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Nelnet
NNI
#3223
Rank
$4.59 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$128.15
Share price
-0.63%
Change (1 day)
16.08%
Change (1 year)
๐Ÿ’ณ Financial services
Categories
  1. Nelnet
  2. Quarterly Reports (10-Q)
  3. Financial Year FY2025 Q3

Nelnet - 10-Q quarterly report FY2025 Q3


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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2025 
or    
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from  to . 
Commission File Number: 001-31924
Nelnet_Logo_color.jpg
NELNET, INC.
(Exact name of registrant as specified in its charter)
Nebraska
84-0748903
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
121 South 13th Street, Suite 100
Lincoln,Nebraska68508
(Address of principal executive offices)
(Zip Code)
(402) 458-2370
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A Common Stock, Par Value $0.01 per ShareNNINew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                    Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                             Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒                    Accelerated filer ☐
Non-accelerated filer ☐                    Smaller reporting company ☐
        Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 31, 2025, there were 25,316,448 and 10,616,675 shares of Class A Common Stock and Class B Common Stock, par value $0.01 per share, outstanding, respectively (excluding 11,305,731 shares of Class A Common Stock held by wholly owned subsidiaries).




NELNET, INC.
FORM 10-Q
INDEX
September 30, 2025







PART I. FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
NELNET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
(unaudited)
 
As of
As of
 September 30, 2025December 31, 2024
Assets:  
Loans and accrued interest receivable (net of allowance for loan losses of $107,532 and $114,890, respectively)
$10,227,261 9,992,744 
Cash and cash equivalents:  
Cash and cash equivalents - not held at a related party126,956 48,838 
Cash and cash equivalents - held at a related party89,469 145,680 
Total cash and cash equivalents216,425 194,518 
Investments and notes receivable:
Investments at fair value1,391,888 1,160,320 
Other investments and notes receivable, net847,637 1,040,376 
Total investments and notes receivable2,239,525 2,200,696 
Restricted cash394,074 332,100 
Restricted cash - due to customers156,297 404,402 
Accounts receivable (net of allowance for doubtful accounts of $2,831 and $2,877, respectively)
147,822 159,934 
Goodwill158,029 158,029 
Intangible assets, net31,754 36,328 
Property and equipment, net93,174 95,185 
Other assets212,321 203,817 
Total assets$13,876,682 13,777,753 
Liabilities:  
Bonds and notes payable$7,822,531 8,309,797 
Accrued interest payable19,039 21,046 
Bank deposits1,476,765 1,186,131 
Other liabilities528,917 483,193 
Due to customers442,735 478,469 
Total liabilities10,289,987 10,478,636 
Commitments and contingencies
Equity:
Nelnet, Inc. shareholders' equity:  
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no shares issued or outstanding
— — 
Common stock:
Class A, $0.01 par value. Authorized 600,000,000 shares; issued and outstanding 25,375,537
     shares and 25,634,748 shares, respectively
254 256 
Class B, convertible, $0.01 par value. Authorized 60,000,000 shares; issued and outstanding
     10,616,675 shares and 10,658,604 shares, respectively
106 107 
Additional paid-in capital1,058 7,389 
Retained earnings3,648,375 3,340,540 
Accumulated other comprehensive earnings, net3,497 1,470 
Total Nelnet, Inc. shareholders' equity3,653,290 3,349,762 
Noncontrolling interests(66,595)(50,645)
Total equity3,586,695 3,299,117 
Total liabilities and equity$13,876,682 13,777,753 
Supplemental information - assets and liabilities of consolidated education and other lending variable-interest entities:
Loans and accrued interest receivable$8,981,044 9,122,609 
Restricted cash376,029 287,389 
Bonds and notes payable(8,363,733)(8,452,614)
Accrued interest payable and other liabilities(172,765)(88,200)
Net assets of consolidated education and other lending variable-interest entities$820,575 869,184 
See accompanying notes to consolidated financial statements.
2


NELNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except share data)
(unaudited)
 Three months endedNine months ended
 September 30,September 30,
 2025202420252024
Interest income:  
Loan interest$162,717 190,211 501,260 609,064 
Investment interest43,241 50,272 124,815 143,086 
Total interest income205,958 240,483 626,075 752,150 
Interest expense on bonds and notes payable and bank deposits120,708 168,328 378,677 539,367 
Net interest income85,250 72,155 247,398 212,783 
Less (negative provision) provision for loan losses(3,563)18,111 29,704 32,551 
Net interest income after provision for loan losses88,813 54,044 217,694 180,232 
Other income (expense): 
Loan servicing and systems revenue151,052 108,175 392,517 344,428 
Education technology services and payments revenue129,321 118,179 394,836 378,627 
Reinsurance premiums earned23,165 16,619 73,964 44,250 
Solar construction revenue5,738 19,321 10,992 42,741 
Other, net35,730 15,706 82,401 33,807 
Loss on sale of loans, net(2,472)(107)(1,562)(1,685)
Gain on partial redemption of ALLO investment— — 175,044 — 
Derivative market value adjustments and derivative settlements, net(27)(11,525)(8,728)1,378 
Total other income (expense), net342,507 266,368 1,119,464 843,546 
Cost of services and expenses:
Loan servicing contract fulfillment and acquisition costs2,021 196 5,500 392 
Cost to provide education technology services and payments50,363 45,273 138,254 134,106 
Cost to provide solar construction services7,607 26,815 29,485 49,115 
Total cost of services59,991 72,284 173,239 183,613 
Salaries and benefits144,778 146,192 417,700 429,701 
Depreciation and amortization7,327 13,661 24,206 45,572 
Reinsurance losses and underwriting expenses19,962 16,761 67,836 39,066 
Other expenses53,669 44,685 153,200 138,820 
Total operating expenses225,736 221,299 662,942 653,159 
Impairment expense and provision for beneficial interests9,145 29,052 21,024 36,865 
Total expenses294,872 322,635 857,205 873,637 
Income (loss) before income taxes136,448 (2,223)479,953 150,141 
Income tax (expense) benefit(35,773)282 (120,294)(37,653)
Net income (loss)100,675 (1,941)359,659 112,488 
Net loss attributable to noncontrolling interests6,009 4,329 11,044 8,398 
Net income attributable to Nelnet, Inc.$106,684 2,388 370,703 120,886 
Earnings per common share:
Net income attributable to Nelnet, Inc. shareholders - basic and diluted$2.94 0.07 10.18 3.29 
Weighted average common shares outstanding - basic and diluted
36,316,315 36,430,485 36,426,188 36,703,314 
    
See accompanying notes to consolidated financial statements.
3


NELNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(unaudited)
Three months ended September 30,Nine months ended September 30,
2025202420252024
Net income (loss)$100,675 (1,941)359,659 112,488 
Other comprehensive income:
Net changes related to foreign currency translation adjustments$(13)23 (160)6 
Net changes related to available-for-sale debt securities:
Unrealized holding gains arising during period, net 8,637 2,656 5,212 28,291 
Reclassification of gains recognized in net income, net(854)(1,721)(1,931)(3,326)
Amortization of net unrealized loss on securities transferred from available-for-sale to held-to-maturity27 64 168 186 
Income tax effect(1,874)5,936 (240)759 (828)2,621 (6,036)19,115 
Net changes related to cash flow hedges:
Fair value adjustments during period, net(130)— (755)— 
Income tax effect31 (99)— — 181 (574)— — 
Net changes related to equity method investee's other comprehensive income:
(Loss) gain on cash flow hedge(156)62 184 (570)
Income tax effect37 (119)(15)47 (44)140 137 (433)
Other comprehensive income5,705 829 2,027 18,688 
Comprehensive income (loss)106,380 (1,112)361,686 131,176 
Comprehensive loss attributable to noncontrolling interests6,009 4,329 11,044 8,398 
Comprehensive income attributable to Nelnet, Inc.$112,389 3,217 372,730 139,574 

See accompanying notes to consolidated financial statements.
4


NELNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in thousands, except share data)
(unaudited)
 
Nelnet, Inc. Shareholders
 Preferred stock sharesCommon stock sharesPreferred stockClass A common stockClass B common stockAdditional paid-in capital Retained earningsAccumulated other comprehensive (loss) earningsNoncontrolling interestsTotal equity
 Class AClass B
Balance as of June 30, 2024—25,585,84010,663,088$— 256 107 657 3,295,301 (2,260)(74,039)3,220,022 
Net income (loss)———— — — — 2,388 — (4,329)(1,941)
Other comprehensive income———— — — — — 829 — 829 
Issuance of noncontrolling interests———— — — — — — 20,999 20,999 
Distribution to noncontrolling interests———— — — — — — (23,145)(23,145)
Cash dividends on Class A and Class B common stock - $0.28 per share
———— — — — (10,148)— — (10,148)
Issuance of common stock, net of forfeitures—46,865—— — — 1,230 — — — 1,230 
Compensation expense for stock based awards———— — — 2,868 — — — 2,868 
Repurchase of common stock—(5,259)—— — — (576)— — — (576)
Balance as of September 30, 2024—25,627,44610,663,088$— 256 107 4,179 3,287,541 (1,431)(80,514)3,210,138 
Balance as of June 30, 2025—25,538,73010,658,604$— 255 107 637 3,576,192 (2,208)(92,290)3,482,693 
Net income (loss)———— — — — 106,684 — (6,009)100,675 
Other comprehensive income———— — — — — 5,705 — 5,705 
Issuance of noncontrolling interests———— — — — — — 39,404 39,404 
Distribution to noncontrolling interests———— — — — — — (7,700)(7,700)
Cash dividends on Class A and Class B common stock - $0.30 per share
———— — — — (10,834)— — (10,834)
Issuance of common stock, net of forfeitures—12,728—— — — 557 — — — 557 
Compensation expense for stock based awards———— — — 3,468 — — — 3,468 
Repurchase of common stock—(217,850)—— (2)— (3,604)(23,667)— — (27,273)
Conversion of common stock—41,929(41,929)— 1 (1)— — — — — 
Balance as of September 30, 2025—25,375,53710,616,675$— 254 106 1,058 3,648,375 3,497 (66,595)3,586,695 

