Graduating from college is a major milestone – congratulations! And for many people, along with a fancy new degree comes a lot of student loan debt and a student loan servicer you aren’t familiar with yet.
If you have federal student loans and your servicer is Nelnet, you may have questions about using the platform, what your repayment options are, and how to make your student loan payments.
So as your graduation present, I have for you the complete guide to using Nelnet, including:
- What is Nelnet?
- Using the Nelnet servicing platform
- Repayment options available through Nelnet
- Negative Nelnet reviews
- Nelnet alternatives
And at the end of this article, I’m including my best tips for boosting your student loan debt pay off so you can destroy it ASAP.
How to use Nelnet: The Complete Guide for 2020
What is Nelnet?
Nelnet is one of several different student loan servicers that have been set up by the U.S. Department of Education to manage federal student loans. Through Nelnet, you can manage payments of a variety of loans, and they are the only servicer who handles Total and Permanent Disability Discharges.
You can use Nelnet to:
- Make your student loan payments
- Develop a repayment plan
- Track your loan repayment progress
- Ask to lower or postpone your payments
- Receive documents for the student loan interest tax deduction
However, not everyone with a federal loan will go through Nelnet because the federal government assigns the loan servicer you use once your loans are discharged. Other servicers include Navient, Mohela, and FedLoan.
M$M tip: If you need motivation along your student loan payoff journey, here are 13 stories from student loan debt destroyers: How to Pay Off Student Loan Debt – These People Paid Off $600,000 of Student Loan Debt.
5 steps for using Nelnet
Setting up an account and using the Nelnet online platform just takes a few minutes, and you can do it either through their full website or mobile app. To get started:
- Create an account. On the full website, you can find where to register a new account on the left side of the screen in the sign-in box. You will need to provide your name, email address, date of birth, and Social Security number.
- Create a user name and secure password. Nelnet has rules for creating a secure username and password. You will also choose an image that shows that you’re logging in to a secure Nelnet site.
- View your loans. Once you’ve logged in to your Nelnet account, you can view each of your student loans, including balance, interest rate, and when your payments are due.
- Take a look around the Nelnet portal. The platform has information on student loan basics, what to do if you fall behind on a payment, an overview of your repayment options, and information on how to apply and renew your repayment program.
- Choose a repayment option. See below.
Repayment options available through Nelnet
After you’ve set up your Nelnet account, it’s time to choose a repayment option that works best for you. And just to put this out there, you can always pay more than your monthly student loan payment. No matter which repayment option you choose, paying more than the minimum monthly payment will shorten the length of your loan and the amount of interest you pay overall.
The repayment options available through Nelnet are:
- Standard Repayment. This plan sets you on a 10-year term (or up to 30 years if you have consolidated your loans).
- Graduated Repayment. This is a 10-year term (or up to 30 years if you consolidate) that starts you out with a lower monthly payment that increases every two years.
- Extended Repayment. This plan gives you a 25-year term on either a fixed or graduated schedule.
If you don’t choose a repayment plan, Nelnet will default to the standard plan.
The biggest benefit of the standard plan is that you pay the least amount of interest over the course of your repayment. But the graduated repayment plan is good for people who aren’t earning much right after graduation and know their income will increase over time. Out of these three plans, you will pay the most interest on the extended plan.
If you are looking for a repayment plan based on your income, here are Nelnet’s Income-Driven Repayment (IDR) Plans:
- Income-Based Repayment (IBR). Using your total student loan debt, adjusted gross income (AGI), and family size, Nelnet will develop a lower monthly payment for you. Payments are capped at 15% or 10% of your discretionary spending. Your term will be 20 or 25 years.
- Income-Contingent Repayment (ICR). This is for most Direct Loans and considers your income, family size, and total loan debt. Your payments are the lesser of 20% of your discretionary income or the amount you would pay under a fixed repayment plan over 12 years.
- PAYE. You’ll need to qualify for a reduced payment with your income, family size, and total student debt. Payments are capped at 10% of your monthly income and last for up to 20 years. After 20 years of qualifying payments, your remaining balance will be forgiven.
- Income-Sensitive Repayment. This is only for loans under the FFEL (Federal Family Education Loan) program. Your payments are based on your monthly gross income, and your payments are lowered for up to 12 months at a time.
For any of Nelnet’s IDR plans, you will have to recertify as needed (it’s usually once a year). When you recertify your income and family size, your payments may be adjusted for any changes, like if you started earning more, had a child, etc.
FAQs about using Nelnet
What should I be doing during my student loan grace period?
Honestly, the best thing you can do for yourself is to go ahead and start making payments if you can. It’s a good habit to start and that six month grace period goes by quickly. You should also start thinking about how you’ll be paying back your loans.
How do I make payments through Nelnet?
There are several different ways to make payments on your student loans using Nelnet:
- Sign up for Auto Debit and have your monthly payments automatically withdrawn from your bank account.
- Pay via the Nelnet mobile app.
- Pay through the Nelnet website.
- Send your payments in the mail, include your account number and the letter attached to it.
- Make a payment over the phone by calling 1-888-486-4722.
How do I pay more than my monthly payment and target certain loans?
This is the best way to destroy your debt, and it’s what I did to pay off my $40,000 of student loan debt in less than two years.
