Each fall, newly minted college graduates around the country begin making payments on their student loans. About 1 in 5 of those payments go to Nelnet, one of the largest companies that services federal student loans. Nelnet contracts with the U.S. Department of Education to manage borrowers’ repayment progress. If you have student loans serviced by Nelnet, it’s good to know what to expect in terms of options, benefits and customer service.
Nelnet (short for National Education Loan Network) is the fourth largest company that services federal student loans, behind AES, Great Lakes, and Navient. The firm, which is headquartered in Lincoln, Nebraska, was founded in 1978. Today, Nelnet handles about 18% of the U.S. Dept. of Education’s direct loans, serving almost 6.6 million borrowers with debt totaling $169.9 billion. It also services loans from private lenders including Citizens Bank (through Nelnet subsidiary FirstMark Services).
Nelnet is a publicly traded corporation with more than 50 subsidiaries in the United States and Canada. Besides FirstMark, its holdings include: Payment Spring, Peterson’s publishing, First National Life Insurance, inTuition, infiNet, LoanSTAR, and TriCura Canada. Recently, Nelnet formed a joint venture with Great Lakes to bid on a massive contract to create a single platform for all U.S. Department of Education loan servicing. The combined entity, called GreatNet, is one of three vendors being considered for the job. The others are Navient and AES/FedLoan.
Companies like Nelnet have almost as much power as the government when it comes to managing your student loans. Like all servicers, Nelnet sends monthly bills, processes and applies loan payments, and helps borrowers choose a repayment plan. It also deals with requests for deferment or forbearance and certifies borrowers for loan forgiveness. If borrowers fall behind on their payments, the company reports it to credit bureaus.
Nelnet has a comprehensive website that divides the student loan life cycle into three stages – in school, in grace period, and in repayment – with clear options and instructions for each. It also has a mobile app that is available on iPhone and Android. You can sign up for text alerts to avoid late payments.
Nelnet’s website has a “Get Financially FIt” page with resources, worksheets and tips. It also has a unique payment feature. For borrowers with more than one loan being serviced by Nelnet, there is a “Pay by Group” option lets you sort loans by interest rate, balance, due date, and so forth. When making your payment, you can select how much money goes to each group of loans.
Account holders can follow Nelnet on Facebook and Twitter to get timely tips and insights. The company claims to answer any questions posted to social media within 24 hours. Nelnet also places a lot of emphasis on preventing identity theft. Its website has tips and extra security measures to help borrowers protect themselves. However, like many other federal loan servicers, Nelnet has been the subject of numerous consumer complaints.
Most college grads are automatically enrolled in the standard repayment plan, with fixed payments over 10 years. But you can change that if you like. Like all federal student loan servicers, Nelnet offers a prescribed set of repayment options dictated by the U.S. Department of Education. They include graduated payments that start small and increase at set intervals; extended repayment over 25 years; and income-driven plans that cap payments at 10-20% of the borrower’s discretionary income.
The first step if you’re having trouble making your student loan payments is to contact the servicer. Nelnet’s customer service is reachable by website, phone, email, snail mail. If you’re unemployed, underemployed, or experiencing financial hardship, you might qualify for forbearance or deferment. Income-driven plans can lower your payments. You can also pay less each month if you extend the term of your loan. There are several measures that can help ease the stress in the short term, but most will keep you in debt longer and increase the total amount of interest you’ll pay. Servicers like Nelnet cannot lower your interest rate.
One of the most powerful tools to help student loan borrowers eliminate their debt is refinancing. If you’re paying more than 4% interest on your loans, chances are you could get a better deal by shopping around with private lenders. College graduates who are working full time are in a strong position to renegotiate the terms of their loans, potentially locking in a lower interest rate and shaving thousands of dollars off of their total repayment. In a recent analysis we found that people who refinanced with private lenders saved an average of $259 a month and $19,231 over the life of their student loans.
If you have multiple student loans, you can also consolidate them into a single monthly bill – simplifying your finances, reducing your chances of missing a payment, and making it easier to see your progress as you pay down your debt. It’s easy to find out if refinancing or consolidation can save you money. Most modern lenders have online applications take less than 5 minutes, and can give you instant results with no impact to credit.
Wondering if you could be getting a better deal on your student loans? Find out now with the top lenders listed below...
Office Hours: Open 24/7
P.O. Box 82561
Lincoln, NE 68501-2561
Works with 275+ not-for-profit community lenders for higher approval chances
LendKey operates student loan programs for over 275 not-for-profit and community lenders across the country. By partnering with these lenders, LendKey is able to give consumers direct access to the best rates available from the most borrower friendly institutions. As the servicer of all loans obtained through its platform, you can rest easy knowing your personal information will be safe and that the best customer service team will be ready to answer your questions from application until your final payment.
Offers unemployment protection and career/coaching/networking
SoFi, which stands for “Social Finance,” was created by a group of Stanford business students who found themselves with a mountain of debt after graduation. They set out to change the student loan industry and help borrowers like themselves to get lower interest rates. SoFi has some of the lowest interest rates and, unlike the other lenders we reviewed, it has no maximum amount you can finance. However, Nevada residents can’t currently refinance with SoFi. Minimum loan balances are higher in Arizona, Massachusetts and Pennsylvania due to state laws. Additional state restrictions may apply.
For every loan they fund, they contribute to the education of a child in need
CommonBond was founded in 2011 by three MBA graduates from the University of Pennsylvania’s Wharton School who wanted to help their peers escape from high-interest student loan debt. Its original focus was on grad students, but it has since expanded to cover undergrads as well.
Of all the companies we reviewed, CommonBond has some of the best customer service. The company prides itself on being easy to reach by email, phone, or live chat. It offers networking events, expert panels, insider newsletters, and even has a program help borrowers who lose their jobs to find new ones. CommonBond also makes you feel good about choosing to refinance with them by donating money to an education nonprofit for each loan they write.
Get a personalized review of your refinancing options with CommonBond today.
Earnest empowers people with the financial captial they need to live better lives.
Using technology, data, and design to build affordable products, Earnest's lending products are built for a new generation seeking to reach life's milestones. The company understands every applicant's unique financial story to offer the lowest possible rates and radically flexible loan options for living life.
Click here to apply with Earnest and to see how much you can save.
Operates in all 50 states; 2nd largest student loan refinancing lender
Laurel Road is a national online lender with customers in all 50 states, the District of Columbia, and Puerto Rico. Many of our non-bank competitors are not able to lend in all 50 states.Laurel Road has grown to be the second largest player in the student loan refinancing space in large part because of our reputation as the go-to low rate provider.
Special offers for medical resident and fellow refinance products
Splash Financial is a leader in student loan refinancing with new rates as low as 3.25% fixed APR which can save you tens of thousands of dollars over the life of your loans. No application or origination fees and no prepayment penalties. Splash Financial is in all 50 states and is intensely focused on customer service. Splash Financial is also one of the few companies that offers a great medical resident and fellow refinance product. You can check your rate with Splash in just minutes.
Click here to see more of Splash's offerings and to see how you can save money.