See accompanying notes to consolidated financial statements.
5


NELNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Dollars in thousands, except share data)
(unaudited)
Nelnet, Inc. Shareholders
Preferred stock sharesCommon stock sharesPreferred stockClass A common stockClass B common stockAdditional paid-in capitalRetained earningsAccumulated other comprehensive (loss) earningsNoncontrolling interestsTotal equity
Class AClass B
Balance as of December 31, 2023—26,400,63010,663,088$— 264 107 3,096 3,270,403 (20,119)(53,644)3,200,107 
Net income (loss)———— — — — 120,886 — (8,398)112,488 
Other comprehensive income———— — — — — 18,688 — 18,688 
Issuance of noncontrolling interests———— — — — — — 29,150 29,150 
Distribution to noncontrolling interests———— — — — — — (49,715)(49,715)
Cash dividends on Class A and Class B common stock - $0.84 per share
———— — — — (30,676)— — (30,676)
Issuance of common stock, net of forfeitures—116,779—— 1 — 4,526 — — — 4,527 
Compensation expense for stock based awards———— — — 8,703 — — — 8,703 
Repurchase of common stock—(889,963)—— (9)— (12,146)(70,732)— — (82,887)
Acquisition of remaining 20% of GRNE Solar, net of tax
———— — — — (2,340)— 2,093 (247)
Balance as of September 30, 2024—25,627,44610,663,088$— 256 107 4,179 3,287,541 (1,431)(80,514)3,210,138 
Balance as of December 31, 2024—25,634,74810,658,604$— 256 107 7,389 3,340,540 1,470 (50,645)3,299,117 
Net income (loss)———— — — — 370,703 — (11,044)359,659 
Other comprehensive income———— — — — — 2,027 — 2,027 
Issuance of noncontrolling interests———— — — — — — 45,583 45,583 
Distribution to noncontrolling interests———— — — — — — (45,106)(45,106)
Cash dividends on Class A and Class B common stock - $0.86 per share
———— — — — (31,157)— — (31,157)
Issuance of common stock, net of forfeitures—138,755—— 1 — 3,373 — — — 3,374 
Compensation expense for stock based awards———— — — 9,819 — — — 9,819 
Repurchase of common stock—(439,895)—— (4)— (19,523)(33,564)— — (53,091)
Conversion of common stock—41,929(41,929)— 1 (1)— — — — — 
Acquisition of remaining 20% of NextGen, net of tax
———— — — — 1,853 — (5,383)(3,530)
Balance as of September 30, 2025—25,375,53710,616,675$— 254 106 1,058 3,648,375 3,497 (66,595)3,586,695 

See accompanying notes to consolidated financial statements.
6


NELNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
 Nine months ended
September 30,
 20252024
Net income attributable to Nelnet, Inc.$370,703 120,886 
Net loss attributable to noncontrolling interests(11,044)(8,398)
Net income359,659 112,488 
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisitions:  
Depreciation and amortization, including debt discounts and loan premiums and deferred origination costs68,261 106,022 
Loan discount and deferred lender fees accretion(58,107)(36,838)
Provision for loan losses29,704 32,551 
Derivative market value adjustments10,978 3,668 
Payments to clearinghouse - initial and variation margin, net(5,015)(4,404)
Gain on partial redemption of ALLO investment(175,044)— 
Loss on sale of loans, net1,562 1,685 
(Gain) loss on investments, net(47,076)6,595 
Loss from repurchases of debt, net7,865 2 
Deferred income tax benefit(82,465)(22,707)
Non-cash compensation expense10,064 8,954 
Impairment expense and provision for beneficial interests21,024 36,865 
Changes in operating assets and liabilities:
Decrease in loan and investment accrued interest receivable14,894 168,795 
Decrease in accounts receivable12,219 42,553 
Decrease in other assets43,488 48,057 
Decrease in the carrying amount of ROU asset2,865 2,857 
Decrease in accrued interest payable(6,329)(10,002)
Increase (decrease) in other liabilities79,713 (11,435)
Decrease in the carrying amount of lease liability(4,365)(2,868)
Other1,475 (481)
Total adjustments(74,289)369,869 
Net cash provided by operating activities285,370 482,357 
Cash flows from investing activities, net of acquisitions:
 
 
Purchases and originations of loans, including cash paid for student loan trusts,
net of cash and restricted cash acquired		(1,984,778)(611,595)
Purchases of loans from a related party(206,668)(104,198)
Net proceeds from loan repayments, claims, and capitalized interest2,081,162 2,745,084 
Proceeds from sale of loans240,398 91,999 
Proceeds from sale of loans to a related party290,164 199,694 
Purchases of available-for-sale securities(416,084)(414,306)
Proceeds from sales of available-for-sale securities205,954 372,176 
Proceeds from beneficial interest in loan securitizations55,865 33,898 
Purchases of other investments and issuance of notes receivable(249,990)(287,590)
Proceeds from other investments and repayments of notes receivable511,219 79,095 
Redemption of held-to-maturity debt securities10,549 11,890 
Purchases of property and equipment(18,744)(38,280)
Net cash provided by investing activities$519,047 2,077,867 
7


NELNET, INC. AND SUBSIDIARIES (Continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
 Nine months ended
September 30,
 20252024
Cash flows from financing activities, net of acquisitions:  
Payments on bonds and notes payable$(1,739,244)(3,010,914)
Proceeds from issuance of bonds and notes payable557,371 85,037 
Payments of debt issuance costs(4,803)(2,191)
Increase in bank deposits, net290,634 327,159 
Decrease in due to customers(35,862)(21,185)
Dividends paid(31,157)(30,676)
Repurchases of common stock(53,091)(82,887)
Proceeds from issuance of common stock1,392 1,424 
Acquisition of noncontrolling interest(3,944)(325)
Issuance of noncontrolling interests54,984 51,245 
Distribution to noncontrolling interests(5,211)(3,587)
Net cash used in financing activities(968,931)(2,686,900)
Effect of exchange rate changes on cash and restricted cash290 203 
Net decrease in cash, cash equivalents, and restricted cash(164,224)(126,473)
Cash, cash equivalents, and restricted cash, beginning of period931,020 1,025,491 
Cash, cash equivalents, and restricted cash, end of period$766,796 899,018 
Supplemental disclosures of cash flow information:
Cash disbursements made for interest$360,648 511,247 
Cash disbursements made for income taxes, net of refunds and credits received (a)$50,443 13,441 
Cash disbursements made for operating leases$3,933 3,615 
Non-cash operating, investing, and financing activity:
ROU assets obtained in exchange for lease obligations$6,550 1,048 
Receipt of beneficial interest in consumer loan securitizations as consideration from sale of loans$28,137 13,799 
Receipt of asset-backed investment securities as consideration from sale of loans$2,370 — 
Distribution to noncontrolling interests$39,895 46,128 
Issuance of noncontrolling interests$9,401 22,095 
(a) The Company utilized $43.8 million and $34.0 million of federal and state tax credits related primarily to renewable energy during the nine months ended September 30, 2025 and 2024, respectively.
Supplemental disclosures of non-cash activities regarding the Company's acquisition of certain student loan trusts are contained in note 3.
The following table presents a reconciliation of cash, cash equivalents, and restricted cash reported in the consolidated balance sheets to the total of the amounts reported in the consolidated statements of cash flows:
As ofAs ofAs ofAs of
September 30, 2025December 31, 2024September 30, 2024December 31, 2023
Total cash and cash equivalents$216,425 194,518 219,684 168,112 
Restricted cash394,074 332,100 344,366 488,723 
Restricted cash - due to customers156,297 404,402 334,968 368,656 
Cash, cash equivalents, and restricted cash
$766,796 931,020 899,018 1,025,491 
See accompanying notes to consolidated financial statements.
8


NELNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts, unless otherwise noted)
(unaudited)
1.  Basis of Financial Reporting
The accompanying unaudited consolidated financial statements of Nelnet, Inc. and subsidiaries (the “Company” or "Nelnet") as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2024 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results for the year ending December 31, 2025. The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report").
2.  Partial Redemption of ALLO Investment
Nelnet had both voting and preferred membership interest investments in ALLO Holdings, LLC (referred to collectively with its subsidiary ALLO Communications LLC as "ALLO"). In June 2025, ALLO executed a financing transaction that resulted in gross proceeds to ALLO of $500 million (the “Financing”). In conjunction with the Financing, Nelnet, ALLO, and certain other ALLO investors entered into a Membership Unit Redemption Agreement (the “Redemption Agreement”) pursuant to which ALLO agreed to redeem certain of its membership interests from certain investors in ALLO, including Nelnet (the “Transaction”).
As part of the Transaction, ALLO redeemed all of Nelnet's outstanding preferred membership interests on June 4, 2025, including the preferred return accrued on such membership interests through the Transaction's closing date. In addition, ALLO redeemed a portion of Nelnet’s voting membership interest in ALLO.
Upon closing, Nelnet received cash proceeds of $410.9 million from ALLO for these redemptions and recognized a pre-tax gain of $175.0 million, which is included in "gain on partial redemption of ALLO investment" on the Company's consolidated statements of income.
Following the closing of the Transaction, Nelnet no longer owns any preferred membership interests in ALLO, but maintains a significant voting equity investment in ALLO. Nelnet’s ownership of voting membership interest in ALLO decreased from 45% to 27%. Nelnet will continue to account for its remaining 27% voting membership interest in ALLO under the Hypothetical Liquidation at Book Value (HLBV) method of accounting, with the carrying value of such interest remaining at $0.

9


3.  Loans and Accrued Interest Receivable and Allowance for Loan Losses
Loans and accrued interest receivable consisted of the following:
As ofAs of
 September 30, 2025December 31, 2024
Non-Nelnet Bank:
Federally insured loans:
Stafford and other$1,889,476 2,108,960 
Consolidation5,970,781 6,279,604 
Total (a)7,860,257 8,388,564 
Private education loans (b)147,737 221,744 
Consumer loans and other financing receivables (c)840,739 345,560 
Non-Nelnet Bank loans8,848,733 8,955,868 
Nelnet Bank:
Federally insured loans:
Stafford and other24,745 — 
Consolidation154,203 — 
Total (a)178,948 — 
Private education loans (b)529,396 482,445 
Consumer and other loans266,539 162,152 
Nelnet Bank loans974,883 644,597 
Accrued interest receivable558,912 549,283 
Loan discount and deferred lender fees, net of unamortized loan premiums and deferred origination costs(47,735)(42,114)
Allowance for loan losses:
Non-Nelnet Bank:
Federally insured loans(43,535)(49,091)
Private education loans(7,103)(11,130)
Consumer loans and other financing receivables(33,147)(38,468)
Non-Nelnet Bank allowance for loan losses(83,785)(98,689)
Nelnet Bank:
Federally insured loans(707)— 
Private education loans(11,732)(10,086)
Consumer and other loans(11,308)(6,115)
Nelnet Bank allowance for loan losses(23,747)(16,201)
 $10,227,261 9,992,744 
(a)    During the third quarter of 2025, the Asset Generation and Management operating segment (Non-Nelnet Bank) contributed $77.5 million of federally insured loans to Nelnet Bank.
(b)    During the second quarter of 2025, the Asset Generation and Management operating segment (Non-Nelnet Bank) contributed $42.2 million of private education loans to Nelnet Bank.
(c)    In the third quarter of 2025, the Company began to purchase Pay Later receivables via a forward flow agreement from an unrelated third party. As of September 30, 2025, the balance of Pay Later receivables was $548.3 million and these loans are included in the "consumer loans and other financing receivables" in the above table. Pay Later receivables enable consumers to purchase goods or services at the time of the transaction and split their purchase into installment payments. The Company purchases Pay Later receivables at a discount, and accretes the discount into interest income over the estimated life of the receivable.
10


The following table summarizes the allowance for loan losses as a percentage of the ending loan balance for each of the Company's loan portfolios:
As ofAs of
September 30, 2025December 31, 2024
Non-Nelnet Bank:
Federally insured loans (a)0.55 %0.59 %
Private education loans4.81 %5.02 %
Consumer loans and other financing receivables (b)3.94 %11.13 %
Nelnet Bank:
Federally insured loans (a)0.40 %— 
Private education loans2.22 %2.09 %
Consumer and other loans4.24 %3.77 %
(a)    The allowance for loan losses as a percent of the risk sharing component of federally insured student loans not covered by the federal guaranty for Non-Nelnet Bank was 19.4% and 20.6% as of September 30, 2025 and December 31, 2024, respectively, and for Nelnet Bank was 17.4% as of September 30, 2025.
(b)    In the third quarter of 2025, the Company began to purchase Pay Later receivables that have lower allowance rates.
Consumer Loan Sales
During the second quarter of 2024 and third quarter of 2025, the Company sold $133.8 million and $203.3 million, respectively, of consumer loans, and recognized losses from such transactions of $1.4 million and $2.5 million, respectively. For these transactions, the Company sold portfolios of loans to unrelated third parties who securitized such loans. As partial consideration received for the loans sold, the Company received a residual interest in the loan securitization that are included in "other investments and notes receivable, net" on the Company's consolidated balance sheets.
Student Loan Trust Acquisitions
In March 2025, the Company acquired the ownership interests in certain trusts giving the Company rights to the residual interest. The trusts included $646.9 million (par value) of federally insured Stafford and consolidation loans funded to term with $721.3 million (par value) of bonds and notes payable, $32.2 million of cash and restricted cash, and $27.4 million of other net assets. The Company has consolidated these trusts on its consolidated balance sheet as the Company is the primary beneficiary of the trusts. Upon acquisition, the Company recorded the student loans and bonds and notes payable at fair value, resulting in the recognition of a student loan net discount of $6.6 million and a bonds and notes payable discount of $31.1 million. These net discounts will be accreted using the effective interest method over the lives of the underlying assets and liabilities.
11


Activity in the Allowance for Loan Losses
The following table presents the activity in the allowance for loan losses by portfolio segment:
Balance at beginning of periodProvision (negative provision) for loan losses (a)Charge-offsRecoveriesInitial allowance on loans purchased with credit deteriorationLoan salesBalance at end of period
Three months ended September 30, 2025
Non-Nelnet Bank:
Federally insured loans$47,627 843 (4,673)— — (262)43,535 
Private education loans7,406 — (459)156 — — 7,103 
Consumer loans and other financing receivables48,028 (8,217)(7,176)512 — — 33,147 
Nelnet Bank:
Federally insured loans355 113 (23)— — 262 707 
Private education loans12,360 1,177 (2,169)364 — — 11,732 
Consumer and other loans9,573 2,186 (581)130 — — 11,308 
$125,349 (3,898)(15,081)1,162 — — 107,532 
Three months ended September 30, 2024
Non-Nelnet Bank:
Federally insured loans$54,180 1,247 (4,593)— — — 50,834 
Private education loans13,065 (126)(1,414)219 — — 11,744 
Consumer loans and other financing receivables14,135 10,847 (2,981)379 — — 22,380 
Nelnet Bank:
Private education loans3,559 565 (892)438 — — 3,670 
Consumer and other loans11,825 5,326 (3,830)193 — — 13,514 
$96,764 17,859 (13,710)1,229 — — 102,142 
Nine months ended September 30, 2025
Non-Nelnet Bank:
Federally insured loans$49,091 5,588 (10,882)— — (262)43,535 
Private education loans11,130 (2,761)(1,916)650 — — 7,103 
Consumer loans and other financing receivables38,468 13,943 (20,319)1,055 — — 33,147 
Nelnet Bank:
Federally insured loans— 488 (43)— — 262 707 
Private education loans10,086 5,102 (5,303)787 1,060 — 11,732 
Consumer and other loans6,115 6,920 (2,029)302 — — 11,308 
$114,890 29,280 (40,492)2,794 1,060 — 107,532 
Nine months ended September 30, 2024
Non-Nelnet Bank:
Federally insured loans$68,453 (2,593)(15,026)— — — 50,834 
Private education loans15,750 (392)(4,254)640 — — 11,744 
Consumer loans and other financing receivables11,742 17,184 (7,567)1,021 — — 22,380 
Nelnet Bank:
Private education loans3,347 1,576 (1,796)543 — — 3,670 
Consumer and other loans5,351 16,563 (8,635)235 — — 13,514 
$104,643 32,338 (37,278)2,439 — — 102,142 

12


(a) Once a loan is classified as held for sale, any allowance for loan losses that existed immediately prior to the reclassification to held for sale is reversed through provision. The following table presents the reduction to provision for loan losses as a result of consumer loan sales during the periods presented.
Provision for current periodReduction to provisionProvision
(negative provision) for loan losses
Three months ended September 30, 2025
Non-Nelnet Bank
Consumer loans and other financing receivables$20,693 (28,910)(8,217)
Three months ended September 30, 2024
Non-Nelnet Bank
Consumer loans and other financing receivables$11,026 (179)10,847 
Nine months ended September 30, 2025
Non-Nelnet Bank
Consumer loans and other financing receivables$42,853 (28,910)13,943 
Nine months ended September 30, 2024
Non-Nelnet Bank
Consumer loans and other financing receivables$30,058 (12,874)17,184 
During the periods presented above, the primary item impacting provision for loan losses was the establishment of an initial allowance for loans originated and acquired during the periods. Provision for loan losses was also impacted by the reversal of provision for consumer loans sold. The Company recorded a negative provision for loan losses for its federally insured loan portfolio in 2024 due to an increase in prepayment assumptions.
The following table summarizes annualized net charge-offs as a percentage of average loans for each of the Company's loan portfolios:
Three months ended September 30,Nine months ended September 30,
2025202420252024
Non-Nelnet Bank:
Federally insured loans0.22 %0.19 %0.17 %0.19 %
Private education loans0.79 %1.97 %0.95 %1.89 %
Consumer loans and other financing receivables5.75 %4.81 %6.28 %4.92 %
Nelnet Bank:
Federally insured loans0.06 %— 0.06 %— 
Private education loans1.38 %0.51 %1.19 %0.46 %
Consumer and other loans (a)0.79 %7.28 %1.21 %7.49 %
(a)    Decrease in annualized net charge-offs as a percentage of average loans was due to a change in mix of consumer loan portfolios that resulted in a portfolio of loans with an overall higher credit quality in 2025 compared with 2024 and Nelnet Bank exiting a consumer loan program in December 2024 that had previously incurred significant charge-offs.

13


Unfunded Loan Commitments
As of September 30, 2025 and December 31, 2024, Nelnet Bank had a liability of approximately $751,000 and $326,000, respectively, related to $80.1 million and $40.7 million, respectively, of unfunded private education, consumer, and other loan commitments. When a new loan commitment is made, the Company records an allowance that is included in "other liabilities" on the consolidated balance sheet by recording a provision for loan losses. When the loan is funded, the Company transfers the liability to the allowance for loan losses. Below is a reconciliation of the provision for loan losses reported in the consolidated statements of income.
Three months endedNine months ended
September 30,September 30,
2025202420252024
(Negative provision) provision for loan losses from allowance activity table above$(3,898)17,859 29,280 32,338 
Provision for unfunded loan commitments335 252 424 213 
(Negative provision) provision for loan losses reported in consolidated statements of income$(3,563)18,111 29,704 32,551 
Key Credit Quality Indicators
Loan Status and Delinquencies
Key credit quality indicators for the Company’s federally insured, private education, and consumer and other loan portfolios are loan status, including delinquencies. The impact of changes in loan status is incorporated into the allowance for loan losses calculation. Delinquencies have the potential to adversely impact the Company’s earnings through increased servicing and collection costs and account charge-offs. Loans in repayment include loans on which borrowers are making interest only or fixed payments, as well as loans that have entered full principal and interest repayment status after any applicable grace period. The following table presents the Company’s loan status and delinquency amounts:
As of September 30, 2025As of December 31, 2024As of September 30, 2024
Federally insured loans - Non-Nelnet Bank:    
Loans in-school/grace/deferment $382,850 4.9 % $376,765 4.5 % $428,013 4.7 %
Loans in forbearance 514,385 6.5  586,412 7.0  647,797 7.2 
Loans in repayment status:  
Loans current5,994,951 86.1 %6,374,897 85.9 %6,702,079 83.8 %
Loans delinquent 31-60 days254,998 3.7 243,348 3.3 348,833 4.4 
Loans delinquent 61-90 days166,763 2.4 166,474 2.2 190,379 2.4 
Loans delinquent 91-120 days100,575 1.4 113,838 1.5 148,417 1.9 
Loans delinquent 121-270 days317,151 4.6 380,823 5.1 419,730 5.2 
Loans delinquent 271 days or greater128,584 1.8 146,007 2.0 185,494 2.3 
Total loans in repayment6,963,022 88.6 100.0 %7,425,387 88.5 100.0 %7,994,932 88.1 100.0 %
Total federally insured loans7,860,257 100.0 % 8,388,564 100.0 % 9,070,742 100.0 %
Accrued interest receivable537,303 540,272 592,250 
Loan discount, net of unamortized premiums and deferred origination costs(24,895)(21,513)(22,807)
Allowance for loan losses(43,535)(49,091)(50,834)
Total federally insured loans and accrued interest receivable, net of allowance for loan losses$8,329,130 $8,858,232 $9,589,351 
Private education loans - Non-Nelnet Bank:
Loans in-school/grace/deferment $4,232 2.9 %$5,997 2.7 %$7,504 3.2 %
Loans in forbearance 2,653 1.8 2,089 0.9 1,979 0.8 
Loans in repayment status:
Loans current137,678 97.8 %206,825 96.8 %218,425 97.2 %
Loans delinquent 31-60 days1,314 0.9 3,424 1.6 3,013 1.3 
Loans delinquent 61-90 days865 0.6 1,275 0.6 1,301 0.6 
Loans delinquent 91 days or greater995 0.7 2,134 1.0 2,073 0.9 
Total loans in repayment140,852 95.3 100.0 %213,658 96.4 100.0 %224,812 96.0 100.0 %
Total private education loans147,737 100.0 % 221,744 100.0 % 234,295 100.0 %
Accrued interest receivable1,291 2,019 2,248 
Loan discount, net of unamortized premiums(4,740)(6,350)(6,772)
Allowance for loan losses(7,103)(11,130)(11,744)
Total private education loans and accrued interest receivable, net of allowance for loan losses$137,185 $206,283 $218,027 
14


As of September 30, 2025As of December 31, 2024As of September 30, 2024
Consumer loans and other financing receivables - Non-Nelnet Bank:
Loans in deferment$1,354 0.2 %$150 0.0 %$315 0.1 %
Loans in repayment status:
Loans current828,408 98.7 %335,355 97.1 %239,128 97.9 %
Loans delinquent 31-60 days3,543 0.4 3,667 1.1 2,032 0.8 
Loans delinquent 61-90 days2,343 0.3 2,143 0.6 1,515 0.6 
Loans delinquent 91 days or greater5,091 0.6 4,245 1.2 1,562 0.7 
Total loans in repayment839,385 99.8 100.0 %345,410 100.0 100.0 %244,237 99.9 100.0 %
Total consumer loans and other financing receivables840,739 100.0 %345,560 100.0 %244,552 100.0 %
Accrued interest receivable1,102 1,868 1,115 
Loan discount and deferred lender fees, net of unamortized premiums(16,215)(10,713)(10,789)
Allowance for loan losses(33,147)(38,468)(22,380)
Total consumer loans and other financing receivables and accrued interest receivable, net of allowance for loan losses$792,479 $298,247 $212,498 
Federally insured loans - Nelnet Bank (a):
Loans in-school/grace/deferment$6,705 3.7 %
Loans in forbearance9,263 5.2 
Loans in repayment status:
Loans current146,308 89.8 %
Loans delinquent 30-59 days4,827 3.0 
Loans delinquent 60-89 days2,185 1.3 
Loans delinquent 90-119 days2,684 1.6 
Loans delinquent 120-270 days5,668 3.5 
Loans delinquent 271 days or greater1,308 0.8 
Total loans in repayment162,980 91.1 100.0 %
Total federally insured loans178,948 100.0 %
Accrued interest receivable11,253 
Loan premium945 
Allowance for loan losses(707)
Total federally insured loans and accrued interest receivable, net of allowance for loan losses$190,439 
Private education loans - Nelnet Bank (a):
Loans in-school/grace/deferment$58,753 11.1 %$31,674 6.6 %$29,396 8.3 %
Loans in forbearance1,476 0.3 3,061 0.6 2,364 0.7 
Loans in repayment status:
Loans current460,142 98.1 %439,569 98.2 %318,090 99.2 %
Loans delinquent 30-59 days3,526 0.7 4,327 1.0 1,075 0.3 
Loans delinquent 60-89 days2,403 0.5 1,497 0.3 723 0.2 
Loans delinquent 90 days or greater3,096 0.7 2,317 0.5 1,006 0.3 
Total loans in repayment469,167 88.6 100.0 %447,710 92.8 100.0 %320,894 91.0 100.0 %
Total private education loans529,396 100.0 %482,445 100.0 %352,654 100.0 %
Accrued interest receivable6,400 4,103 3,098 
Loan discount, net of unamortized premiums and deferred origination costs(6,652)(4,581)5,786 
Allowance for loan losses(11,732)(10,086)(3,670)
Total private education loans and accrued interest receivable, net of allowance for loan losses$517,412 $471,881 $357,868 
15


As of September 30, 2025As of December 31, 2024As of September 30, 2024
Consumer and other loans - Nelnet Bank (a):
Loans in deferment$9,954 3.7 %$5,186 3.2 %$3,073 1.5 %
Loans in repayment status:
Loans current254,720 99.2 %155,772 99.2 %198,613 97.3 %
Loans delinquent 30-59 days694 0.3 803 0.5 2,251 1.1 
Loans delinquent 60-89 days719 0.3 243 0.2 1,497 0.7 
Loans delinquent 90 days or greater452 0.2 148 0.1 1,784 0.9 
Total loans in repayment256,585 96.3 100.0 %156,966 96.8 100.0 %204,145 98.5 100.0 %
Total consumer and other loans266,539 100.0 %162,152 100.0 %207,218 100.0 %
Accrued interest receivable1,563 1,021 1,386 
Loan premium, net of unaccreted discount3,822 1,043 47 
Allowance for loan losses(11,308)(6,115)(13,514)
Total consumer and other loans and accrued interest receivable, net of allowance for loan losses$260,616 $158,101 $195,137 
(a) For the periods presented for Nelnet Bank, the delinquency bucket periods conform with the delinquency bucket periods reflected in Nelnet Bank's Call Reports filed with the Federal Deposit Insurance Corporation.

16


FICO Scores
An additional key credit quality indicator for Nelnet Bank private education and consumer loans is FICO scores at the time of origination or purchase. The following tables highlight the gross principal balance of Nelnet Bank's portfolios, by year of origination, stratified by FICO score at the time of origination or purchase:
Nelnet Bank Private Education Loans
Loan balance as of September 30, 2025
Nine months ended September 30, 20252024202320222021Prior yearsTotalPercent of total
FICO at origination or purchase:
Less than 705$4,699 2,948 3,148 4,257 3,685 20,367 39,104 7.4 %
705 - 7347,622 4,871 7,964 17,748 6,828 15,288 60,321 11.4 
735 - 76410,018 5,652 7,482 27,110 11,442 22,907 84,611 16.0 
765 - 79413,521 6,519 5,144 42,073 21,500 27,743 116,500 22.0 
Greater than 79419,279 14,419 12,753 59,625 42,567 73,155 221,798 41.9 
No FICO score available or required (a)— 2,296 4,766 — — — 7,062 1.3 
$55,139 36,705 41,257 150,813 86,022 159,460 529,396 100.0 %
Loan balance as of December 31, 2024
20242023202220212020Prior yearsTotalPercent of total
FICO at origination or purchase:
Less than 705$2,566 3,578 4,759 4,182 331 15,485 30,901 6.4 %
705 - 7343,736 8,874 19,666 7,531 426 12,349 52,582 10.9 
735 - 7644,398 8,629 29,918 12,775 1,286 17,920 74,926 15.5 
765 - 7944,600 6,115 46,340 24,073 1,105 23,867 106,100 22.0 
Greater than 7949,971 15,471 67,454 49,408 4,406 63,258 209,968 43.5 
No FICO score available or required (a)2,476 5,492 — — — — 7,968 1.7 
$27,747 48,159 168,137 97,969 7,554 132,879 482,445 100.0 %
Nelnet Bank Consumer and Other Loans
Loan balance as of September 30, 2025
Nine months ended September 30, 20252024202320222021Prior yearsTotalPercent of total
FICO at origination:
Less than 720$14,112 17,370 1,624 — 287 1,342 34,735 13.0 %
720 - 76925,308 38,313 3,870 16 5,582 7,329 80,418 30.2 
Greater than 76951,911 50,469 6,045 97 5,331 3,339 117,192 44.0 
No FICO score available or required (a)27,655 5,793 432 260 54 — 34,194 12.8 
$118,986 111,945 11,971 373 11,254 12,010 266,539 100.0 %
Loan balance as of December 31, 2024
20242023202220212020Prior yearsTotalPercent of total
FICO at origination:
Less than 720$19,264 1,762 — 376 675 1,170 23,247 14.3 %
720 - 76941,217 4,502 19 6,152 5,448 3,105 60,443 37.3 
Greater than 76957,323 6,577 103 5,834 2,755 1,165 73,757 45.5 
No FICO score available or required (a)3,936 437 277 55 — — 4,705 2.9 
$121,740 13,278 399 12,417 8,878 5,440 162,152 100.0 %
(a)    Loans with no FICO score available or required refers to loans issued to borrowers for which the Company cannot obtain a FICO score or are not required to under a special purpose credit program. Management proactively assesses the risk and size of this loan category and, when necessary, takes actions to mitigate the credit risk.
17


Nonaccrual Status
The Company does not place federally insured loans on nonaccrual status due to the government guaranty. The amortized cost of private education, consumer, and other loans on nonaccrual status, as well as the allowance for loan losses related to such loans, as of September 30, 2025 and December 31, 2024, was not material.
Amortized Cost Basis by Origination Year
The following table presents the amortized cost of the Company's private education, consumer, and other loans by loan status and delinquency amount as of September 30, 2025 based on year of origination. Effective July 1, 2010, no new loan originations can be made under the Federal Family Education Loan Program (the "FFEL Program" or FFELP) and all new federal loan originations must be made under the Federal Direct Loan Program. As such, all of the Company’s federally insured loans were originated prior to July 1, 2010.
Nine months ended September 30, 20252024202320222021Prior yearsTotal
Private education loans - Non-Nelnet Bank:
Loans in-school/grace/deferment$— — — 336 2,066 1,830 4,232 
Loans in forbearance— — — 36 246 2,371 2,653 
Loans in repayment status:
Loans current— — 175 3,676 5,002 128,825 137,678 
Loans delinquent 31-60 days— — — 21 39 1,254 1,314 
Loans delinquent 61-90 days— — — — 21 844 865 
Loans delinquent 91 days or greater— — — — 72 923 995 
Total loans in repayment— — 175 3,697 5,134 131,846 140,852 
Total private education loans$— — 175 4,069 7,446 136,047 147,737 
Accrued interest receivable1,291 
Loan discount, net of unamortized premiums(4,740)
Allowance for loan losses(7,103)
Total private education loans and accrued interest receivable, net of allowance for loan losses$137,185 
Gross charge-offs - nine months ended September 30, 2025$— — — — 52 1,864 1,916 
Consumer loans and other financing receivables - Non-Nelnet Bank:
Loans in deferment$— 452 902 — — — 1,354 
Loans in repayment status:
Loans current766,123 35,952 24,275 1,549 238 271 828,408 
Loans delinquent 31-60 days1,449 1,374 550 170 — — 3,543 
Loans delinquent 61-90 days589 1,015 697 42 — — 2,343 
Loans delinquent 91 days or greater371 3,379 680 588 73 — 5,091 
Total loans in repayment768,532 41,720 26,202 2,349 311 271 839,385 
Total consumer loans and other financing receivables$768,532 42,172 27,104 2,349 311 271 840,739 
Accrued interest receivable1,102 
Loan discount and deferred lender fees, net of unamortized premiums(16,215)
Allowance for loan losses(33,147)
Total consumer loans and other financing receivables and accrued interest receivable, net of allowance for loan losses$792,479 
Gross charge-offs - nine months ended September 30, 2025$5,565 8,322 6,134 280 9 9 20,319 
18


Nine months ended September 30, 20252024202320222021Prior yearsTotal
Private education loans - Nelnet Bank (a):
Loans in-school/grace/deferment$21,876 20,602 9,206 5,577 285 1,207 58,753 
Loans in forbearance— — 146 483 152 695 1,476 
Loans in repayment status:
Loans current33,129 15,707 30,680 143,901 84,322 152,403 460,142 
Loans delinquent 30-59 days98 67 299 460 501 2,101 3,526 
Loans delinquent 60-89 days3 196 300 201 617 1,086 2,403 
Loans delinquent 90 days or greater33 133 626 191 145 1,968 3,096 
Total loans in repayment33,263 16,103 31,905 144,753 85,585 157,558 469,167 
Total private education loans$55,139 36,705 41,257 150,813 86,022 159,460 529,396 
Accrued interest receivable6,400 
Loan discount, net of unamortized premiums and deferred origination costs(6,652)
Allowance for loan losses(11,732)
Total private education loans and accrued interest receivable, net of allowance for loan losses$517,412 
Gross charge-offs - nine months ended September 30, 2025$— 376 782 628 372 3,145 5,303 
Consumer and other loans - Nelnet Bank (a):
Loans in deferment$7,936 2,018 — — — — 9,954 
Loans in repayment status:
Loans current111,040 108,582 11,778 373 11,085 11,862 254,720 
Loans delinquent 30-59 days10 499 114 — 61 10 694 
Loans delinquent 60-89 days— 472 79 — 108 60 719 
Loans delinquent 90 days or greater— 374 — — — 78 452 
Total loans in repayment111,050 109,927 11,971 373 11,254 12,010 256,585 
Total consumer and other loans$118,986 111,945 11,971 373 11,254 12,010 266,539 
Accrued interest receivable1,563 
Loan premium, net of unaccreted discount3,822 
Allowance for loan losses(11,308)
Total consumer and other loans and accrued interest receivable, net of allowance for loan losses$260,616 
Gross charge-offs - nine months ended September 30, 2025$61 1,205 283 — 306 174 2,029 
(a) For the periods presented for Nelnet Bank, the delinquency bucket periods conform with the delinquency bucket periods reflected in Nelnet Bank's Call Reports filed with the Federal Deposit Insurance Corporation.
19


4.  Bonds and Notes Payable
The following tables summarize the Company’s outstanding debt obligations by type of instrument:
 As of September 30, 2025
Carrying
amount
Interest rate
range
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:   
Bonds and notes based on indices$6,258,938 
4.68% - 6.27%
8/26/30 - 9/25/69
Bonds and notes based on auction60,585 
0.01% - 5.50%
3/22/32 - 3/1/42
Total FFELP variable-rate bonds and notes6,319,523 
Fixed-rate bonds and notes issued in FFELP loan asset-backed
      securitizations		312,850 
1.42% - 3.45%
10/25/67 - 8/27/68
FFELP loan warehouse facilities535,389 
5.02% - 5.19%
1/29/27 / 5/1/27
Consumer loan warehouse and other facilities625,570 
5.43% - 6.12%
11/13/27 - 2/29/28
Variable-rate bonds and notes issued in private education loan asset-backed securitizations39,924 
5.65% / 6.61%
6/25/49 / 11/25/53
Fixed-rate bonds and notes issued in private education loan asset-backed securitizations30,952 
7.15%
11/25/53
Unsecured line of credit— —9/22/26
Participation agreements1,648 
5.05% - 5.82%
5/4/26 / 7/28/32
7,865,856   
Discount on bonds and notes payable and debt issuance costs(43,325)
Total$7,822,531 
 As of December 31, 2024
Carrying
amount
Interest rate
range
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:   
Bonds and notes based on indices$6,923,824 
4.89% - 6.45%
8/26/30 - 9/25/69
Bonds and notes based on auction36,395 
5.71% - 5.72%
3/22/32 - 8/25/37
Total FFELP variable-rate bonds and notes6,960,219 
Fixed-rate bonds and notes issued in FFELP loan asset-backed
      securitizations
346,359 
1.42% - 3.45%
10/25/67 - 8/27/68
FFELP loan warehouse facilities853,165 
4.41% - 4.69%
1/31/26 / 4/1/26
Consumer loan warehouse facilities90,000 
4.46% / 4.57%
8/1/26 / 11/13/27
Variable-rate bonds and notes issued in private education loan asset-backed securitizations54,973 
5.90% / 6.82%
6/25/49 / 11/25/53
Fixed-rate bonds and notes issued in private education loan asset-backed securitizations50,415 
5.35% / 7.15%
12/28/43 / 11/25/53
Unsecured line of credit— —9/22/26
Participation agreements3,320 
5.27% - 5.82%
5/4/25 / 1/30/33
8,358,451   
Discount on bonds and notes payable and debt issuance costs(48,654)
Total$8,309,797 
20


Warehouse and Other Facilities
The Company funds a portion of its loan acquisitions through the use of warehouse and other secured facilities. Loan warehousing allows the Company to buy and manage loans prior to transferring them into more permanent financing arrangements. The following table summarizes the Company's warehouse and other facilities as of September 30, 2025:
Type of loansMaximum financing amountAmount outstandingAmount availableExpiration of liquidity provisionsFinal maturity dateAdvance rateAdvanced as equity support
FFELP (a)$800,000 393,141 406,859 1/30/20261/29/2027note (b)$29,556 
FFELP (c)375,000 142,248 232,752 5/1/20265/1/202792 %12,197 
$1,175,000 535,389 639,611 $41,753 
Consumer loans and other financing receivables$925,000 625,570 299,430 
11/13/2026 - 7/31/2027
11/13/2027 - 2/29/2028
50% - 90%
$120,711 
(a)    On January 31, 2025, the Company extended the liquidity provisions and final maturity date on this facility to July 31, 2025 and July 31, 2026, respectively. On July 17, 2025, the Company increased the maximum financing amount from $600 million to $800 million and extended the liquidity provisions and final maturity date to January 30, 2026 and January 29, 2027, respectively.
(b)    This facility has a static advance rate until the expiration date of the liquidity provisions. The maximum advance rates for this facility are 90% to 96%, and the minimum advance rates are 84% to 90%. In the event the liquidity provisions are not extended, the valuation agent has the right to perform a one-time mark to market on the underlying loans funded in this facility, subject to a floor. The loans would then be funded at this new advance rate until the final maturity date of the facility.
(c)    On March 31, 2025, the Company extended the liquidity provisions and final maturity date on this facility to May 1, 2025 and May 1, 2026, respectively, and on April 10, 2025, extended the liquidity provisions and final maturity to May 1, 2026 and May 1, 2027, respectively.
Unsecured Line of Credit
The Company has a $495.0 million unsecured line of credit that has a maturity date of September 22, 2026. As of September 30, 2025, no amount was outstanding on the line of credit and $495.0 million was available for future use.
Debt Repurchases
The following table summarizes the Company's repurchases of its own debt. Gains/losses recorded by the Company from the repurchase of debt are included in "other, net" in "other income (expense)" on the Company's consolidated statements of income.
Three months ended September 30,Nine months ended September 30,
2025202420252024
Purchase price$(385,853)(357)(528,723)(4,556)
Par value377,571 365 520,891 4,555 
Remaining unamortized cost of issuance(22)(1)(33)(1)
(Loss) gain, net$(8,304)7 (7,865)(2)
The Company has repurchased certain of its own asset-backed securities (bonds and notes payable) in the secondary market. For accounting purposes, these notes are eliminated in consolidation and are not included in the Company's consolidated financial statements. However, these securities remain legally outstanding at the trust level and the Company could sell these notes to third parties or redeem the notes at par as cash is generated by the trust estate. Upon a sale of these notes to third parties, the Company would obtain cash proceeds equal to the market value of the notes on the date of such sale. As of September 30, 2025, the Company holds $499.5 million (par value) of its own FFELP asset-backed securities.
21


5.  Derivative Financial Instruments
Non-Nelnet Bank Derivatives
The Company uses settled-to-market derivative financial instruments to manage interest rate risk. Derivative instruments used as part of the Company's interest rate risk management strategy are further described in note 5 of the notes to consolidated financial statements included in the 2024 Annual Report.
Basis Swaps
The following table summarizes the Company’s outstanding basis swaps as of September 30, 2025 and December 31, 2024 used to hedge its basis risk and repricing risk on a portion of its FFELP student loan assets. For these derivative instruments, the Company receives payments indexed to three-month SOFR and makes payments based on the one-month SOFR index (plus or minus a spread) as defined in the agreements (the "Basis Swaps").
MaturityNotional amount
2026$1,150,000 
2027250,000 
$1,400,000 
Interest Rate Swaps – Floor Income Hedges
The following table summarizes the outstanding derivative instruments used by the Company as of September 30, 2025 and December 31, 2024 to economically hedge loans earning fixed-rate floor income. For these derivative instruments, the Company receives payments based on SOFR, the majority of which reset quarterly.
MaturityNotional amountWeighted average fixed rate paid by the Company
2026$200,000 3.92 %
202850,000 3.56 
2029 (a)50,000 3.17 
2030 (b)100,000 3.63 
 $400,000 3.71 %
(a)    This $50 million notional amount derivative has a forward effective start date in January 2026.
(b)    A $50 million notional amount derivative has a forward effective start date in November 2025.

22


Nelnet Bank Derivatives
Nelnet Bank uses non-centrally cleared derivative instruments to hedge exposure to variability in cash flows from variable-rate intercompany and third-party deposits to minimize volatility from future changes in interest rates. Nelnet Bank has designated all of its derivative instruments as cash flow hedges; however, the derivatives that hedge intercompany deposits are not eligible for hedge accounting in the consolidated financial statements.
Interest Rate Swaps - Intercompany Deposits
The following table summarizes the outstanding derivative instruments used by Nelnet Bank to hedge intercompany deposits. For these derivative instruments, the Company receives monthly or quarterly payments based on SOFR that reset daily.
As of September 30, 2025As of December 31, 2024
MaturityNotional amountWeighted average fixed rate paid by the CompanyNotional amountWeighted average fixed rate paid by the Company
2028$40,000 3.33 %$40,000 3.33 %
202925,000 3.37 25,000 3.37 
2030 (a)50,000 3.06 50,000 3.06 
2032 (b)25,000 4.03 25,000 4.03 
2033 (c)25,000 3.90 25,000 3.90 
2035 (d)30,000 3.79 — — 
 $195,000 3.50 %$165,000 3.44 %
(a)    These $25 million notional amount derivatives have forward effective start dates in April 2026 and May 2026, respectively.
(b)    This $25 million notional amount derivative has a forward effective start date in February 2027.
(c)    This $25 million notional amount derivative has a forward effective start date in November 2025.
(d)    This $30 million notional amount derivative has a forward effective start date in May 2028.
Interest Rate Swaps - Third-Party Deposits
The following table summarizes the outstanding derivative instruments used by Nelnet Bank to hedge third-party deposits. For these derivative instruments, the Company receives monthly payments based on SOFR that reset monthly.
As of September 30, 2025
MaturityNotional amountWeighted average fixed rate paid by the Company
2030$25,000 3.57 %
203525,000 3.87 
 $50,000 3.72 %
Nelnet Bank's derivatives used to hedge third-party deposits qualify for hedge accounting. As such, the changes in the fair value of these derivatives are recognized in other comprehensive income, net of tax, in the consolidated financial statements. Derivative settlements for cash flow hedges are included in "interest expense" on the consolidated statements of income, which were not material for the three and nine months ended September 30, 2025.

23


Consolidated Financial Statement Impact Related to Derivatives
Balance Sheets
Unlike the Company's Non-Nelnet Bank derivatives, Nelnet Bank's derivatives are not cleared post-execution at a regulated clearinghouse. As such, the Company records these derivative instruments in the consolidated balance sheets on a gross basis as either an asset (included in "other assets") or liability (included in "other liabilities") measured at fair value. The following table summarizes the fair value of the Company's Nelnet Bank derivatives as reflected in the consolidated balance sheets:
Fair value of asset derivativesFair value of liability derivatives
As of September 30, 2025As of December 31, 2024As of September 30, 2025As of December 31, 2024
Interest rate swaps - intercompany deposits$359 3,232 1,736 53 
Interest rate swaps - third-party deposits (cash flow hedges)— — 755 — 
$359 3,232 2,491 53 
Statements of Income
The following table summarizes the components of "derivative market value adjustments and derivative settlements, net" included in the consolidated statements of income related to derivative instruments that do not qualify for hedge accounting:
Three months ended September 30,Nine months ended September 30,
 2025202420252024
Settlements:  
Basis swaps$156 159 463 773 
Interest rate swaps - floor income hedges438 1,200 1,293 3,583 
Interest rate swaps - intercompany deposits167 281 494 690 
Total settlements - income761 1,640 2,250 5,046 
Change in fair value:  
Basis swaps(147)(125)(429)(710)
Interest rate swaps - floor income hedges(314)(9,393)(5,993)(2,165)
Interest rate swaps - intercompany deposits(327)(3,647)(4,556)(793)
Total change in fair value - expense(788)(13,165)(10,978)(3,668)
Derivative market value adjustments and derivative settlements, net - (expense) income$(27)(11,525)(8,728)1,378 
24


6.  Investments and Notes Receivable
“Total investments and notes receivable” consisted of the following:
As of September 30, 2025As of December 31, 2024
Amortized costGross unrealized gainsGross unrealized lossesFair valueAmortized costGross unrealized gainsGross unrealized lossesFair value
Investments at fair value:
Available-for-sale asset-backed securities
Non-Nelnet Bank:
FFELP loan$92,175 3,716 (664)95,227 188,386 5,804 (896)193,294 
FFELP loan and other debt securities - restricted (a)122,667 3,518 (200)125,985 98,914 3,151 (78)101,987 
Private education loan (b)206,153 76 (13,591)192,638 237,288 — (18,118)219,170 
Other debt securities77,564 2,387 (8)79,943 32,552 2,500 — 35,052 
Total Non-Nelnet Bank498,559 9,697 (14,463)493,793 557,140 11,455 (19,092)549,503 
Nelnet Bank:
FFELP loan221,313 5,931 (595)226,649 231,543 6,060 (270)237,333 
Private education loan14,293 — (2)14,291 1,596 — — 1,596 
Other debt securities546,020 2,594 (1,280)547,334 296,944 1,775 (1,325)297,394 
Total Nelnet Bank781,626 8,525 (1,877)788,274 530,083 7,835 (1,595)536,323 
Total available-for-sale asset-backed securities$1,280,185 18,222 (16,340)1,282,067 1,087,223 19,290 (20,687)1,085,826 
Equity securities and funds measured at net asset value109,821 74,494 
Total investments at fair value1,391,888 1,160,320 
Other investments and notes receivable (not measured at fair value):
Nelnet Bank: Held-to-maturity asset-backed securities
FFELP loan201,041 203,439 
Private education loan— 7,335 
Total Nelnet Bank held-to-maturity asset-backed securities201,041 210,774 
Venture capital, funds, and other:
Measurement alternative (c)230,319 200,782 
Equity method175,373 170,258 
Total venture capital and funds405,692 371,040 
Real estate equity method201,873 131,745 
Investment in ALLO (d):
Voting interest/equity method— — 
Preferred membership interests and accrued and unpaid preferred return— 225,614 
Total investment in ALLO— 225,614 
Beneficial interest in loan securitizations (e):
Consumer loans, net of allowance for credit losses of $43,153 and $38,590 as of September 30, 2025 and December 31, 2024, respectively
140,742 142,764 
Private education loans, net of allowance for credit losses of $4,970 and $901 as of September 30, 2025 and December 31, 2024, respectively
42,770 52,824 
Federally insured student loans18,288 18,221 
Total beneficial interest in loan securitizations, net of allowance201,800 213,809 
Solar (f)(210,336)(155,048)
Notes receivable33,376 32,258 
Tax liens, affordable housing, and other14,191 10,184 
Total other investments and notes receivable (not measured at fair value)847,637 1,040,376 
Total investments and notes receivable$2,239,525 $2,200,696 
25


(a)    Represent investments held in third-party trusts as collateral for the Company’s reinsurance business.
(b)    As sponsor of certain private education loan securitizations, the Company is required to provide a certain level of risk retention, and has purchased bonds issued in such securitizations to satisfy this requirement. The bonds purchased to satisfy the risk retention requirement are included in the above table. The Company must retain these investment securities until the latest of (i) the date the aggregate outstanding principal balance of the loans in the securitization is 33% or less of the initial loan balance, and (ii) the date the aggregate outstanding principal balance of the bonds is 33% or less of the aggregate initial outstanding principal balance of the bonds, at which time the Company can sell its investment securities (bonds) to a third party.
(c)    The Company has an investment in an unaffiliated third-party technology company (the “Investee”). On August 11, 2025, the Investee completed an additional equity raise and accepted tender offers to redeem existing equity holders with a portion of the proceeds. The Company redeemed a portion of its investment and received cash proceeds of $10.1 million and recognized a gain of $7.8 million. This gain is included in "other, net" in "other income (expense)" on the consolidated statements of income. The Company accounts for its investment in the Investee using the measurement alternative method, which requires it to adjust its carrying value of the investment for changes resulting from observable market transactions. As a result of the Investee’s equity raise, the Company recognized a gain of $22.4 million during the third quarter of 2025 to adjust its carrying value of its remaining investment in the Investee to reflect the August 2025 transaction value. This gain is included in "other, net" in "other income (expense)" on the consolidated statements of income. After the completion of this transaction, the Company's carrying amount of its remaining investment in the Investee is $31.7 million.
The Company has an investment in Agile Sports Technologies, Inc. (doing business as “Hudl”). During the first quarter of 2025, the Company acquired additional ownership interests in Hudl for $3.8 million from existing Hudl investors. This transaction was not considered an observable market transaction (not orderly) because it was not subject to customary marketing activities. Accordingly, the Company did not adjust its carrying value of its Hudl investment to the transaction value. As of September 30, 2025, the carrying amount of the Company's investment in Hudl was $172.5 million. David S. Graff, who has served on the Company's Board of Directors since May 2014, is CEO, co-founder, and a director of Hudl.
(d)    On June 4, 2025, the Company redeemed a portion of its voting membership interests in ALLO and all its outstanding preferred membership interests, including the preferred return accrued on such membership interests through June 3, 2025. See note 2 for additional information. The Company's voting membership interest in ALLO is accounted for using the HLBV method of accounting. Using the HLBV method of accounting, the Company recognized $10.7 million of losses during the first quarter of 2024, reducing the carrying value of the voting membership interest investment to $0. Absent additional equity contributions with respect to ALLO's voting membership interest, the Company will not recognize additional losses for its voting membership interest in ALLO. Prior to redeeming all its outstanding preferred membership interests in June 2025, the Company recognized $4.8 million on its ALLO preferred membership interests during the three months ended September 30, 2024 and $14.4 million and $11.4 million during the nine months ended September 30, 2025 and 2024, respectively. The income statement activity from the Company's investment in ALLO is included in "other, net" in "other income (expense)" on the consolidated statements of income.
(e)    The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations, which are accounted for as held-to-maturity beneficial interest investments. As of the latest remittance reports filed by the various trusts prior to or as of September 30, 2025, the Company's ownership correlates to approximately $1.07 billion, $400 million, and $280 million of consumer, private education, and federally insured student loans, respectively, included in these securitizations. The Company has recorded an allowance for credit losses (and related provision expense) on these investments. See note 9 for additional information.
(f)    The Company invests in solar tax equity investments through investment partnerships. Due to the management and control of each of these investment partnerships, such partnerships that invest in tax equity investments are consolidated on the Company’s consolidated financial statements, with the third-party co-investor’s portion being presented as noncontrolling interests. As of September 30, 2025, the Company has invested a total of $306.1 million and its third-party investors have invested $307.5 million in tax equity investments that remain outstanding in renewable energy solar partnerships that support the development and operations of solar projects. The carrying value of the Company’s investment in a solar project is reduced by tax credits earned when the solar project is placed in service. As of September 30, 2025, the Company and its third-party co-investors have earned $337.2 million and $295.7 million, respectively, of tax credits on those projects that remain outstanding. The solar investment negative carrying value on the consolidated balance sheet of $210.3 million as of September 30, 2025 represents the sum of total tax credits earned on solar projects placed in service through September 30, 2025 and the calculated HLBV cumulative net losses being larger than the total investment contributions made by the Company and its syndication partners on such projects. The solar investment negative carrying value as of September 30, 2025, excluding the portion owned by syndication partners that is reflected as "noncontrolling interests" on the consolidated balance sheet, was $109.8 million.
The Company accounts for its solar investments using the HLBV method of accounting. For the majority of the Company’s solar investments, the HLBV method of accounting results in accelerated losses in the initial years of investment and gains recognized at the end of the contractual agreement (typically five years). The following table presents (i) the Company's recognized HLBV losses and gains recognized from sales of certain investments, which include losses and gains attributable to third-party noncontrolling interest investors (syndication partners), included in “other, net” in "other income (expense)" on the consolidated statements of income, (ii) solar net losses and gains attributed to noncontrolling interest investors included in “net loss attributable to noncontrolling interests” on the consolidated statements of income, and (iii) the recognized pre-tax net loss attributable to the Company:
26


Three months ended September 30,Nine months ended September 30,
2025202420252024
Losses from HLBV accounting (gross)$(10,884)(11,238)(19,963)(15,276)
Gains from sales (gross)— — 8,033 4,208 
Losses from solar investments, net(10,884)(11,238)(11,930)(11,068)
Less: losses attributable to noncontrolling members, net(5,659)(3,936)(9,863)(5,568)
Net loss attributable to the Company$(5,225)(7,302)(2,067)(5,500)
The following table presents, by remaining contractual maturity, the amortized cost and fair value of debt securities as of September 30, 2025:
As of September 30, 2025
1 year or lessAfter 1 year through 5 yearsAfter 5 years through 10 yearsAfter 10 yearsTotal
Available-for-sale asset-backed securities
Non-Nelnet Bank:
FFELP loan$— 205 2,525 89,445 92,175 
FFELP loan and other debt securities - restricted— 5,500 17,599 99,568 122,667 
Private education loan— — — 206,153 206,153 
Other debt securities— 7,790 34,128 35,646 77,564 
Total Non-Nelnet Bank— 13,495 54,252 430,812 498,559 
Fair value— 13,609 54,416 425,768 493,793 
Nelnet Bank:
FFELP loan49,259 13,009 21,618 137,427 221,313 
Private education loan— — 13,562 731 14,293 
Other debt securities— 33,243 73,023 439,754 546,020 
Total Nelnet Bank49,259 46,252 108,203 577,912 781,626 
Fair value49,005 46,359 108,682 584,228 788,274 
Total available-for-sale asset-backed securities at amortized cost$49,259 59,747 162,455 1,008,724 1,280,185 
Total available-for-sale asset-backed securities at fair value$49,005 59,968 163,098 1,009,996 1,282,067 
Held-to-maturity asset-backed securities
Nelnet Bank:
FFELP loan - amortized cost$— 2,546 13,132 185,363 201,041 
FFELP loan - fair value$— 2,582 13,024 190,386 205,992 
Beneficial interest in loan securitizations (a):
Amortized cost$— — — — 201,800 
Fair value$— — — — 213,278 
(a) The Company's beneficial interest in loan securitizations is not due at a single maturity date.
The following table summarizes the unrealized positions for held-to-maturity asset-backed securities investments and the beneficial interest in loan securitizations as of September 30, 2025:
Carrying valueGross unrealized gainsGross unrealized lossesFair value
Asset-backed securities$201,041 5,527 (576)205,992 
Beneficial interest in loan securitizations201,800 13,170 (1,692)213,278 
27


The following table presents securities classified as available-for-sale that have gross unrealized losses as of September 30, 2025 and the fair value of such securities as of September 30, 2025. These securities are segregated between investments that had been in a continuous unrealized loss position for less than twelve months and twelve months or more, based on the point in time that the fair value declined below the amortized cost basis. All securities in the table below have been evaluated to determine if a credit loss exists. As part of that assessment, the Company concluded it currently has the intent and ability to retain these investments, and none of the unrealized losses were due to credit losses.
As of September 30, 2025
Unrealized loss position less than 12 monthsUnrealized loss position 12 months or moreTotal
Unrealized lossFair valueUnrealized lossFair valueUnrealized lossFair value
Available-for-sale asset-backed securities
Non-Nelnet Bank:
FFELP loan$(179)8,352 (485)22,383 (664)30,735 
FFELP loan and other debt securities - restricted(110)13,072 (90)4,991 (200)18,063 
Private education loan— — (13,591)152,779 (13,591)152,779 
Other debt securities(8)8,038 — — (8)8,038 
Total Non-Nelnet Bank(297)29,462 (14,166)180,153 (14,463)209,615 
Nelnet Bank:
FFELP loan(442)60,836 (153)11,698 (595)72,534 
Private education loan(2)13,560 — — (2)13,560 
Other debt securities(412)41,640 (868)6,320 (1,280)47,960 
Total Nelnet Bank(856)116,036 (1,021)18,018 (1,877)134,054 
Total available-for-sale asset-backed securities$(1,153)145,498 (15,187)198,171 (16,340)343,669 
The following table summarizes the gross proceeds received and gross realized gains and losses related to sales of available-for-sale asset-backed securities:
Three months endedNine months ended
September 30,September 30,
2025202420252024
Gross proceeds from sales$96,345 105,628 205,954 372,176 
Gross realized gains$1,145 1,791 2,701 4,362 
Gross realized losses(291)(70)(770)(1,036)
Net gains$854 1,721 1,931 3,326 
28


7. Intangible Assets
Intangible assets consisted of the following:
Weighted average remaining useful life as of
September 30, 2025 (months)
As ofAs of
September 30, 2025December 31, 2024
Amortizable intangible assets, net:  
Customer relationships (net of accumulated amortization of $57,142 and $54,644, respectively)
89$30,702 34,960 
Trade name (net of accumulated amortization of $263 and $205, respectively)
79507 565 
Computer software (net of accumulated amortization of $1,175 and $917, respectively)
19545 803 
Total amortizable intangible assets, net88$31,754 36,328 
The Company recorded amortization expense on its intangible assets of $1.5 million and $2.1 million for the three months ended September 30, 2025 and 2024, respectively, and $4.6 million and $6.4 million during the nine months ended September 30, 2025 and 2024, respectively. The Company will continue to amortize intangible assets over their remaining useful lives. As of September 30, 2025, the Company estimates it will record amortization expense as follows:
2025 (October 1 - December 31)$1,525 
20266,012 
20275,714 
20285,354 
20294,008 
2030 and thereafter9,141 
 $31,754 
8. Goodwill
The following table presents the carrying amount of goodwill as of September 30, 2025 and December 31, 2024 by reportable operating segment:
Nelnet Financial Services
Loan Servicing and SystemsEducation Technology Services and PaymentsAsset
Generation and
Management		Nelnet BankNFS Other Operating SegmentsCorporate and Other ActivitiesTotal
Total goodwill$23,639 92,507 41,883 — — — 158,029 
29


