Nelnet, Inc. is a diverse company with a focus on delivering education-related
products and services and student loan asset management. The largest operating
businesses engage in student loan servicing, tuition payment processing and school
information systems, and telecommunications. A significant portion of the Companys
revenue is net interest income earned on a portfolio of federally insured student
loans. The Company also makes investments to further diversify the Company both
within and outside of its historical core education-related businesses, including,
but not limited to, investments in real estate and start-up ventures. Substantially
all revenue from external customers is earned, and all long-lived assets are located,
in the United States.
The Company was formed as a Nebraska corporation in 1978 to service federal
student loans for two local banks. The Company built on this initial foundation
as a servicer to become a leading originator, holder, and servicer of federal
student loans, principally consisting of loans originated under the FFEL Program.
The Health Care and Education Reconciliation Act of 2010 (the “Reconciliation
Act of 2010”) eliminated new loan originations under the FFEL Program
effective July 1, 2010 and requires that all new federal student loan originations
be made through the Federal Direct Loan Program. This law does not alter or
affect the terms and conditions of existing FFELP loans.
As a result of the Reconciliation Act of 2010, the Company no longer originates
new FFELP loans. However, a significant portion of the Companys income continues
to be derived from its existing FFELP student loan portfolio. As of December
31, 2015, the Company had a $28.3 billion student loan portfolio that will amortize
over the next approximately 25 years. Interest income on the Companys existing
FFELP loan portfolio will decline over time as the portfolio is paid down. However,
since July 1, 2010, the effective date on and after which no new loans could
be originated under the FFEL Program, the Company has purchased $20.8 billion
of FFELP loans from other FFELP loan holders looking to adjust their FFELP businesses.
The Company believes there may be additional opportunities to purchase FFELP
portfolios to generate incremental earnings and cash flow. However, since all
FFELP loans will eventually run off, a key objective of the Company is to reposition
the Company for the post-FFELP environment.
The Company has four reportable operating segments as summarized below.
Student Loan and Guaranty Servicing
Referred to as Nelnet Diversified Solutions (“NDS”)
Focuses on student loan servicing, student loan servicing-related technology
solutions, and outsourcing services for lenders, guaranty agencies, and other
entities
Includes the brands Nelnet Loan Servicing, Firstmark Services, Nelnet Guarantor
Solutions, 5280 Solutions, CampusGuard, Proxi, and U-Fi
Tuition Payment Processing and Campus Commerce
Commonly known as Nelnet Business Solutions (“NBS”)
Focuses on tuition payment plans, financial needs assessment services, online
payment and refund processing, and school information system software
Includes the brands FACTS Management and RenWeb
Asset Generation and Management
Includes the acquisition and management of the Companys student loan assets
Telecommunications
Includes the operations of Allo
Focuses on providing pure fiber optic service directly to homes and businesses
for internet, television, and telephone services
2.54% 
0.82 %