Service Orientation Leads to Opportunity for Nelnet Consumer Services

Changes in the student lending industry have brought great opportunities to Nelnet Consumer Services. When players like Wells Fargo, Discover, and others sold their student loan portfolios, Nelnet became a logical landing space for their customers. As the nation’s largest and most respected student loan servicer, Nelnet has a proven history of servicing federal student loans since 1978, private student loans for nearly 30 years, and non-education loans for 15 years.

Mark Heiser is a Managing Director for Nelnet focused on business development for Consumer Services and also other areas across the organization. According to Heiser, moving a portfolio to another servicer is a huge decision for companies. He notes, “It has potential business disruptions or customer disruptions they’re afraid of. And they take comfort in knowing that we have a track record and we’ve done this before.”

Heiser explains that boards of directors, chief executive officers, heads of operations, and more can be involved in these decisions. “Having comfort that their portfolio will continue to perform from a credit perspective, that their customers will be taken care of, and that they’ll end up in a better spot is important,” emphasizes Heiser.

Not only does Nelnet have loan servicing expertise, the organization has experience servicing and transferring portfolios on a large scale.

Heiser points out, “The scale at which we operate on the federal side, as you think about corporate competencies in infosecurity, compliance, workforce management, data analytics—these are things that we’ve learned and built across $500+ billion worth of loans. So when I’m talking to somebody that has $1 billion, $5 billion, or $10 billion worth of loans, they see proportionately we have the ability to handle that kind of volume and they feel more comfort. So there’s no doubt that the federal business and our leadership tenure have been a tailwind for us in the consumer business.”

When asked to describe Nelnet’s reputation, Consumer Loan Services President and Managing Director Christy Phillips says, “Nelnet’s reputation in the student loan industry is second to none. We build strong partnerships with our clients based on transparency and trust, we care deeply for the customers we serve, and we are committed to our associates and the communities where we work. Our strength can be seen in the work we do and the outcomes we have achieved.”

Phillips shared that Nelnet Consumer Services’ successful transfer of the Wells Fargo portfolio in 2021 was a similar size to an opportunity that became available at Discover in 2023.

Heiser and Phillips note that a successful 2021 transfer of a Wells Fargo portfolio has played a major role in paving the way for additional opportunities for Nelnet. When the Nelnet team was announced as the winner of the servicing bid for Wells’ $10 billion student loan portfolio, they made the transfer their top priority. “Wells Fargo was the largest conversion of private, non-government guaranteed student loans we’d ever done. For that deal to go well, it created a major catalyst for a large Discover transfer. There’s no doubt that it was a major factor in why we’ve won recent business, too,” offered Heiser.

Adds Phillips, “The Discover opportunity was so similar in size, complexity, and organizational goals to the Wells Fargo portfolio transfer which we had successfully executed in 2021, we knew we were a perfect fit.” She notes, “As we approached the Discover conversion, it was helpful for us to use our playbook and many of the same project leads from our Wells Fargo project.”

Heiser and Phillips agree that these industry opportunities and the scale that comes from these large transfers, coupled with Nelnet’s approach to doing much of the work before the loans are boarded, has created a foundation for more growth for the company.

Adds Heiser, “We’re hitting a real stride right now where our new systems are maturing. Our growth has been phenomenal, with consumer loan business today being 400 times what it was 10 years ago.”

Heiser is quick to point out a key advantage Nelnet offers: “The quantity of veteran leaders that we have with deep experience in this space makes us unique because of the knowledge base we’ve accumulated through the years. Other companies don’t have that. They have turnover. They have new faces. Yes, we built systemic knowledge here at Nelnet, but we’ve got a real advantage in the tenure of the people that are leading these initiatives.”

Phillips has been with Nelnet since 1999. According to Phillips, Nelnet is trusted to handle significant portfolio transfers due to its experience and unique approach. “It’s understanding every servicer has nuances. Their systems work differently. Even if their programs have the same requirements, there are differences in the way systems work. Over time, what you built around your business processes could be significantly different to where it creates a deviation for how the customer will be serviced.”

Phillips adds, “We invest upfront to understand the customer’s experience during the transfer as we take over responsibility for them. We properly disclose and make sure we’re trying to remediate any impact where we can. Care and service is an underpinning of everything we feel like we are.”