How to Avoid Common NelNet Servicing Problems

In our reviews and analyses of the various student loan servicing organizations, we found servicing problems to be common across the board.

Misapplied payments, reporting credit delinquencies on successful payments, provision of inaccurate information, and impairing debtor's chances of participating in income based repayment plans and debt forgiveness programs are only the beginning.

Almost all student loan servicing organizations have problems. It's the nature of large numbers. This includes Nelnet, currently the largest student loan servicing organization in the country.

But it does seem that Nelnet may be one of the better performers among the group. For an organization that large, the number of complaints against the company is low. Successful resolution of those problems is not at all uncommon.

But as we have with other student loan servicing organizations, let's see what the common NelNet servicing problems are, and how best to avoid them.

If you have a lot of student loans and want to know the best way to pay them off fast, you need a plan.

My friend Travis is a Student Loan Planner and he's created over a thousand custom student loan plans that will have you out of debt faster than you can imagine. He knows all the different programs, how they work together, and what you need to do to take advantage of them.

His average client saves a projected $59,000 over the life of their loans. If you want to find out more and see if a plan might help you, check out his service.

Who is Nelnet?

Founded in 1996, and based in Lincoln, Nebraska, Nelnet works with administration and repayment of student loans and educational financial services. Earlier this year, the company completed an acquisition of Great Lakes Educational Loan Services. That makes it the largest student loan servicing organization in the US.

Nelnet services $400 billion in loans, or about 42% of all student loans outstanding, and work with more than 5 million borrowers.

The company provides a variety of services to student loan debtors, including receiving payments, administering the transfer of loans, handling forgiveness and forbearance arrangements, and pursuing remedies on defaulted loans.

Common Nelnet Servicing Problems

Nelnet has been the center of controversy since the company started back in the 1990s. For example, a US Department of Education audit revealed that the company had used a loophole in federal tax legislation that allowed the company to receive a higher interest rate on certain loans. As a result, the company generated $278 million in additional revenue from taxpayers between 1993 and 2007. However the due to the loophole, the DOE allowed the company to retaextraitional revenue.

The specific issues with Nelnet are consistent with other student loan debt servicing agencies. They include misinformation, misapplied payments, reporting of credit delinquencies, and assessment of late payments.

The Better Business Bureau has 512 complaints filed against Nelnet, with the largest number (325) being for billing and collections and problems with product and services (154) making up the vast majority.

Complaints include:

“Tried to make payments for 7 months now and did as advised. Late fees have accrued despite hours on the phone trying to solve this. I noticed my payments stopped going through my bank account after ** years. I called to check on this and said “hey, I am supposed to be paying you guys and I am not.” There was quite a bit of confusion on the matter including some ramblings of “You have made overpayments and we stopped billing you for a few months” despite the fact those overpayments could not be found. I was told I did not need to start paying again for a few months so in a few months, I get a letter saying I am past due. I call again to make a payment, printed the receipt spent hours on the phone once again and still there was confusion of why my acct that was so smoothly consistent for ** years suddenly hit the brakes. For some reason, my efforts at making payments have failed for months now with no explanation of why. I have now collected late fees despite doing everything I have been told to do and actually being the one that was proactive in trying to keep the acct up to date when we noticed they were no longer autodrafting.”

The outcome was a partial settlement in the debtor's favor.


“Nelnet report me to credit bureau after payment was made before deadline I reached out to Nelnet prior to 90 day deadline to make arrangements for payment. I was told that if I brought account current I would not be reported. Not only was I reported, I was reported twice. ADDITIONAL DETAILS: Case is being handled by another organization: Consumer Protection Agency”

In this case, Nelnet fixed the issue in the debtor's favor and corrected the errors on their credit report.


“They made a mistake progressing my paperwork and now my credit is being effected and keeping me from getting myself and 3 children into a safe home. Last year I applied for an income driven repayment plan and was approved, my loan was transferred to Nelnet and my paperwork was not processed correctly which they admitted. When I realized my credit was being effected I called them and was told if I summit the paperwork showing I have the payment plan they would remove the negative marks from my credit. After a month they had not removed the mark which are the only things preventing myself and 3 children including one who is disabled from getting out of an unsafe home. When I called they told me there was nothing that they could do because they tried to contact me and I did not return their call in a timely matter.”

This situation was also resolved in the debtor's favor with corrected credit reporting.

Legal Action Pending Against Nelnet

A class action lawsuit was filed this past June alleging that Nelnet canceled a debtor's income-based repayment plan before the renewal deadline. The company then capitalized the debtor's accrued interest, adding almost $8,700 to her loan.

In addition, Investopedia lists NelNet, and the previously acquired Great Lakes ELS as the 3rd and 4th most complained about student loan servicers in 2017, with nearly 1,000 complaints filed with the US Government watchdog agency, the Consumer Financial Protection Bureau (CFPB).

Resolving NelNet Servicing Issues

Any effort to resolve NelNet servicing issues should begin with contacting the company itself.

Contact Nelnet by email or by phone at 888-486-4722, Monday through Friday, from 7:00 am to 2:00 am, and Saturdays, 8:00 am to 7:00 pm.

If that doesn't work, you can file a complaint with the Better Business Bureau. NelNet appears to watch complaints and try to fix them.

Based on complaints and resolutions reported by the Better Business Bureau, the company has a better record on resolving problems than other student loan debt servicing organizations.

