Nelnet Announces Changes to Staffing Capacity in Student Loan Servicing Division

Rhea-AI Summary

On January 18, 2023, Nelnet (NYSE: NNI) announced significant staffing changes due to delays in federal student loan repayment and relief programs. The company will lay off approximately 350 recently hired associates and terminate around 210 associates for performance issues within its Nelnet Diversified Services division. These layoffs were necessitated by the extended pause on federal student loan repayment, initially expected to resume by December 31, 2022. Despite the layoffs, Nelnet is committed to supporting student loan borrowers and hopes to redeploy affected associates when repayment resumes.

Positive

• Nelnet remains committed to supporting federal student loan borrowers.
• The company is actively seeking opportunities to redeploy eligible associates.

Negative

• Layoff of approximately 350 associates due to reduced demand for loan servicing.
• Termination of 210 associates for performance reasons amid a challenging environment.
• Delays in federal student loan repayment continue to affect staffing levels.

LINCOLN, Neb., Jan. 18, 2023 /PRNewswire/ -- Nelnet (NYSE: NNI) today announced changes to manage excess staff capacity due to delays in the government's student debt relief and return to repayment programs. Approximately 350 associates who were hired within the last six months will be laid off and approximately 210 associates will be terminated for performance reasons in the company's Nelnet Diversified Services (NDS) division.

Nelnet has a long history of providing high-quality, customer-focused student loan services—and having highly trained, qualified associates is a key component of that success. Because of Nelnet's commitment to customers, its loan servicing centers have remained open and fully staffed throughout the pandemic and to date. Last year, NDS took steps to grow its loan servicing teams in anticipation of the implementation of the Student Debt Relief Program as well as return to repayment for federal student loans, which was set to occur on December 31, 2022. However, with the U.S. Department of Education's announcement in November that the pause on repayment has been extended to late 2023 and with the Student Debt Relief Program currently in litigation, NDS must now right-size its loan servicing teams to better align with current volume.

"These decisions are never easy," said Ben Kiser, Nelnet's executive director of corporate communications. "With the delay of federal student loan repayment through much of 2023, regrettably, it isn't feasible to maintain increased staffing levels for work that will remain on hold for a significant amount of time."

The approximately 350 associates who will be laid off were hired within the last six months for the primary purpose of meeting the anticipated increase in student loan borrower activity, which was further delayed. A 60-day working notification was given to these associates whose performance was not a factor. Performance was used to identify approximately 210 of the impacted associates.

Kiser added, "We will continue to actively search for opportunities within the organization to redeploy eligible associates, and we hope many will consider reapplying to join our NDS team when repayment does resume."

Nelnet remains committed to supporting the millions of federal student loan borrowers who will be entering repayment when the temporary pause ends later in the year. No additional changes related to staff capacity are planned.

www.nelnetinc.com 

 

View original content:https://www.prnewswire.com/news-releases/nelnet-announces-changes-to-staffing-capacity-in-student-loan-servicing-division-301725196.html

SOURCE Nelnet Diversified Services

FAQ

What staffing changes did Nelnet announce on January 18, 2023?

Nelnet announced the layoff of approximately 350 associates and termination of about 210 associates for performance issues due to delays in federal student loan repayment.

Why is Nelnet laying off associates?

The layoffs are a response to delays in the government’s student debt relief and return to repayment programs, which have impacted the demand for loan servicing.

How many associates will Nelnet lay off in 2023?

Nelnet plans to lay off approximately 350 associates hired in the last six months.

What is Nelnet's commitment to its employees after the layoffs?

Nelnet is committed to searching for opportunities to redeploy eligible associates and encourages them to reapply once loan repayment resumes.

What led to Nelnet's staffing adjustments in its diversified services division?

The adjustments were due to the extended pause on federal student loan repayments and litigation surrounding the Student Debt Relief Program.