Nelnet Student Loans: Common Complaints and Alternative Options

Nelnet Student Loans: Common Complaints and Alternative Options

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If you have federal student loans, it's likely your servicer is a company called Nelnet. After acquiring Great Lakes in 2017, the company is now one of the largest servicers used by the Department of Education. Compared to other student loan servicing companies, Nelnet seems to be an adequate servicer with relatively low complaints. However, it has still received a lot of negative feedback from borrowers and was in a class action lawsuit for allegedly canceling a borrower's income-repayment plan before the deadline to renew. Read on to find out more about Nelnet, how to deal with the common problems borrowers face and how to switch loan servicers.

Nelnet Student Loans Review

Nelnet Inc. is a huge company with multiple divisions, including Great Lakes Higher Education Corp. and Firstmark Services. So even if your student loans aren't directly serviced by Nelnet, your loans could be handled by another company owned by it. Nelnet also manages the Total Permanent Disability discharge program, which is where you can get your loans canceled if you are permanently disabled.

Overall, Nelnet isn't the worst loan servicer out there, based on consumer complaints and ratings. It has earned a B from the Better Business Bureau (BBB), and the Consumer Financial Protection Bureau database has significantly fewer complaints filed on this company than Navient and AES/PHEAA. It also hasn't had many lawsuits in the past, besides one filed by a borrower in 2017 and one in 2010. According to the lawsuits, Nelnet cancelled a borrower's income-driven repayment plan and made false claims in order to receive government subsidies.

However, on top of the lawsuits, Nelnet has its fair share of complaints. Many borrowers have trouble with how their payments are handled, receive incorrect information about their loans and complain about customer service. If you're one of those borrowers, contact Nelnet right away with the issues you are having, and reach out to a third-party service such as the CFPB and the BBB. And if you want to switch servicers, your best option is to refinance your loans, which will mean getting a new loan servicer.

Repayment With Nelnet Student Loans

Nelnet offers multiple ways for you to pay your student loan bills, including auto debit, mobile app, online portal, mail, online bill pay through your bank, or through your phone. The easiest repayment options are setting up automatic payments and using Nelnet's online portal. You can even set up texts that alert you when your statement is available, your payment is due or when the payment is past due. You'll need to create an account with your personal details, including your Social Security number.

With all federal loan servicers, you'll have eight different repayment plans to choose from. If you don't apply or qualify for the other repayment options, Nelnet will automatically enroll you in the standard repayment plan, which has fixed payments over 10 years. You should explore the other repayment plans because they may help you manage payments and qualify for public service loan forgiveness (PSLF).

How to Switch to a New Student Loan Servicer

When you get a federal student loan, you are not able to change student loan servicers unless you consolidate your loans with the Department of Education or qualify for public service loan forgiveness (PSLF), in which case your loan would be serviced by FedLoan. Other than that, you will be stuck with your federal student loan servicer up to your loan term, which can be at most 25 years depending on your repayment plan. The only way to actually change your servicer is to refinance your loan with a private lender. Below, we found some of the best options for you to consider if you want a new servicer.

Before you refinance to get away from Nelnet: Refinancing a federal student loan may result in higher interest rates, and you will lose certain protections and payment plans that come with federal loans. For these reasons, we don't suggest this change unless you are financially secure and are aware of the federal loan protections and benefits you'll lose.


  • on Earnest's secure website
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Earnest is a great option for borrowers who want to change student loan servicers, as the borrower services its own loans. This ensures you get the same service you received when applying for the loan. The company earned an A+ rating from the Better Business Bureau and is great for borrowers who want repayment flexibility, as you can set your own monthly payment and loan term. It's important to mention that Earnest was acquired by Navient; but for now, the company continues to operate separately.


  • on SoFi's secure website
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SoFi is one of the best private refinancing lenders because it offers competitive rates, deferment for medical students in residency and employment help. If you lose your job or want new employment while using the lender, SoFi provides borrowers with career coaches and networking opportunities. Unlike Earnest, SoFi does not service its own loans. The loans are serviced by MOHELA, which received an A+ rating from the Better Business Bureau and garnered few CFPB complaints.

If the private lender you are considering doesn't offer a lower interest rate than you currently have, it's best to stay with your federal loan servicer. Also, it's important to remember that refinancing does not guarantee you will receive better service. Based on a CFPB report, nonfederal student loans generally receive more complaints than federal student loans.

Nelnet Customer Service and How to Submit a Complaint

If you're having trouble with Nelnet as your servicer, check out these websites to file a complaint.

FSA Feedback System: The Federal Student Aid Feedback System allows you to submit complaints about your student loan servicer, report suspicious activity and give positive feedback about federal student loans. To file a complaint, you must describe your issue, explain how you would like it to be resolved, and provide any other relevant information or documents. The Federal Student Aid office will look over your submission and send a response as quickly as it can.

Consumer Financial Protection Bureau (CFPB): The CFPB, another federal website, allows you to submit a complaint about any company you are having problems with. The website boasts that 97% of consumers receive a timely response to their issue. To submit an issue, you will answer a few questions to categorize your complaint and then explain what happened with the company. After you submit, your complaint is forwarded to the company and it has 15 days to respond and up to 60 days to give a final response.

Better Business Bureau (BBB): The Better Business Bureau works to resolve issues consumers are having with businesses. To file a report with the bureau, you'll provide your name, address and email and describe the problems you are having with the servicer. The BBB will send your report to the business and ask for a response within 14 days. If the company doesn't respond within that time, the BBB will try to contact it again. According to the BBB, complaints are usually closed within 30 days.

Before contacting any of these third parties, you should reach out to Nelnet to see if it can resolve your issue. Only if you believe your loans aren't being handled properly should you use the websites mentioned above. Nelnet can be reached by phone, email, postal mail and through its social media accounts. The servicer also has an FAQ section that you should look at before contacting the company, as it answers the most common questions the company receives.

Contact Information

Common Problems With Nelnet Student Loans

Compared to other loan servicers, Nelnet hasn't received nearly as many complaints through the CFPB as Navient or AES-PHEAA. In our study, we found that the servicer received only 585 complaints between March 2017 and March 2018, compared to Navient's 3,599 complaints. Still, Nelnet is not free of complaints and only earned a B rating through the Better Business Bureau. Some of the major complaints of Nelnet include:

Trouble with how payments are being handled: Many borrower complaints have to do with changing their payment. In some cases, borrowers get married, try to change their repayment plan or allocate payments to a certain loan, and somehow Nelnet fails to fix payments accordingly. When working with any servicer, it's important to keep track of your payments each month even if you sign up for auto pay. Also, try to notify the servicer of changes ahead of time by talking to a representative to ensure no complications. Document who you spoke with; and if you can, get a confirmation of the changes over email.

Receiving bad information about a loan: Borrowers have had problems receiving incorrect information about their loans, where information from a representative and the information on the borrower's account fails to match up. This is why it is important to keep records of your payments and conversations, especially when you are trying to make a change with the company. Nelnet handles a lot of borrowers, and unfortunately, you'll need to go the extra step of making sure that your loans are handled the way you want.

Having problems with customer service: Many borrowers claimed that after speaking with a representative, their account didn't reflect any changes or they have to call multiple times and get different responses for what to do. Again, document these responses and have Nelnet send you a confirmation, if possible. Also make sure that you are speaking with a representative of Nelnet. One borrower had her information stolen after talking with a loan officer from a company pretending to be Nelnet.

Madison is a former Research Analyst at ValuePenguin who focused on student loans and personal loans. She graduated from the University of Rochester with a B.A. in Financial Economics with a double minor in Business and Psychology.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.