Nelnet Enters Federal Student Loan Contract

LINCOLN, Neb. (AP) — Student lender Nelnet Inc. said Thursday it received a contract to service federal student loans from the U.S. Department of Education. Financial terms were not disclosed.

Nelnet said the contract will add to net income, excluding start-up costs of $5 million to $10 million. However it said the profit margins will be lower than its usual levels. It said the loans diversify its revenue and customer base.

Servicing volume will be determined by the Department of Education at first, with future levels determined by performance, including customer satisfaction and default rates.