What Nelnet payment plans are and who uses them

Nelnet is a loan servicer — a company the U.S. Department of Education contracts to collect payments on federal student loans. If your loans are assigned to Nelnet, you make your monthly payments through them. Nelnet does not own your loans; they manage the paperwork, process your payments, and help you understand your repayment options.

Nelnet handles millions of federal student loans. You will know Nelnet services your loans if your loan documents list them as the servicer, or if you log into your account at studentloans.gov and see Nelnet's name next to your loan. You may have been assigned to Nelnet when you first took out the loan, or your loans may have been transferred to them from another servicer.

Nelnet offers the same federal repayment plans that all servicers offer — they do not create their own plans. The difference is in how Nelnet administers them: how they calculate your payment, when they process it, and what tools they provide to track it.

Key Takeaways

  • Nelnet is a loan servicer that collects payments on federal student loans but does not own them or set the repayment terms.
  • You can change your repayment plan through Nelnet at any time, and the change takes effect on your next billing cycle.
  • Nelnet offers income-driven repayment plans that calculate your payment based on your current income, not your loan balance.
  • If you stop making payments, Nelnet will report the delinquency to credit bureaus after 90 days and may eventually refer your loan to the U.S. Department of Education for collection.
  • You can set up automatic payments through Nelnet's website or phone line, and automatic payments typically reduce your interest rate by 0.25 percent.

The repayment plans Nelnet administers

Nelnet administers four income-driven repayment plans and two standard plans. Income-driven plans calculate your monthly payment based on your current income and family size, not on how much you borrowed. Standard plans charge a fixed amount each month over a set period.

The four income-driven plans are Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR). REPAYE and PAYE typically result in the lowest monthly payment for borrowers with low income. IBR and ICR are older plans that may be better for some borrowers depending on when they took out their loans and how much they earn.

The two standard plans are the 10-year Standard Repayment Plan and the Graduated Repayment Plan. Standard Repayment charges the same amount every month for 10 years. Graduated Repayment starts with a lower payment that increases every two years, also over 10 years. Neither plan bases your payment on income.

You can switch between plans at any time through Nelnet's website or by calling their customer service line. The change takes effect on your next billing cycle. If you switch to an income-driven plan, you will need to provide recent income information — usually your most recent tax return or a statement from your employer.

How to change your payment plan with Nelnet

Log into your account at Nelnet's website using your username and password. If you do not have an account, you can create one by entering your Social Security number and loan information. Once logged in, look for a link labeled "Repayment Plans" or "Change My Plan" — the exact wording varies depending on which version of Nelnet's website you see.

Select the plan you want to switch to. If you choose an income-driven plan, Nelnet will ask you to enter your current income and family size. You can use your most recent tax return, your current year's estimated income, or your spouse's income if you are married and file taxes jointly. Nelnet will calculate your new monthly payment and show it to you before you confirm the change.

After you confirm, Nelnet will send you a confirmation email with your new payment amount and due date. Your first payment under the new plan will be due on the date shown in your account. If you do not see the change reflected within a few business days, call Nelnet's customer service line at the number on your loan statement.

You can also change your plan by phone. Call the number on your loan statement, have your Social Security number ready, and tell the representative which plan you want to switch to. They will walk you through providing income information if needed and confirm your new payment amount before ending the call.

Automatic payments and interest rate reductions

Nelnet offers a 0.25 percent interest rate reduction if you set up automatic payments from a bank account. This reduction applies only to the interest rate on your loans — it does not change your monthly payment amount, but it does reduce the total interest you pay over the life of the loan.

To set up automatic payments, log into your Nelnet account and look for "AutoPay" or "Automatic Payments." You will enter your bank account number and routing number. Nelnet will make a small test deposit to verify the account, then begin withdrawing your monthly payment on the due date you select.

The interest rate reduction takes effect once your first automatic payment processes. If you stop automatic payments, the reduction ends and your interest rate returns to the original rate. You can cancel automatic payments at any time through your account or by calling Nelnet, but you will lose the rate reduction going forward.

