Nelnet Department of Education Contract

The Nelnet Department of Education Contract: What You Need to Know

The Nelnet Department of Education contract has been a topic of discussion and controversy for quite some time now. Nelnet is a student loan servicer that has been working with the Department of Education for several years, helping to manage student loans and disburse funds to educational institutions.

The contract between Nelnet and the Department of Education was set to expire in 2021, but was extended through 2022. This extension has raised questions about the future of student loan servicing and the role of private companies in managing federal student loans.

Many critics argue that the Department of Education should be the sole entity responsible for managing student loans, as private companies like Nelnet have been accused of mismanaging loans and contributing to the student debt crisis. Others argue that private companies provide valuable services and expertise that the Department of Education lacks.

Regardless of where you stand on the issue, it`s important to understand the details of the Nelnet Department of Education contract. Here`s what you need to know:

1. Nelnet has been servicing federal student loans since 1998.

Nelnet was one of the first private companies to enter the student loan servicing industry, and has been working with the Department of Education for over two decades. They currently service approximately 5 million federal student loans.

2. The extension of the contract was worth $400 million.

The extension of the contract through 2022 was worth $400 million to Nelnet. This money is used to pay for the company`s services and to help manage the student loan program.

3. Nelnet provides a variety of services to the Department of Education.

In addition to servicing loans and disbursing funds, Nelnet also provides call center support, financial aid management, and data analysis for the Department of Education. These services help to streamline the student loan process and ensure that students receive the funds they need to attend school.

4. Nelnet has faced criticism for its handling of student loans.

Nelnet has been accused of a variety of wrongdoings over the years, including overcharging borrowers, mismanaging loans, and providing poor customer service. In 2018, the company settled with the Department of Justice for $57 million over allegations of false claims and kickbacks.

5. The future of student loan servicing is uncertain.

The extension of the Nelnet contract has raised questions about whether private companies will continue to play a role in managing federal student loans. Some lawmakers and advocates have called for an end to the government`s relationship with private companies, while others argue that private companies provide valuable services and should be allowed to continue operating.

In conclusion, the Nelnet Department of Education contract is a complex issue that has important implications for the future of student loan servicing. Whether you support the role of private companies in managing student loans or believe that the Department of Education should be solely responsible, it`s important to stay informed and engaged on this issue. As the student debt crisis continues to grow, the decisions made about how to manage student loans will have far-reaching consequences for borrowers, taxpayers, and the economy as a whole.