One thing you need to know about targeted overpayments is that you will still need to make the minimum payment on the rest of your loans. Here’s how you target an overpayment using Nelnet:
- Sign in to your account
- Click on the loan group you’d like to target
- Put the amount you’d like to pay in the payment field
- Finalize your payment
Directing your overpayments will reduce the principal amount of that loan, which is how you’ll use either the debt snowball or avalanche method to attack your debt.
What if I want to pay my loans ahead of time?
This is awesome, but you will still need to make at least the monthly payment amount. And rather than just paying more ahead, which will go towards the interest in the beginning, consider targeting your payments for loans with higher interest rates. This will reduce the amount you pay over the course of your loan and possibly reduce your loan term.
What if I need a deferment or forbearance?
These are two different options for people in a situation where they cannot afford their payments on one of the repayment plans listed above.
Deferment is for anyone experiencing financial hardship or has lost their job, but it’s also available if you go back to school or are active-duty military. This option allows you to postpone your payments.
If you don’t qualify for a deferment or are experiencing other needs, forbearance might be an option. All of your loans will accrue interest during this period, and you can read more about deferment and forbearance options available through Nelnet.
M$M tip: If you are struggling to pay your student loans, I highly recommend increasing your income with a side hustle. That’s what I did, running Facebook ads for small businesses, and it’s what helped me pay off $40,000 in student loans in just 18 months. If you’re interested in earning an additional $1,000 a month, sign up for my Facebook Side `Hustle Course.
What about Total Permanent Disability Discharge?
Nelnet is the only student loan servicer that handles the TPD discharge program. It’s available for borrowers who are totally and permanently disabled. If you qualify, the program discharges FFEL loans, Perkins Loans, Direct Loans, and TEACH grant obligations.
To start the process, you will need to go to DisabilityDischarge.com.
Where do I find tax information on Nelnet?
When you file your taxes, you will need to know the amount of interest you paid on your student loans for the previous tax year. You can find this information on IRS Form 1098-E, which is sent to you by Nelnet in January or February. You can also call Nelnet to find out how much interest you paid.
Again, the number of Nelnet is 1-888-486-4722.
What do I do when I’m ready to make my final payment?
Nice work, you’re so close!!!
To make your final payment, you’ll select “Make a Payment” after you log in to your Nelnet account, and then select “Payoff Quote” and pay that amount. If you aren’t making a payment that day, your payoff amount may change because your loans will continue accruing interest until they are completely paid off.
Negative Nelnet reviews and what you can do
The unfortunate reality is that there are a lot of negative Nelnet reviews, and they aren’t just because people don’t like student loans. In fact, many other student loan servicers are having similar issues.
If you are paying your student loans through Nelnet, here are some of the issues you may be dealing with and how to handle them.
Poor customer service
Rude customer service representatives is one issue, but the other is that when borrowers call to make changes, the changes don’t actually go through. To fix this, you should always document any contact you have with Nelnet. Takedown the representative’s name, employee number, when you spoke, and what they told you.
Problems recertifying IDR plans
If you are on an IDR plan, you’ll need to recertify every year to maintain your status. The issue for some borrowers is that their paperwork isn’t being processed properly. For this issue, make sure you are always turning in the correct paperwork and continue making payments even if you are on the wrong plan.
Incorrect information about your loans
Some borrowers have experienced Nelnet giving them information that didn’t match up with their repayment plan. These are issues like Nelnet saying you’re delinquent when you’re not. Again, always make sure you keep records of any communications or changes regarding your student loans.
Those Nelnet reviews make me really upset, but the catch is that you can’t just pick a different student loan servicer. Your servicer is assigned to you by the federal government, and once you have one, that’s it. While that sucks, refinancing your student loans might be an option that means you don’t have to use Nelnet anymore.
Refinancing your student loans is when you work with a private lender to borrow an amount that will replace your student loans with one loan that ideally comes at a lower interest rate.
Refinancing your student loans can save you a significant amount of money over the course of your loans, but the downside is that you will lose any of the protections offered by federal student loan servicers. These are things like income-driven repayment options, deferments, or forbearance.
If you’re thinking about refinancing your Nelnet student loans, here are the two markers of an ideal candidate:
- You have the ability to make your payments every single month, AND
- You have a high enough credit score to get a good rate and to qualify for refinancing in the first place
If you are a good candidate, there are a number of student loan refinancing companies, but Credible is my top pick. For full disclosure, I am an affiliate for Credible, but I only went into that partnership after getting to know the company and believing in what they do. I only work with companies that I trust and that I believe will help my readers.
You can read more about student loan refinancing and whether or not you’re a good candidate in my article Refinancing Student Loans: The Ultimate Guide.
My final word on using Nelnet
Student loans are a necessary evil – college is really freaking expensive and the majority of people don’t have the funds to pay for college in cash.
The good news is that you don’t have to live with your student loans and Nelnet for the rest of your life.
If you want to expedite your payoff (and this even applies to those who refinance their loans), here are the best ways to destroy your student loan debt fast:
- Start making payments during your grace period
- Keep your living expenses low so you have more to put towards your debt payments
- Start a side hustle if you need to earn more
You can find more advice on speeding up your payment in 7 Ways to Pay Off Your Student Loans Faster.
I know student loans aren’t awesome and neither is Nelnet, but as long as you keep making on-time payments and pay more when you can, you’ll be finished with them one day in the near future.
Trust me, you’ve got this.