What happens if you miss a payment

If your payment is not received by the due date, Nelnet will mark your account as late. You will typically have a grace period of 15 days before Nelnet reports the late payment to credit bureaus. During this time, you can still make the payment without a permanent mark on your credit report.

If you do not pay within 90 days of the due date, Nelnet will report the delinquency to the three major credit bureaus: Equifax, Experian, and TransUnion. This will lower your credit score and remain on your credit report for seven years. After 270 days without payment, your loan enters default and Nelnet may refer it to the U.S. Department of Education's collection office.

If you cannot afford your current payment, contact Nelnet before you miss a payment. You can request a temporary forbearance (a pause on payments for up to three months) or switch to an income-driven plan that may lower your payment. Nelnet can also discuss income-driven plans over the phone if you want to explore your options before logging into your account.

Deferment and forbearance through Nelnet

Deferment and forbearance are temporary pauses on your loan payments. During deferment, the federal government pays the interest on subsidized loans, so your balance does not grow. During forbearance, interest continues to accrue, meaning it is added to your balance each month.

You may be may be able to access for deferment if you are in school at least half-time, unemployed, or experiencing economic hardship. Forbearance is available if you cannot pay but do not meet deferment criteria — for example, if you are working but your income is too low to afford your payment.

To request deferment or forbearance, log into your Nelnet account or call their customer service line. Nelnet will ask you which type you are requesting and why. For deferment, you may need to provide proof of enrollment or unemployment. For forbearance, Nelnet may ask about your income and expenses. Once approved, your payments will pause for the period Nelnet grants — typically three to six months for forbearance, and up to three years for deferment.

Loan forgiveness programs and Nelnet

If you work in public service — as a teacher, nurse, social worker, or for a government agency — you may be may be able to access for Public Service Loan Forgiveness (PSLF). This program forgives the remaining balance on your loans after you make 120 may have access to payments while working full-time for a may have access to employer.

Nelnet services PSLF loans and can help you track your progress toward forgiveness. Log into your account and look for "PSLF" or "Forgiveness Programs" to see how many may have access to payments you have made. You will need to submit an Employment Certification Form to Nelnet once per year to confirm you are still working for a may have access to employer.

Other forgiveness programs, such as Teacher Loan Forgiveness and Perkins Loan Forgiveness, have different requirements and timelines. Nelnet can tell you whether your loans are may be able to access for these programs, but you will need to contact your employer's human resources or financial aid office to confirm your may be able to access and start the process.

Frequently Asked Questions

How do I know if Nelnet services my loans?

Log into studentloans.gov with your Federal Student Aid username and password. Your loans will be listed with the name of the servicer next to each one. You can also check your loan documents or the most recent statement you received — the servicer's name and contact information appear on the first page.

Can I pay more than my monthly payment without a penalty?

Yes. You can pay any amount above your minimum due at any time. Nelnet will explore the extra payment to your principal balance, which reduces the total interest you pay. There is no fee or penalty for paying early or paying more than required.

What if I disagree with the payment amount Nelnet calculated?

Contact Nelnet and ask them to review the calculation. Bring your most recent tax return or income documentation. If you believe Nelnet made an error, they will recalculate your payment. If you believe your income has changed significantly since you provided it, you can submit new income information and request a recalculation at any time.

Does Nelnet charge a fee to change my repayment plan?

No. Changing your plan is free. Nelnet does not charge fees for switching plans, setting up automatic payments, or requesting deferment or forbearance. Any fees related to your federal student loans come from the federal government, not from Nelnet.

What should I do if I cannot reach Nelnet by phone?

Use the messaging feature in your Nelnet account to send a question to their customer service team. You can also mail a letter to the address on your loan statement. Response times vary, but Nelnet typically replies to messages within five to ten business days. For urgent issues, try calling early in the morning or late in the afternoon, when wait times are usually shorter.