Nelnet reducing staff due to lower pricing and reduced DoE loan servicing

Nelnet announced a staffing reduction to address lower pricing and reduced servicing volume for the company’s federal servicing contracts as well as to align with the company’s strategic consolidation and sunsetting of select loan servicing systems. On March 22, Nelnet received a contract modification from the Department of Education for the company’s current loan servicing contracts with the Department, which decreased the price earned by the company per borrower per month. Additionally, last month, the Department notified Nelnet of its intent to transfer 1 million borrowers from Nelnet Loan Servicing to another federal servicer over the next few months. The transfer was not based on Nelnet’s performance. Both the price reduction and the unanticipated transfer of a million borrowers will have a material impact on NDS. Approximately 550 associates who work in Nelnet’s Diversified Services division and some in related shared services areas that support NDS were notified today their positions are being eliminated. Nelnet will also look for redundancies and efficiencies throughout the year related to the conclusion of projects centered on the consolidation of select loan servicing platforms. No other Nelnet businesses are impacted. Throughout the remainder of the year, the company will strategically continue migrating borrowers from legacy systems to platforms and then sunset the legacy systems, with the goal of creating ongoing efficiencies.