Nelnet, Inc. (NNI)

Nelnet reported net income of $66.7 million, or $1.85 per share, for the second quarter of 2026 2.

A year earlier it earned $181.5 million, or $4.97 per share, which included a $175.0 million gain from the partial redemption of its investment in ALLO, a fiber-optic telecommunications company 2.

So the drop is mostly a one-time gain missing from this year's comparison, not a collapse in the businesses 2.

Chief executive Jeff Noordhoek said the quarter included a full quarter of contributions from the Canada servicing acquisition and further consumer portfolio purchases 2.

On 15 September 2026 the board grew from eight to ten members with two new directors, Angela Klein and Edward Pallesen 4.

Nelnet was formed as a Nebraska corporation in 1978 to service federal student loans for two local banks 1.

It grew into a leading originator, holder and servicer of federal student loans, mostly under the Federal Family Education Loan Program, known as FFELP 1.

A 2010 law ended new FFELP loans from 1 July 2010 and moved all new federal student loans to the Department of Education 1.

Nelnet has not made FFELP loans since, but much of its income still comes from the existing portfolio, which shrinks as loans are paid down 1.

To reduce that reliance it expanded its services through internal growth and acquisitions, and launched Nelnet Bank in 2020 1.

It has serviced federally owned student loans for the Department since 2009 1.

Servicing under the Department's new contract went live on 1 April 2024, and Nelnet earns less per borrower under it than under the old one 1.

ALLO, a fiber communication services provider, was a majority-owned subsidiary until a 2020 recapitalization removed it from Nelnet's consolidated statements 1.

In June 2025 ALLO redeemed more than half of Nelnet's voting interest and all of its preferred interest 1.

Nelnet received cash of $410.9 million and recognized a pre-tax gain of $175.0 million, and its voting interest fell from 45 percent to 27 percent 1.

Net income attributable to Nelnet was $428.5 million, or $11.79 per share, in 2025, against $184.0 million, or $5.02 per share, in 2024 1.

In the third quarter of 2025 the loan servicing segment booked $32.9 million of non-recurring revenue on a contract change for services already performed 1.

Loan servicing

Loan Servicing and Systems, branded Nelnet Diversified Services, services student and consumer loans and sells servicing software and outsourced contact-center work 1.

At the end of 2025 it serviced $486.2 billion of loans for 13.2 million borrowers 1.

The Department of Education is the largest customer, at 21 percent of company revenue and 68 percent of this segment's revenue in 2025 1.

On 2 February 2026 Nelnet bought a Canadian servicer for CAD $130.5 million, which manages 2.7 million borrowers 1.

Segment revenue was $132.2 million in the second quarter of 2026, up from $120.7 million, on the Canadian purchase and consumer servicing growth, partly offset by fewer Department borrowers 2.

School payments and technology

Education Technology Services and Payments, branded Nelnet Business Services, sells tuition payment plans, payment processing and school software 1.

FACTS provides services for nearly 12,000 K-12 schools and generated $312 million of revenue in 2025, against $308 million in 2024 1.

Nelnet Campus Commerce serves more than 1,200 colleges and universities and generated $148 million in 2025, against $141 million in 2024 1.

Segment revenue in the second quarter of 2026 was $118.9 million, against $118.2 million a year earlier 2.

Lending and the bank

Asset Generation and Management holds the legacy federally insured loans, a $7.6 billion portfolio at the end of 2025 1.

It also buys Pay Later receivables, which let shoppers split a purchase into installments, a practice begun in the third quarter of 2025 12.

Its consumer loan portfolio grew to $1.21 billion at 30 June 2026 from $411.5 million a year earlier 2.

Nelnet Bank, a Utah-chartered industrial bank, had a $1.64 billion loan portfolio and $2.51 billion of deposits at 30 June 2026, including intercompany deposits 21.

People and problems

Jeff Noordhoek is chief executive officer and Mike Dunlap is executive chairman 23.

The annual report names as risks the volume of loans the Department allocates for servicing, credit and prepayment risk in its loan portfolios, and the use of artificial intelligence 1.

The umbrella, in words

Nelnet is an operating holding company that runs its businesses directly and through wholly owned and majority-owned subsidiaries 1.

Its brands include Nelnet Loan Servicing, Firstmark Services, Sloan Servicing, Nelnet Government Services, FACTS and Nelnet Campus Commerce 1.

The company owns interests in 55 real estate properties, partnering with third parties who run them day to day 1.

It owns 27 percent of the voting interest in ALLO after the June 2025 redemption 1.

Class B common stock carries ten votes a share against one for Class A 1.

Its record holders include Michael S Dunlap, Shelby J Butterfield, their families and related trusts and entities 1.

Headquarters is in Lincoln, Nebraska, with offices owned or leased mainly in Nebraska, Wisconsin and Colorado 1.

The Department's servicing contract has a five-year base period through April 2028, with two two-year extensions and one one-year extension possible 1.

Klein is appointed to a term ending at the 2029 annual meeting and Pallesen to one ending at the 2028 annual meeting 4.

Noordhoek said the company remains focused on investing in its core businesses and on growth, and continues to invest in artificial intelligence and product development 2.

The annual report says interest income on the FFELP portfolio will decline over time as it is paid down, and that the company plans to expand its consumer loan portfolios 1.

No clue on file points to a new direction yet.