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Student Loans

Nelnet Student Loans Review: Ins and Outs of the Loan Servicer

Nelnet is one of the largest federal student loan servicers.

  • It works on behalf of the U.S. Department of Education.
  • It offers solutions if borrowers have trouble paying.
  • The servicer processes payments for federal student loans.
  • Customer support from Nelnet is below average.

About Nelnet

Founded in 1978, Nelnet is a student loan servicer based in Lincoln, Nebraska, with a clear mission to help families plan, prepare, and pay for their education. Nelnet has assisted with the administration and repayment of student loans for decades.

Nelnet handles federal student loans on behalf of the U.S. Department of Education as well as private student loans. It aids borrowers in managing their loans, making on-time payments, and navigating the ins and outs of loan forgiveness programs or other repayment plans. 

Nelnet doesn’t originate loans or determine eligiblity for them. Instead, it acts as a servicer for loans from the federal government and other entities. In this review, we focus on Nelnet’s federal student loan services, but you can check out our review of Nelnet Bank’s private student loans if that’s what you’re looking for.

Nelnet’s federal student loans

As one of the largest servicers of federal student loans, Nelnet stands out for managing various loan types. Here, we delve into the specific terms, rates, and features of the following loans to help you understand what Nelnet offers. (You can follow each link below for our guide to that type of loan for more about eligibility information and specific terms.)

Keep reading for more about Nelnet’s student loan policies.

How do you repay federal student loans from Nelnet?

Repaying a student loan is as significant as getting one. Federal loan servicers such as Nelnet offer a variety of repayment plans, each with different terms to accommodate borrowers’ diverse financial situations. 

Not all student loans have the same repayment terms because they’re tailored to suit the borrower’s financial capacity and loan type.

When does repayment begin?

The repayment journey for federal student loans begins after you leave school or drop below half-time enrollment. For all federal student loans except Parent PLUS loans, in-school payment is deferred, and repayment begins after a six-month grace period.

For Parent PLUS loans, repayment begins after funds are disbursed and a grace period doesn’t apply, although borrowers may request deferment.

Here’s an at-a-glance breakdown of the details:

In-school repayment optionsGrace period
Repayment is automatically deferred on all federal loans, except for Parent PLUS loans, which default to immediate principal and interest repayment. (Parent PLUS borrowers may request deferment.)Automatic 6-month grace period (doesn’t apply to Parent PLUS loans unless the borrower requests deferment).

You’ll make payments to Nelnet if it services your account. You can set up an online account on its website before your repayment period begins. Nelnet will contact you before your first payment is due to help ensure everything goes smoothly with your first payment. 

How long does repayment last?

The repayment length on your loan can vary depending on your repayment plan. Nelnet will place you on the standard 10-year repayment plan, but you can change it—multiple times during repayment if you want to. 

The table below outlines the repayment options for each type of federal student loan. (See below the table for images from Nelnet’s website to illustrate how several of the plans below work.) Remember: Paying off your loan as fast as possible will reduce your total costs, but it means higher monthly payments. 

Repayment plansDescription
Standard repaymentFixed payments with a 10-year term.
Graduated repaymentPayments start lower and increase every 2 years, within a 10-year term.
Extended repaymentFixed or graduated payments extended up to 25 years for eligible borrowers.
Income-driven repaymentPayments are based on income, family size, and state of residence, recalculated each year.

These explanations are simplified. The specifics of each plan can depend on additional factors, such as the type of loans you have and when you borrowed. Always consult your loan servicer for details.

Here’s a closer look at how several repayment plans work:

How the standard repayment plan compares to the graduated repayment plan
Nelnet Standard Repayment Plan Chart

Source: Nelnet

How the extended repayment plan works

Source: Nelnet

How the income-driven repayment plan works

Source: Nelnet

Are there repayment assistance programs?

Repayment assistance programs can be a safety net when you face difficulty repaying your loans—a feature not all private lenders offer. Such programs can affect the cost of the loan and lead to a higher total repayment amount due to the extension of the repayment period, but they don’t hurt your credit.

All federal loans carry the following repayment assistance options:

  • Deferment: A temporary suspension of loan payments, available if you meet certain requirements.
  • Forbearance: A temporary postponement or reduction of payments for a period due to financial hardship.
  • The option to switch to one of the repayment options pictured above (graduated, extended, or income-driven).

You can request these programs from Nelnet’s website when you log in to your account. You may need to upload additional documents for certain programs. If Nelnet needs more information, it will clarify when you submit the request.