If you're not making any progress in resolving your issue with Nelnet, contact the US Department of Education's Office of the Inspector General (OIG) in one of three ways:

Attempting to change loan servicers is not a viable option. The only way to do that is to either refinance your current loan, or do a loan consolidation. Either way, you run the risk of forfeiting important government benefits, like an income-based repayment plan, or loan forgiveness. As well, it's possible that even if you refinance you'll end up back with NelNet. And even if you go with another agency, none of those have a clean record either.

How Do You Know if NelNet is the Servicer for Your Student Loan?

It's not always possible to know exactly who your loan server servicer is, because they often go by different names. But to determine if NelNet is your servicer, start by checking the Federal Student Aid site, using your FSA ID. Investigate the details of the loan, including the current servicer. That will tell you if it's NelNet or one of the other servicers. If no record of your loan appears on the FSA website, the loan is private.

If it is a private loan, pull up your latest loan statement and find the servicer, and if it's NelNet, proceed accordingly.

What Has Your Experience with NelNet Been?

Do you have a story about a servicing problem with NelNet? If you do, please share your story with me and with others. Also let us know if you were able to fix the problem and how you did it.

It will be encouraging for others to know that resolution is a possibility. Based on our research, that seems to be a definite possibility with this servicer.

Other Posts You May Enjoy:

About Kevin Mercadante

Since 2009, Kevin Mercadante has been sharing his journey from a washed-up mortgage loan officer emerging from the Financial Meltdown as a contract/self-employed "slash worker" – accountant/blogger/freelance blog writer – on He offers career strategies, from dealing with under-employment to transitioning into self-employment, and provides "Alt-retirement strategies" for the vast majority who won’t retire to the beach as millionaires.

He also frequently discusses the big-picture trends that are putting the squeeze on the bottom 90%, offering workarounds and expense cutting tips to help readers carve out more money to save in their budgets – a.k.a., breaking the "savings barrier" and transitioning from debtor to saver.

Kevin has a B.S. in Accounting and Finance from Montclair State University.

Opinions expressed here are the author's alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.

Reader Interactions


About the comments on this site:

These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

  1. Jedediah Gallagher says

    Nelnet will not process my payments that I have set up with my checking account. I set up automatic payments several times and I have set up manual payments several times. They keep not being processed. Their customer service rep said that my bank must be rejecting the transactions. I spoke to my bank (Bank of America) and they said that they never received any payment request. I know that I gave Nelnet the correct account information (I double checked every time I set up a paymeny), and I know I had sufficient funds to complete the transaction. I will call their customer service one more time, and this time I will make sure to speak to a manager. If they continue to not accept my payments, I will contact the BBB.

    Thanks for the advice!

  2. Nancy Kittelsen says

    I was awarded a 5500 loan when applying to FAFSA. We have no record of signing up for it. We will contact the college to see if it was ever paid.
    Nelnet claimed they have sent us statements once a month for the past 5 years, and we NEVER received a statement. Now they have passed the “loan” to collections.

  3. Ashley says

    I’ve been having major issues with Nelnet being able to process my loan payments. My repayment plan started in December of 2018. I was able to make a $400 payment using my bank information for December. I called in January 2019 to process my payment. The advisor informed me the payment would be processed in a couple days. I called in February 2019 to make the same $200 payment. The advisor informed me the payment would be processed in 3-4 business days again. I called in March 2019 to make my $200 payment like usual. This time the advisor informed me my payments had been returned and I owed $666.99. I was told there must of been an issue with my bank and needed to check with them why my payments were returned. I went to my bank ( Navy Fed) and they were able to pull up my account and ensure me no action was taken from Nelnet to process my payments. I called into Nelnet while I was at the bank and tried to pay off the $666.99. The advisor told me the payments should be processed by 03/11/19, if not call back. Today is 03/11/19 and still no payment has been processed. I called Neltnet to inform them the payment wasn’t processed and I have no idea what else to do. The advisor Maddie was extremely rude with me informing me that it must be my fault why the payments aren’t being processed. She said I was either reading the account numbers wrong, my bank was denying the payments, or I had insufficient funds. None of those were the issue, but she had no other answers as to why my payments weren’t processing. I explained to her that I had called in a week ago and had this same exact conversation with another advisor and wished to talk with him. Maddie refused saying she could help me. I told her I was reading my account and routing number exactly from the paper my bank had written down for me, WHEN I WENT IN TO HANDLE THIS ISSUE!! It was also the same information used from the December payment. So it should work. At this point Nelnet and it’s employees are extremely unprofessional, rude, and want to blame everyone else but themselves. I asked if it could be Nelnets processing systems that aren’t working correctly ? They said no and tried to process my payment again. I have funds in my bank account and I just want to pay off my student loans before they jack up the interest rate for late payments. The weird thing is my debt card has worked everywhere else. Nelnet is awful and does a horrible job of helping. At this point my student loan payment won’t be processed and I won’t be paying them until they can figure it out. I just want my payments to go through and they can’t seem to figure it out other than blaming the bank or me.

  4. Robert Wallace says

    I had almost the identical problem with a comment I read here.
    I was reported 90 days delinquent to the credit bureaus never missed a payment since 2013 and had a cred score of 762 and a Fico of 759. Score dropped to 616 after they reported me. My account was current and is current now and not due a payment till 3/28/20 and they reported me again.
    Now I have to get on the phone and fight this tomorrow.
    Terrible situation to deal with over the weekend when there is no one to call about this.
    All of my bill have a 100% payment history for years never missed a mortgage payment and they did this .

As Seen In: