How Nelnet Payment Plans Work and What Your Options Are
What Nelnet payment plans do
Nelnet is a loan servicer — a company that collects your monthly payments, tracks your balance, and handles the paperwork for federal student loans and some private loans. When you have a Nelnet payment plan, you are choosing how much you pay each month and over how long. Nelnet does not decide your plan; you do. But Nelnet processes whatever plan you choose and can explain what each one costs you over time.
A payment plan is a contract between you and your loan holder about the size and timing of your payments. Different plans charge different total amounts of interest because they spread payments over different lengths of time. A plan that lets you pay less per month usually means you pay more interest overall. Nelnet's job is to collect the money you owe under whichever plan you pick.
Key Takeaways
- Nelnet is the company that collects your payments; the plan itself is your choice, and you can change it once a year or when your income changes.
- Federal student loan plans include Standard (10 years), income-driven plans (20 to 25 years), and graduated plans, each with different monthly amounts and total interest costs.
- Income-driven plans cap your payment at a percentage of your discretionary income, which can be as low as $0 per month if your income is very low.
- You can see your current plan, change it, and calculate what each plan would cost you by logging into your Nelnet account online or calling their customer service line.
- If you stop paying without changing your plan, your loan enters default, which damages your credit and can trigger wage garnishment or tax refund seizure.
The main federal student loan payment plans
Standard Repayment is the default plan if you do not choose one. It spreads your payments over 10 years in equal monthly amounts. You pay the least total interest this way because you pay off the loan fastest, but your monthly payment is usually the highest of all the plans.
Income-Driven Repayment plans tie your payment to your income rather than to a fixed 10-year timeline. There are four income-driven plans: Revised Pay As You Earn (REPAYE), Pay As You Earn (PAYE), Income-Based Repayment (IBR), and Income-Contingent Repayment (ICR). Each calculates your payment as a percentage of your discretionary income — the difference between your gross income and 150% of the federal poverty line for your family size. If your income is very low, your payment can be $0. These plans stretch repayment over 20 to 25 years, and any balance remaining at the end may be forgiven, though you may owe taxes on the forgiven amount.
Graduated Repayment starts with a lower payment that increases every two years, ending after 10 years. It is designed for borrowers whose income is expected to rise over time. You pay more total interest than Standard but less than most income-driven plans.
How to change your payment plan with Nelnet
Log into your Nelnet account at nelnet.com or call 1-855-NELNET-1 (1-855-635-6381). You can change your plan once per year, or immediately if your income has changed significantly or you have experienced a major life event like job loss or a change in family size.
When you request a change, Nelnet will ask for your current income and family size if you are switching to an income-driven plan. You can provide your most recent tax return, a recent pay stub, or an estimate of your current income. Nelnet will calculate what your payment would be under each plan and show you the monthly amount and the total interest you would pay over the life of the loan.
Your new plan takes effect on your next billing cycle, usually within 30 days. Your payment due date may shift, so check your account after the change is processed to see when your first payment under the new plan is due.
What happens if you cannot afford your current payment
If your payment is too high, do not skip it. Instead, contact Nelnet and ask about a plan change. If you are on Standard Repayment, switching to an income-driven plan can lower your payment to as little as $0 per month. If you are already on an income-driven plan and your income has dropped, you can recertify your income to lower your payment further.
Nelnet also offers deferment and forbearance, which temporarily pause or reduce your payments. Deferment is available if you are unemployed, in school, or in certain other hardship situations; during deferment, the government pays the interest on subsidized loans, but interest still accrues on unsubsidized loans. Forbearance is available to anyone and pauses payments for up to 12 months, but interest accrues on all loans during forbearance. Both options are temporary and do not erase what you owe.
If you do not contact Nelnet and do not make a payment for 90 days, your loan is reported as delinquent to credit bureaus. After 270 days without payment, your loan enters default. Once in default, you may face wage garnishment, tax refund seizure, and a damaged credit score that affects your ability to borrow for a car, home, or credit card.
Private loans and Nelnet payment plans
Nelnet also services some private student loans. Private loans do not have the same plan options as federal loans. Your payment plan is usually set by the terms of your loan agreement, and you may have limited ability to change it. Some private lenders allow you to switch between a fixed-rate and variable-rate payment, or to extend your repayment term, but the options depend on your specific loan.
If you have a private loan with Nelnet and cannot afford your payment, contact Nelnet directly to ask what options exist. Private lenders are not required to offer income-driven plans or forbearance, so your options may be narrower than with federal loans.
How to calculate the true cost of each plan
Nelnet's website and customer service can show you a comparison of plans. When you log in, you can use the repayment plan calculator to see the monthly payment and total interest cost for each plan based on your current loan balance and interest rate. This tool is useful for understanding the trade-off: a lower monthly payment usually means more total interest paid over time.
For example, if you owe $30,000 at 5% interest, Standard Repayment might cost you $300 per month for 10 years and $6,000 in total interest. An income-driven plan might cost you $200 per month for 25 years and $30,000 in total interest — a lower monthly payment but much more interest overall. The calculator lets you see these numbers before you commit to a plan.
What to do if you disagree with Nelnet's records
If you believe Nelnet has made an error — a payment was not credited, your balance is wrong, or your plan was not changed as you requested — contact Nelnet in writing. Send a letter to the address on your billing statement, or use the dispute form on Nelnet's website. Describe the error, include copies of any supporting documents (pay stubs, bank statements, confirmation emails), and keep a copy for yourself.
Nelnet must investigate and respond within 30 days. If you are not satisfied with the response, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov. The CFPB does not resolve individual disputes but tracks complaints and can take action if a pattern of errors emerges.
Frequently Asked Questions
Can I change my payment plan more than once a year?
You can change once per year on a regular schedule. If your income has changed significantly — you lost your job, your hours were cut, or your family size changed — you can request an immediate change outside the annual window. Contact Nelnet and explain the change in your circumstances.
What is the difference between deferment and forbearance?
Both pause or reduce payments temporarily. With deferment, the government pays interest on subsidized federal loans, but you still owe interest on unsubsidized loans. With forbearance, interest accrues on all loans. Deferment is available only in specific hardship situations; forbearance is available to anyone. Both are temporary and do not erase your debt.
If I switch to an income-driven plan, will my payment ever go up?
Yes. Your payment is recalculated each year based on your current income. If your income rises, your payment rises. If your income falls, your payment falls. You must recertify your income annually to keep your payment accurate.
What happens to my loan if I do not make a payment?
After 90 days, your loan is reported as delinquent and damages your credit. After 270 days, it enters default, which can trigger wage garnishment, tax refund seizure, and make it difficult to borrow money in the future. Contact Nelnet before you miss a payment to discuss a plan change or temporary relief.
Can Nelnet forgive my loan?
Nelnet does not forgive loans; it only collects payments. However, if you are on an income-driven plan and make payments for 20 to 25 years, any remaining balance may be forgiven by the government. You may owe taxes on the forgiven amount. Some federal loans also may have access to for forgiveness programs like Public Service Loan Forgiveness if you work in certain fields.