Can I select Nelnet as my federal loan servicer?

You don’t get to select your loan servicer for federal student loans. The U.S. Department of Education assigns a loan servicer to each borrower after disbursing the loan to your school. Your assigned loan servicer is your primary point of contact for all matters related to loan repayment, so it’s crucial to maintain a strong relationship with this entity.

This might feel limiting, but remember: All loan servicers must abide by federal laws and guidelines, ensuring a standardized level of service. 

If you have concerns about your loan servicer or face difficulties with your student loan, you have the right to reach out to the Department of Education or explore options such as loan consolidation or refinancing for a more personalized service experience.

The first step to applying for federal student loans for college or graduate school is to fill out the Free Application for Federal Student Aid (FAFSA) form and submit the application online.

Nelnet’s Direct Consolidation student loans

In addition to managing repayment on federal student loans, borrowers can work with Nelnet on another type of student loan management: consolidation.

If you’re looking to streamline your federal student loan repayment, a Direct Consolidation student loan could be a solution. This allows borrowers to combine multiple federal student loans into one federal loan, simplifying the repayment process. 

The Direct Consolidation loans can be attractive, especially compared to private student loan refinancing because it it allows you to retain several federal benefits you lose when you refinance with a private lender.

Rates, terms, and more

First, we’ll cover the rates and terms. The fixed APR for a consolidation loan is the weighted average of the rates on your current loans, rounded to the nearest one-eighth of a percent. This might increase your overall rate, but it ensures your rate is predictable and will not change over the life of your loan.

Here’s a breakdown of the loan terms:

Loan amountsAll federal student loans are eligible for consolidation
Rates (APR)Weighted average of current loan rates, rounded to the nearest ⅛ percent
Repayment terms10 – 30 years

Unique features of a Direct Consolidation loan include: 

  • A single loan with one monthly bill, which may result in lower payments
  • Access to federal repayment plans and forgiveness programs
  • Weighted interest rate could reduce your overall rate, depending on your loans
  • No need for a credit history or cosigner

This may simplify your payments, but you extending the term of your loan can mean paying more interest over the life of the loan. Always consider your personal circumstances before opting for consolidation.

Who’s eligible to consolidate federal student loans with Nelnet?

Nelnet’s Direct Consolidation loan can simplify repayment for borrowers with federal student loans. This opportunity is available to many borrowers, including those who have not graduated. 

Cosigners are not required, or even accepted, for federal student loan consolidation. Here’s a quick look at the eligibility requirements for a Nelnet Direct Consolidation loan:

CitizenshipMust be a U.S. citizen or U.S. national, have a green card, have an arrival-departure record, have battered immigrant status, or have a T-visa or a parent with a T-1 visa
State of residenceOpen to residents of all U.S. states, territories, and the District of Columbia
Graduation statusNo graduation requirement. Borrowers can consolidate after they graduate, leave school, or drop below half-time enrollment

Almost anyone with federal student loans is eligible to for a Direct Consolidation Loan, making it worth considering for borrowers seeking to simplify their repayment process. Always consider your circumstances, and consult with a financial advisor if necessary before making a decision.

How do you repay Nelnet Direct Consolidation student loans?

Repaying a Direct Consolidation student loan from Nelnet doesn’t conform to a one-size-fits-all model. Because every borrower’s financial situation is unique, federal loan servicers offer repayment plans with terms ranging from 10 to 30 years.

When does repayment begin?

For Direct Consolidation Loans with Nelnet, repayment typically starts within 60 days after the loan is disbursed. The start date isn’t flexible, but you can choose your repayment plan, tailoring the terms to fit your financial situation. 

How long does repayment last?

The federal repayment plan you choose determines the length of your loan repayment. Nelnet offers options spanning from 10 to 30 years. Alternatives to the standard 10-year repayment plan are described in more detail below. 

You can control this. By choosing a repayment plan, you set the pace for debt clearance. And if you pay off your loan early, you can do so without penalty, reducing your overall interest cost.

Are there repayment assistance programs?

Nelnet provides several repayment assistance programs, something you won’t find with many private refinance lenders. These programs can reduce or halt your payments if you face financial hardship. This affects the loan’s overall cost but not your credit score. 

