PR release might contain some interesting tidbits for borrowers:
Nelnet and Great Lakes have also been working together for almost two years to develop a new, state-of-the-art servicing system for government-owned student loans through a joint venture. The servicing platform under development will utilize modern technology to effectively scale for additional volume, protect customer information, and support enhanced borrower experience initiatives. The efficiencies gained by leveraging a single platform for government-owned loans supporting millions of more borrowers will give Great Lakes and Nelnet opportunities to invest in strategies to further enhance borrower experiences.”
On one hand, this might mean that dealing with Nelnet will become more of a mass-produced, cookie-cutter factory operation. It might be harder to get help if you’ve got a unique need or situation or need help with your Nelnet student loan payment.
On the other hand, if you’re optimistic, you could say that these new “strategies to further enhance borrower experiences” will make dealing with Nelnet even easier.
Only time will tell.
Survey Results Say…
It’s helpful to look at big-picture data when assessing how good a student loan servicer is on the surface. That’s why we conducted a student loan servicer survey in July 2018 to find out how good loan servicers are at helping people repay their loans. We received a total of 386 responses, 14% of whom were currently assigned to Nelnet.
Overall, Nelnet fell somewhere in the middle of all the student loan servicers. Nelnet received 3.3 out of 5 stars.
85% of people with Nelnet had to contact them at some point about their loans. Of those people, a whopping 62% of respondents said that Nelnet either “did not,” or only “somewhat” resolved their issue. This means that only a minority of people — 38% — actually had their problem solved by Nelnet.
It’s worth noting that Nelnet student loan advisors only make an average of $13 per hour, according to Glassdoor. There’s not a whole lot of financial incentive there for employees to go the extra mile to help you figure our your Nelnet student loan payment — or any other problem.
In fact, that leads to one of the biggest complaints against the company…
Expect Different Advice From Different Nelnet Customer Service Reps
This is the single biggest complaint that we heard from people by far. And it’s not just Nelnet — this is a problem with all the student loan servicers out there.
It depends on which you get as the representative. Some are good and will take the time to research your answers, others will stick to the script and be pretty much useless.” — Anonymous
One of the things Travis suggests when you need advice is to give it the “two-call test.” Call up one day and get the answer to your question, and then wait a day or two and call back again to get a different rep.
If both Nelnet reps are giving you the same answer to the question, then chances are it’s correct. You probably don’t need to do this for every last little detail, but you definitely want to make sure you’re getting the right advice for big important questions, like what paperwork you need to file to qualify for repayment plans or which repayment plan might be right for you.
Sometimes There Can Be Long Wait Times
Student loans are confusing, and people need answers. Nelnet is a company that seeks to limit costs by hiring the minimum number of people needed to answer those questions.
Thus, sometimes you might have a long wait time if you need to call them up and ask them a question. This can be really inconvenient if you’re calling them on your limited lunch break, for example.
Some Nelnet customer support reps can be very helpful
Not all things people had to say about Nelnet student loans were bad.
In fact, it seems that there are quite a few reps at Nelnet who really try and go the extra mile to help people out. Not everyone gets stellar service, but at least you can rest assured that a good-hearted individual might be picking up the phone when you call.
At the end of my fourth year in med school, I was trying to learn everything I could about student loans and called Nelnet probably 3-4x/week. All of my experiences with them were excellent. They were able to explain my account to me in a way that made sense, and gave me accurate information about grace period and how to consolidate loans so that I’ll still qualify for PSLF and end the grace period early. One representative even suggested that I apply for PSLF, not knowing that I was already aware of the program. This is why I was so hesitant to submit the PSLF form, since it’d transfer my account over to FedLoan.” — Phinga D.
Note: if you apply for PSLF, you’ll automatically be transferred over to a new servicer: FedLoan. It’s just about the only way possible to switch student loan servicers voluntarily, however, this loan servicer has a much worse reputation than Nelnet.
Double Check That Any Changes Nelnet Makes To Your Account to Make Sure It’s Accurate
Like we said — there are many good account reps at Nelnet, but there are still enough bad ones that there’s a chance your loan could fall through the cracks. That’s what happened here:
“When I was in residency I contacted them multiple times to defer payment. They did not understand what I was talking about and instead put a forbearance on the account which incurred capitalization of interest. I contacted them multiple times and this was done every time. By the end they had to undo all that was done. But they didn’t remove all the capitalized interest and thus I was stuck it an extra fee. I wish I could tell you the exact numbers but by the end they were so confused themselves. My best guess is that it could be a few thousand bucks.” — anonymous
Again, this just highlights how you need to be really vigilant and on your toes when dealing with student loan servicers.
Pro Tip: Try Nelnet’s Online Chat and App
One thing we heard from multiple people was that Nelnet’s online chat feature was way easier to use. Rather than sitting on hold and twiddling your fingers while waiting on the phone, you can open a chat window and do other things.
I have only had mediocre customer service. I feel that I’m always on hold forever and I never get a clear answer and end up having to do all the research to my questions on my own. The only decent thing about Nelnet is their app is user friendly.” — anonymous
I sent an email/contact form for questions regarding consolidation. The reply was generic and largely useless. I then used the live chat feature and my questions were answered fully in a matter of minutes. The chat was a far superior means of communication in my opinion.” — Dustin Morgan
Using the app or the online chat feature also has another side benefit: it’s written communication, so you can copy and paste it to keep track of your correspondence with Nelnet.
If you call them up, on the other hand, the laws get real fishy about whether you can record a conversation without their consent. And in my experience, when you ask the customer service reps at any company whether you can record them, that’s the fastest way to get them to decline to talk to you.
Nelnet Student Loans FAQs
Can you pay Nelnet student loans with a credit card?
Sadly, no. Nelnet student loan payments can only be made using your bank account. You can either write a check and send it in (make sure to write your complete Nelnet account number in the memo section, even down to the last “D,” J,” or “E.”), or link your bank account so that you can make automatic payments or one-off payments.
Are federal student loans forgiven after 25 years?
While it would be awesome if automatic Nelnet student loan forgiveness were a thing, unfortunately, it’s not.
You can have your student loans forgiven after 20-25 years in some cases if you’re already on a certain repayment plan (ICR, IBR, or REPAYE). Everyone starts out on the standard 10-year repayment plan which doesn’t offer forgiveness, so if you’re interested in pursuing this route, you’ll need to switch over to these programs if you’re eligible. You may also be able to lower your Nelnet student loan payment this way. See here for more facts about student loan forgiveness.
Are federal student loans based on credit score?
No. Your credit score doesn’t factor into the interest rate you get on your federal student loans at all, regardless of if you pay it off according to the standard repayment plan, an income-driven repayment plan, or if you consolidate your loans.
The one exception is federal PLUS loans made to parents and grad students, but that’s just to make sure you don’t have an “adverse credit history.”
If you do decide to refinance your federal student loans with a private student loan company, they most certainly will check your credit score and adjust your interest rate accordingly. It’s just one of the many factors you need to consider when deciding whether to refinance federal loans into private loans.
What Can You Do If You’re Not Happy Working with Nelnet?
Unfortunately, you don’t get to pick and choose your loan servicer. If you’re unhappy with Nelnet student loan servicing, your options are somewhat limited.
Pay off your student loans early
Of course, the best idea is to just pay off your loans as fast as possible and throw everything you can at your Nelnet student loan payments. We know; it’s easier said than done. If it were easy and simple, everyone would be out of debt in a heartbeat.
But if you can scrimp and save and side hustle to earn more money, you’ll have more cash to pay off your student loans. Every dollar you pay towards your loans early means you’re just that much closer to being done with Nelnet — and student loans entirely — forever.
File a complaint with the Nelnet ombudsman
If you need to file a complaint about Nelnet, you can do so with the Nelnet ombudsman. Here’s the Nelnet phone number, address, and email address:
Nelnet Guarantor Solutions
P.O. Box 82561 Lincoln, NE 68501-2561
Phone: (888) 486-4722
Refinance Your Nelnet Student Loans
If Nelnet really gets your goat and you absolutely can’t stand working with them anymore, refinancing your student loans with a private student loan company is another option.
This requires a lot of caution, however. It’s not something to jump into without seriously thinking it through (unlike that time you overdid Taco Tuesday). When you refinance your federal student loans with a private lender, they’re no longer federal student loans — they’re private student loans, and that means they come with way fewer protections and benefits.
For example, if you’re shooting for PSLF or any other student loan forgiveness program, you’re no longer eligible for forgiveness once you refinance. You also aren’t eligible for any income-driven repayment plans, and possibly even financial hardship forbearance, depending on how nice your new lender is. Unlike with your Nelnet student loan payment, you won’t be able to get any help unless you’re in dire straits — and possibly not even then.
However, if none of those protections are important to you, refinancing might be a good option. And if you can get a lower interest rate when you refinance, you could even kill two birds with one stone: get a cheaper loan, and dump Nelnet.
Hire Travis or Rob For a Student Loan Consult
Let’s be clear. Nelnet’s job isn’t to help you find the best ways to deal with your student loans. Their only job is only to minimize the amount of people who default on their loans across the millions of loans they service.
That means there’s plenty of room for you to fall through the cracks, get bad advice, and yes — you probably already know it by now — get different advice and information from multiple different Nelnet customer service reps who aren’t as familiar with repayment options as they should be.
Remember, they only make $13 per hour. They’re good people, but ask yourself: would you be motivated to dedicate yourself to the intricacies of understanding student loans if you were being paid that much? Or, what if you happened to just get a Nelnet rep on their off day?
Instead, Travis and Rob have experience working with all kinds of people to find the best solutions for their student loans.
Rather than just trust someone whose only job is to make sure you don’t default, why not hire them to help make sure you’re actually on the right plan to meet your student loan payoff goals?
We want to hear from you!
What has your experience been working with Nelnet education loan servicing? Have they really helped you in some way, or screwed you over in others? Let’s start a discussion below. Looking forward to hearing your thoughts!