Nelnet May Have Another Shot At Federal Student Loan Business
Nelnet may be seeing a glimmer of hope that its run as one of the main servicers of student loans for the federal government won't come to an end. That's somewhat good news for Nelnet, which earlier this year was told it was no longer in the running for the contract.
Updated by Namitha Antony on 23rd September 2020
Nelnet might be seeing a hint of something better over the horizon that its run as one of the primary servicers of student loans for the central government won't conclude.
Prior this month, the U.S. Branch of Education's office of Federal Student Aid dropped the offering procedure for the Enhanced Processing Solution transitional adjusting framework part of its Next Generation Financial Servicing Environment contract acquisition process.
That is to some degree uplifting news for Nelnet, which not long ago was told it was no longer in the running for the agreement.
Feds bargain Lincoln-put together Nelnet a second blow concerning federal student loans.
The declaration basically implies that bit of the agreement will probably be rebid, and Nelnet will have another taken shots at it.
"NextGen is tied in with conveying top-notch administration to student borrowers, and declaration guarantees another procedure that can put those 43 million Americans first," Nelnet said in an announcement. "Cooperating, Nelnet can bring more than 40 years of institutional information, and an imaginative way to deal with assistance the Department of Education conveys a positive encounter for borrowers."
The organization had been confronting the possibility of being closed out totally from future student loan adjusting contracts.
Nelnet additionally offers on the Business Processing Operations segment of NextGen, which includes giving back office and call focus support, yet was not among the organizations picked for that agreement.
The Education Department a month ago declared it had picked five littler firms for that business, none of which are among the current principal servicers of federal student loans.
In an announcement a month ago after the organization was advised of the choice, Nelnet CEO Jeff Noordhoek said he was "baffled and frustrated," and would "seek after each lawful road accessible."
Nelnet representative Ben Kiser said the organization has mentioned a questioning from the office concerning why it wasn't picked and likely will document a dissent in the wake of accepting that questioning, a procedure he said could take a while.
"We think killing the best two servicers from BPO conflict doesn't bode well and isn't to the greatest advantage of America's student borrowers," Kiser stated, alluding to Nelnet and its Great Lakes auxiliary, which are two of the four primary student loan servicing organizations.
Nelnet's current student loan servicing contract experiences the year's end, and it has choices to be stretched out for up to an extra a year. That appears as though a chance considering the organization's expected interest of the BPO part of NextGen and the imaginable rebid of the EPS parcel.
The Education Department has declined to remark on the determination procedure or why Nelnet was not thought of.
In a news discharge a month ago declaring its choice of the organizations for the BPO segment of the agreement, Education Secretary Betsy DeVos said the objective of the new framework is "improving client support and considering our temporary workers responsible for their presentation."
"Students, guardians, borrowers, and schools merit a world-class experience when managing FSA. I'm certain that FSA has recruited the organizations with the information, experience, and mastery to convey that."
Losing federal student loan agreements could mean massive cutbacks at Nelnet. The organization said in an ongoing protections recording that the government contracts represented 30% of its total income a year ago.
Nelnet has around 6,500 workers, generally speaking, more than 3,000 of whom are situated in Lincoln. Lost the federal student loan agreement could prompt many those occupations vanishing, something that has gotten the consideration of Rep. Jeff Fortenberry.
"The persevering individuals at Lincoln-based federal student loan servicer at Nelnet were justifiably stressed for their employments when kept separate from the ongoing Dept of Ed contract process," Fortenberry said on Twitter a week ago. "Glad to report — the issue's been settled, permitting Nelnet to proceed with the serious procedure."
Kiser said Fortenberry had been incredible assistance to Nelnet with the agreement circumstance. "He's been a solid supporter for Nebraskans and America's student borrowers," he said.