Let’s explore these options:

  • Deferment: Stop making payments or reduce your monthly payment for a period. It’s perfect if you’re experiencing economic hardship.
  • Forbearance: Like deferment, this pauses or reduces your payments, but interest accrues during this period. It’s best for temporary financial struggles.
  • Graduated repayment: Starts with lower payments that increase every two years and might be ideal if you expect a steady rise in income.
  • Extended repayment: Stretch your repayment period up to 25 years. Consider this if you need smaller monthly payments.
  • Income-driven repayment: Adjust your monthly payment based on your income and family size. It might be suitable if your income is low relative to your debt.

How to apply for a Direct Consolidation loan with Nelnet

You won’t apply for a Direct Consolidation loan with Nelnet through Nelnet’s website. Instead, you’ll use the federal government’s online portal. Here’s a step-by-step guide to start the process:

  1. Organize your information: Gather all necessary details about your federal student loans, including the types and amounts of loans you have.
  2. Visit the Federal Student Aid website: Go to the Federal Student Aid (FSA) website’s Loan Consolidation page.
  3. Create an account or sign in: If you don’t have an FSA ID, create one. If you do, sign in using your credentials.
  4. Complete the application: Follow the prompts to apply online. This will involve selecting the loans you want to consolidate and choosing a repayment plan.
  5. Choose a loan servicer: As part of the application, you can choose Nelnet or another loan servicer. Remember: You’re not guaranteed to get your preferred servicer, but you can express a preference.
  6. Review and submit: Review all the information on your application and then submit it.

The time it takes for each step can vary depending on your personal situation. Gathering your information and completing the application can take a few hours. After you submit your application, it often takes 30 to 90 days to finalize the consolidation.

During this time, you’re responsible for making payments on your loans until you receive notice that your new Direct Consolidation Loan is active.

Pros and cons of Nelnet federal student loans

When weighing the benefits and drawbacks of a federal student loan with federal loan servicers including Nelnet, it’s crucial to consider these factors:

Federal student loans


  • Accessible to many borrowers, not tied to financial need or credit history.

  • Often lower interest rates than private student loans.

  • Fixed interest rates, offering stability over the life of the loan.

  • Offers income-driven repayment plans.

  • Deferment and forbearance options for borrowers in financial hardship.

  • Loan forgiveness programs, e.g., Public Service Loan Forgiveness (PSLF), for eligible borrowers.


  • Student loans aren’t generally discharged in bankruptcy.

  • Borrowing limits may not cover the full cost of education, meaning students also must borrow private student loans.

  • Fees can add to the cost of the loan.

  • Interest accrues while borrower is in school on Unsubsidized Loans.

  • Borrowers cannot choose their loan servicer.

Direct Consolidation loans also have unique advantages and disadvantages.

Direct Consolidation student loans


  • Simplified payments with a single bill each month.

  • Fixed interest rate.

  • Retain federal benefits such as forbearance, income-driven repayment plans, and loan forgiveness programs.

  • Potential for lower monthly payments compared to the standard repayment plan.

  • Can select your loan servicer when you consolidate.


  • An extended repayment period could lead to paying more in interest over time.

  • Lose the grace period if one remains on any of the loans you consolidate.

  • Can’t consolidate private student loans.

  • May lose rate discounts or other benefits associated with the original loans upon consolidation.

How have Nelnet student loans evolved over the years?

Nelnet’s journey in the student loan industry, beginning as a federal loan servicer in 1978, has been marked by change and adaptation. Nelnet first operated in the background, handling federal loans and customer service for borrowers. 

It has since expanded its services.

  • Online access: In 2002, Nelnet began offering information about federal student loans, consolidation, and loan management on its website. This move made loan information and resources more accessible to borrowers, allowing them to make more informed decisions about their financial futures.
  • Expansion of services: Over time, Nelnet has evolved into one of the largest and most recognized federal loan servicers. Its services now extend beyond servicing loans to providing a wide range of resources for borrowers. These include extensive information on loan repayment options, financial literacy resources, and tools for tracking loan balances and payments.
  • Adaptation to federal policies: As federal policies have changed, so has Nelnet. For instance, the switch to direct lending by the federal government led Nelnet to adjust its services to meet the needs of a changing borrower population.

Through this evolution, Nelnet has remained committed to supporting borrowers on their journey to loan repayment. These changes demonstrate Nelnet’s adaptability and commitment to serving borrowers’ needs.

Is Nelnet a reputable loan servicer?

Customer reviews offer firsthand insights into borrowers’ experiences—highlighting the positives and exposing potential pitfalls. These reviews can be crucial in helping you make an informed decision and set realistic expectations for your experience. 

It’s also important to remember that reviews reflect individual experiences and may not always represent the lender’s service as a whole. Let’s take a look at Nelnet’s reviews:

SourceCustomer ratingNumber of reviews
Trustpilot2.5 out of 55
Google2.2 out of 548

Ratings collected on August 2, 2023.

Nelnet’s profile was being updated on the Better Business Bureau‘s website at the time of writing, making it impossible to provide an accurate rating or review count from that source.

Nelnet’s customer satisfaction appears mixed with an average rating of 2.35 out of 5 from 53 reviews across two platforms. 

A common theme among the reviews on Trustpilot and Google is a lack of transparency and unwillingness to assist borrowers, making the process of managing loans more challenging than it should be. One reviewer on Trustpilot mentioned difficulties using Nelnet’s services as a U.S. citizen living abroad.

Keep in mind: Customers who leave reviews often have strong opinions—positive or negative—and they may not reflect the experiences of all borrowers. But patterns in the complaints, such as those around transparency and service, can be informative.

Does Nelnet have a customer service team?

With Nelnet, you can expect a customer service team that is ready to assist with loan repayment questions, general inquiries, and potential issues you might face. Nelnet manages all the loans it services, which means you’ll communicate with its team when you need assistance.

Here’s a detailed list of how you can reach out to Nelnet’s customer service team:

  • Phone: Contact Nelnet by phone depending on your location. The customer service lines are open Monday from 8 a.m. to 9 p.m. Eastern, Tuesday and Wednesday from 8 a.m. to 8 p.m. Eastern, and Thursday and Friday from 8 a.m. to 6 p.m. Eastern.
    • U.S. residents can call 888-486-4722. 
    • International callers may dial 303-696-3625. 
  • Email: Nelnet has a contact form on its website for written inquiries. For specific written requests, you can email [email protected].
  • Mail: For conventional mail, send letters to: Nelnet, P.O. Box 82561, Lincoln, NE 68501-2561. 
    • California residents can mail letters to P.O. Box 82578, Lincoln, NE 68501-2578.
  • Social media: Nelnet maintains an active presence on social platforms. You can connect with it on Facebook, X (formerly known as Twitter) @Nelnet, and LinkedIn.

With multiple communication channels, Nelnet offers flexibility to borrowers regarding how they can get in touch for support. It’s wise to keep these details handy should you need to reach out with questions or concerns about your student loan.

Nelnet FAQ

Does Nelnet offer private or federal student loans?

Nelnet is known primarily as a federal student loan servicer, meaning it manages loans on behalf of the Department of Education. It’s tasked with helping borrowers manage and repay their federal student loans.

Nelnet Bank is Nelnet’s private student loan company. Read our review of Nelnet Bank student loans if you’re interested.

Does applying with Nelnet hurt my credit?

Nelnet is a loan servicer and not a lender, so you won’t apply for a loan or loan consolidation with Nelnet. 

This process will not hurt your credit if you’re applying for a Direct Consolidation Loan through the federal government. The federal government doesn’t perform a hard credit check when you apply for a consolidation loan.

Does Nelnet require a cosigner?

If you’re applying for a federal student loan or Direct Consolidation Loan through the federal government, you don’t need a cosigner. 

What can Nelnet student loans be used for?

The federal loans Nelnet services are used to pay for education-related expenses. This includes tuition, room and board, and books. These funds are sent to the school first to cover these expenses, and the school refunds any leftover amount to the student to use for living expenses.

How long does it take to receive funds from Nelnet?

Nelnet doesn’t distribute funds to borrowers. When you take out a federal student loan, the Department of Education sends the funds to your school. The process can take one to three weeks for first-time borrowers. 

After your first payment, your financial aid is disbursed automatically for the following terms.

Is Nelnet responsible for paying off my current student loans?

If you apply for a Direct Consolidation Loan, the Department of Education will pay off the federal loans you requested to consolidate. Nelnet will then manage your new Direct Consolidation Loan. 

Remember, it’s your responsibility to continue paying your loans until your new consolidation loan is active.

Can Nelnet student loans be forgiven?

Nelnet-managed loans could be forgiven if they’re federal loans and you meet certain criteria set by the Department of Education. Forgiveness programs include Public Service Loan Forgiveness, Teacher Loan Forgiveness, and forgiveness due to total and permanent disability. 

You must apply for these programs and meet all the eligibility criteria to have your loans forgiven.