Nelnet will keep a significant piece of business that it had been in danger of losing for at least two more years.
The Lincoln-based financial services company revealed Monday in a securities filing that the U.S. Department of Education has extended its loan servicing contract until Dec. 14, 2023. The contract had been scheduled to end Dec. 15 of this year.
Nelnet, which has serviced federal student loans since the government took over their origination in 2009, was set to lose the business after the department under the Trump administration had sought to reorganize the way servicing has done.
By granting the two-year extension, the Department of Education exercised a clause in existing contracts. It's not clear what Nelnet's long-term prospects are in relation to federal student loan servicing, but CEO Jeff Noordhoek said the two-year extension gives President Joe Biden's administration time to decide how it wants to proceed after it canceled the planned reorganization.
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As of June 30, Nelnet said it was servicing more than $506 billion worth of student loans, the vast majority of which are government-insured loans. Though the company has greatly diversified itself over the past decade, loan servicing made up about 14% of its net income in the second quarter.
Now, Nelnet could be in line to service even more federally insured borrowers going forward because two other servicers have voluntarily ended their contracts.
The Department of Education has said it will transfer borrowers who were serviced by FedLoan Servicing and Granite State Management by next year. Granite State has already announced that its borrowers will be transferred to another company, but FedLoan Servicing has not yet said where its borrowers will be transferred.
Navient, the former Sallie Mae, also on Tuesday announced it plans to end its servicing contract and is seeking to transfer its borrowers to another company called Navient.
Noordhoek said Nelnet, however, has no plans to get out of the servicing business
"We've been in the servicing business for 40 years," he said. "It's a business that we really love. It's the core of what we do."
"So, yeah, we're all in, and we're very happy to extend the contract."
The 10 tallest buildings in Lincoln
10. Wells Fargo Center
The Wells Fargo building is listed at 148 feet tall by Emporis, although a 1976 Journal Star article lists the height at 173 feet.
9. Terminal Building
The Terminal Building at 10th and O was built in 1916. It is 10 stories and 150 feet tall.
8. Georgian Place
Georgian Place (pictured facing northeast) houses a portion of the downtown YMCA at 11th and P Streets. The apartment building is 11 stories tall and 152 feet. It was built in 1926.
7. University Towers
University Towers, originally known as the Stuart Building, is 13 floors and 158 feet tall. It was completed in 1929. It stands at 13th and P streets.
6. Abel Hall
Abel Residence Hall at the University of Nebraska-Lincoln is estimated to be 161 feet tall.
5. Sharp Building
The Sharp Building, 206 S. 13th St., is 16 floors and 166 feet tall. It was built in 1927.
4. Graduate Hotel
The Graduate Hotel at 9th and P streets is an estimated 198 feet tall.
3. U.S. Bank building
The U.S. Bank building was built in 1969 at 13th and M streets. It is 20 stories tall and 220 feet high.
2. Lied Place
Lied Place Residences is a 20-story retail, office and residential project on the north side of the Que Place Garage at 12th and Q streets. The building is 250 feet tall.
1. State Capitol
The Nebraska State Capitol dominates the skyline in Lincoln, including looking west from 28th and J streets. The Capitol has 15 floors above ground and is 400 feet tall. It was completed in 1932 after 10 years of construction; the cost was $9.8 million in 1932 dollars.
The Capitol stays Lincoln's tallest building because the Lincoln Municipal Code puts height restrictions on structures within the Capitol Environs District.
Reach the writer at 402-473-2647 or molberding@journalstar.com.
On Twitter @LincolnBizBuzz.
Matt Olberding
Business reporter
Matt Olberding is a Lincoln native and University of Nebraska-Lincoln graduate who has been covering business for the Journal Star since 2005.
