The 3 Biggest Complaints Borrowers Have About Nelnet

If Nelnet is your federal student loan servicer, believe it or not, you might have lucked out. The company, which is based in Lincoln, Nebraska, services over $529 billion of student loans for more than 15 million Americans, according to September 2023 data. It doesn’t have as many complaints as other federal loan servicers. That doesn't mean it's a good option, though.

It’s no surprise that even Nelnet customers — and customers of its other branches — have had terrible experiences with the servicer as shown in other Nelnet reviews. We surveyed our readers in January 2024 to learn about their good and bad experiences with their federal loan servicers.

We received almost 1,000 responses about Nelnet, and as you might have guessed, many were negative in nature. But Nelnet also received plenty of praise from our readers. Overall, Nelnet received the highest reader rating among the “Big 4” loan servicers. Here are some of the top Nelnet complaints we saw.

The top Nelnet complaints from customers

Nelnet reviews can vary, depending on how much contact a customer has with the servicer and who helped them. But we found some trends in the Nelnet complaints we received from our January 2024 survey and previous surveys, some of which ended up costing borrowers more money.

1. Poor customer service

When you owe tens of thousands of dollars in student loans, you’d think that the company making money off of you would have your back. You want to work with a great company that can walk you through the process of paying back your loan amount and discuss repayment options. But that hasn’t been the case for many readers.

Whenever one reader had concerns about their account, the response they invariably received was, “That’s a Department of Education problem,” they wrote. “Their customer service is there just to tell you they can't help you.” In other words, they want to pass off any issues student loan borrowers have to the federal government for the U.S. Department of Education to deal with. Here are a few other thoughts from Nelnet reviews.

Another reader was automatically put in deferment because their house was in a flood-affected area. When they called to say they weren’t impacted personally and asked to be taken off deferment, the representative said they would do it but didn’t. “My federal student loans remained deferred for three months,” wrote the reader, costing them more because of the capitalized interest.

Some readers had difficulty getting specific information or disclosures about their loans. Instead, they received generic and “largely useless” information in an email or over the phone.

Others noted getting passed around to different representatives and getting different answers from each to the same question.

“When you get someone on the phone at Nelnet, the chances of them really being able to answer your questions correctly is 1 out of 10. It’s horrible, but this seems to be the case with every loan servicer.”

January 2024 Student Loan Planner Reader Survey

What you can do to prepare for interacting with Nelnet

You can’t control who you talk to, but doing your research before you call can help you spot incorrect information. Also, don’t be afraid to be persistent if Nelnet doesn't resolve your issue. It may require you to set aside time to wait on hold, but it could save you time and money in the long run.

2. Incorrect payment calculations and processing

Of all the Nelnet complaints we received, one was downright egregious. When a reader started the process of recertifying their income for an income-driven repayment (IDR) plan, the representative they spoke with asked about their and their spouse’s hourly wages and weekly hours. “Then they based my monthly repayment amount on that number instead of our tax return,” they added.

According to the Department of Education, though, the only time a servicer can use anything but your adjusted gross income from your tax return is if your current income is significantly different. Even then, applicants must submit documentation to show their current income, and a phone call doesn’t count.

Another reader wrote that they received a letter from Nelnet stating that their grace period had begun and they would need to start making payments in six months. The problem? The grace period starts after you leave school, and this student hadn’t yet graduated. For undergraduates or grad students without a degree yet, the grace period should still be in effect, and the grace period and repayment term shouldn't begin just yet.

“Other students at my school with Nelnet had the same issue,” they wrote, “while none of the students with other loan servicers were affected.”

Other respondents complained about the amount of time it takes for Nelnet payment processing, which can cause problems when you’re trying to manage your checking account at a different financial institution. Moreover, borrowers wrote about getting confusing information about how their payments are split up between loans and having their payments calculated incorrectly.

“Their figures don't add up. Nelnet constantly has wrong info on their website concerning payment due. I have to check frequently what is owed.”

January 2024 Student Loan Planner Reader Survey

What you can do to stay on track with student loan repayment

It’s crucial to know how to spot mishaps with your monthly student loan payments because it could end up costing you more money. Keep an eye on your bank account from your financial institution or credit union — review how much is coming out of your checking account each month (especially if you have automatic payments), and sign up for payment alerts with the servicer to avoid late payments. Also, check your account on the Nelnet website every now and then to make sure Nelnet applies your monthly payment correctly.

And if you plan to apply for an income-driven repayment plan or Public Service Loan Forgiveness (PSLF), do your research beforehand to ensure they do it right and don’t give you the wrong advice. Check out the eligibility requirements and see if you qualify for rewards like an autopay discount (sometimes called auto debit). For example, you need to work full-time for 10 years at a public service organization to qualify for PSLF.

3. Lack of communication

Student loans can be complex, so there’s no excuse for a loan servicer to make things even more confusing. But that’s exactly what’s happened with some of our readers.

“They apparently aren't on the same page as the Department of Education,” wrote one reader, “since I receive conflicting correspondence.”

Another reader mentioned that they’re glad they know enough to spot inconsistent advice when they see it. “I am on top of my loans, but it's hard when they are supposed to have your answers,” they wrote.

“Their advice given is obviously geared toward repayment when there may be better long-term options to save or get more forgiven. They are not able to cover all needs for student loan details. The amounts listed online are often confusing to interpret.”

January 2024 Student Loan Planner Reader Survey

What you can do to combat the confusion

One reader told us that they never get a clear answer to their questions and end up having to do all the research on their own about their student loan debt. And that’s exactly what we’d recommend. Also, keep a tight record of your emails and calls with Nelnet to cover yourself if something goes wrong, especially if you're requesting forbearance or want to make sure you have on-time payments. Keep track of any mail, your account number, and the info you receive about your federal direct loans or other federal student aid.

Related: How to File a Student Loan Complaint: A Complete Guide

What to do if Nelnet is your servicer

We understand that our list of Nelnet complaints may not accurately represent everyone’s experience with the servicer. But if you think these issues are isolated, think again. The Consumer Financial Protection Bureau (CFPB) has received thousands of complaints from borrowers.

If you’ve experienced some of the problems our readers have shared, it’s important to understand that you don’t have to keep putting up with it. At Student Loan Planner®, we can help you find a new servicer, either through loan consolidation with another federal servicer or by refinancing them with a private lender who might be more customer-friendly and have better loan offers with some of the lowest rates.

Through student loan refinancing, you may even get a lower interest rate and have more flexibility, especially if you have a strong credit score. With student loan refinance providers, your federal loans become private student loans, so you'll miss out on forgiveness and other benefits. So consider carefully, especially those in health professions with robust student loan forgiveness opportunities.

Regardless of what you choose, it's key to understand how your loan term affects your monthly/ interest payments, any origination fees, and how to advocate for yourself. If you like Nelnet, you can also check out options for refinancing through Nelnet Bank.

Have you had any issues with Nelnet student loan servicer? Let us know in the comments below!