9.  Impairment Expense and Provision for Beneficial Interests
The following table presents the impairment charges and provision for beneficial interests, by asset and reportable operating segment, recognized by the Company. These expense items are included in “impairment expense and provision for beneficial interests” in the consolidated statements of income.
Nelnet Financial Services
Loan Servicing and SystemsEducation Technology Services and PaymentsAsset
Generation and
Management		Nelnet BankNFS Other Operating SegmentsCorporate and Other ActivitiesTotal
Three months ended September 30, 2025
Investments - solar tax equity (a)$— — — — — 5,761 5,761 
Investments - beneficial interest in loan securitizations (b)— — 2,145 — — — 2,145 
Property and equipment - internally developed software— 1,145 — — — — 1,145 
Leases, buildings, and associated improvements (c)— — — — — 94 94 
$— 1,145 2,145 — — 5,855 9,145 
Three months ended September 30, 2024
Investments - beneficial interest in loan securitizations (b)$— — 28,952 — — — 28,952 
Investments - venture capital— — — — — 100 100 
$— — 28,952 — — 100 29,052 
Nine months ended September 30, 2025
Investments - solar tax equity (a)$— — — — — 5,761 5,761 
Investments - beneficial interest in loan securitizations (b)— — 8,632 — — — 8,632 
Property and equipment - internally developed software— 1,145 — — — — 1,145 
Leases, buildings, and associated improvements (c)— — — — 81 3,363 3,444 
Property and equipment - solar facilities (d)— — — — — 1,902 1,902 
Investments - venture capital— — — — — 140 140 
$— 1,145 8,632 — 81 11,166 21,024 
Nine months ended September 30, 2024
Investments - beneficial interest in loan securitizations (b)— — 34,863 — — — 34,863 
Property and equipment / other assets - solar facilities and inventory (e)— — — — — 1,865 1,865 
Investments - venture capital— — — — — 137 137 
$— — 34,863 — — 2,002 36,865 
(a)     The Company recorded a non-cash impairment related to its ownership in a solar development project.
(b)    The Company recorded a non-cash allowance for credit losses (and related provision expense) related to the Company's beneficial interest in certain loan securitizations due primarily to an increase in cumulative loss expectations.
(c)    The Company recorded non-cash impairment charges related to operating lease assets and associated leasehold improvements as a result of the Company consolidating office space.
(d)    In the second quarter of 2025, the Company received notification of a customer contract cancellation. As a result, the Company recorded an impairment charge related to construction in progress for a solar facility.
(e)    In April 2024, the Company announced a change in its solar engineering, procurement, and construction (EPC) operations to focus exclusively on the commercial solar market and discontinued its residential solar operations. As a result, the Company recognized non-cash impairment charges on certain solar facilities and inventory related to the residential solar operations.
30


10.  Bank Deposits
The following table summarizes Nelnet Bank’s interest-bearing deposits, excluding intercompany deposits:
As ofAs of
September 30, 2025December 31, 2024
Retail and other savings$1,180,088 916,475 
Brokered CDs, net of brokered deposit fees275,844 247,872 
Retail and other CDs, net of issuance fees20,833 21,784 
Total interest-bearing deposits$1,476,765 1,186,131 
As of September 30, 2025 and December 31, 2024, Nelnet Bank had intercompany deposits from Nelnet, Inc. and its subsidiaries totaling $256.3 million and $68.5 million, respectively, including a $40.0 million pledged deposit from Nelnet, Inc. as required under a Capital and Liquidity Maintenance Agreement with the FDIC. All intercompany deposits held at Nelnet Bank are eliminated for consolidated financial reporting purposes.
The following table presents the remaining maturities of certificates of deposit as of September 30, 2025:
One year or less$149,058 
After one year to two years74,996 
After two years to three years349 
After three years to four years51,215 
After four years to five years— 
After five years21,059 
Total$296,677 
Retail and other savings deposits included deposits from Educational 529 College Savings and Health Savings plans, retirement savings plans, Short Term Federal Investment Trust (STFIT), and FDIC sweep deposits. These deposits are large interest-bearing omnibus accounts structured to allow FDIC insurance to flow through to underlying individual depositors. Deposits that exceeded the FDIC insurance limits as of September 30, 2025 were $44.0 million, the majority of which were intercompany deposits from Nelnet, Inc. and its subsidiaries. Union Bank, a related party, is the program manager for certain of the Educational 529 College Savings plans and trustee for the STFIT.
31


11.  Earnings per Common Share
The following table presents the components used to calculate basic and diluted earnings per share. The Company applies the two-class method in computing both basic and diluted earnings per share, which requires the calculation of separate earnings per share amounts for common stock and unvested share-based awards. Unvested share-based awards that contain nonforfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock.
Common shareholdersUnvested restricted stock shareholdersTotalCommon shareholdersUnvested restricted stock shareholdersTotal
 Three months ended September 30,
20252024
Numerator:
Net income attributable to Nelnet, Inc.$104,750 1,934 106,684 2,343 45 2,388 
Denominator:
Weighted-average common shares outstanding - basic and diluted35,657,976 658,339 36,316,315 35,743,895 686,590 36,430,485 
Earnings per share - basic and diluted$2.94 2.94 2.94 0.07 0.07 0.07 
Nine months ended September 30,
20252024
Numerator:
Net income attributable to Nelnet, Inc.$363,914 6,789 370,703 118,549 2,337 120,886 
Denominator:
Weighted-average common shares outstanding - basic and diluted35,759,099 667,089 36,426,188 35,993,634 709,680 36,703,314 
Earnings per share - basic and diluted$10.18 10.18 10.18 3.29 3.29 3.29 

32


12.  Segment Reporting
See note 16 of the notes to consolidated financial statements included in the 2024 Annual Report for a description of the Company's operating segments. The following tables present the results of each of the Company's reportable operating segments reconciled to the consolidated financial statements:
Three months ended September 30, 2025
Reportable SegmentsReconciling Items
Loan Servicing and Systems (LSS)Education Technology Services and Payments (ETSP)Asset
Generation and
Management		Nelnet BankTotal Reportable SegmentsNFS Other Operating SegmentsCorporate and Other ActivitiesEliminations/ ReclassificationsTotal
Interest income:
Loan interest$— — 145,984 16,733 162,717 — — — 162,717 
Investment interest531 8,564 12,051 14,849 35,995 14,985 3,134 (10,872)43,241 
Total interest income531 8,564 158,035 31,582 198,712 14,985 3,134 (10,872)205,958 
Interest expense— — 113,350 16,179 129,529 1,359 692 (10,872)120,708 
Net interest income531 8,564 44,685 15,403 69,183 13,626 2,442 — 85,250 
Less (negative provision) provision for loan losses— — (7,374)3,811 (3,563)— — — (3,563)
Net interest income after provision for loan losses531 8,564 52,059 11,592 72,746 13,626 2,442 — 88,813 
Other income (expense):
LSS revenue151,052 — — — 151,052 — — — 151,052 
ETSP revenue— 129,321 — — 129,321 — — — 129,321 
Intersegment revenue5,313 70 — — 5,383 — — (5,383)— 
Reinsurance premiums earned— — — — — 23,165 — — 23,165 
Solar construction revenue— — — — — — 5,738 — 5,738 
Other, net105 — 195 1,308 1,608 5,674 28,336 112 35,730 
Loss on sale of loans, net— — (2,472)— (2,472)— — — (2,472)
Gain on partial redemption of ALLO investment— — — — — — — — — 
Derivative settlements, net— — 594 167 761 — — — 761 
Derivative market value adjustments, net— — (461)(327)(788)— — — (788)
Total other income (expense), net156,470 129,391 (2,144)1,148 284,865 28,839 34,074 (5,271)342,507 
Cost of services and expenses:
Total cost of services2,021 50,363 — — 52,384 — 7,607 — 59,991 
Salaries and benefits70,126 43,029 1,971 2,817 117,943 668 26,193 (26)144,778 
Depreciation and amortization1,725 2,504 — 355 4,584 — 2,743 — 7,327 
Reinsurance losses and underwriting expenses— — — — — 19,962 — — 19,962 
Postage expense8,735 8,735 (8,735)— 
Servicing fees6,687 838 7,525 (7,525)— 
Other expenses (a)10,862 9,537 1,243 1,916 23,558 1,103 17,901 11,107 53,669 
Intersegment expenses, net17,262 6,420 1,248 726 25,656 289 (25,741)(204)— 
Total operating expenses108,710 61,490 11,149 6,652 188,001 22,022 21,096 (5,383)225,736 
Impairment expense and provision for beneficial interests— 1,145 2,145 — 3,290 — 5,855 — 9,145 
Total expenses110,731 112,998 13,294 6,652 243,675 22,022 34,558 (5,383)294,872 
Income (loss) before income taxes46,270 24,957 36,621 6,088 113,936 20,443 1,958 112 136,448 
Income tax (expense) benefit(11,105)(5,990)(8,783)(1,483)(27,361)(4,866)(3,547)— (35,773)
Net income (loss)35,165 18,967 27,838 4,605 86,575 15,577 (1,589)112 100,675 
Net (income) loss attributable to noncontrolling interests— — (27)— (27)(169)6,317 (112)6,009 
Net income (loss) attributable to Nelnet, Inc.$35,165 18,967 27,811 4,605 86,548 15,408 4,728 — 106,684 
Total assets as of September 30, 2025$200,205 525,704 10,042,521 2,003,322 12,771,752 1,330,228 671,263 (896,561)13,876,682 
(a)    Other expenses for each reportable segment includes:
LSS - communications, professional fees, software, and computer services and subscriptions.
ETSP - advertising, professional fees, analysis fees, computer services and subscriptions, and travel.
AGM - trustee fees and professional fees.
Nelnet Bank - marketing, consulting and professional fees, collection costs, software, FDIC insurance, and management fee expense.
33


Three months ended September 30, 2024
Reportable SegmentsReconciling Items
Loan Servicing and Systems (LSS)Education Technology Services and Payments (ETSP)Asset
Generation and
Management		Nelnet BankTotal Reportable SegmentsNFS Other Operating SegmentsCorporate and Other ActivitiesEliminations/ ReclassificationsTotal
Interest income:
Loan interest$— — 180,571 9,639 190,210 — — — 190,211 
Investment interest894 9,734 18,970 12,522 42,120 12,415 3,105 (7,368)50,272 
Total interest income894 9,734 199,541 22,161 232,330 12,415 3,105 (7,368)240,483 
Interest expense— — 161,142 11,606 172,748 2,245 704 (7,368)168,328 
Net interest income894 9,734 38,399 10,555 59,582 10,170 2,401 — 72,155 
Less (negative provision) provision for loan losses— — 11,968 6,143 18,111 — — — 18,111 
Net interest income after provision for loan losses894 9,734 26,431 4,412 41,471 10,170 2,401 — 54,044 
Other income (expense):
LSS revenue108,175 — — — 108,175 — — — 108,175 
ETSP revenue— 118,179 — — 118,179 — — — 118,179 
Intersegment revenue5,428 60 — — 5,488 — — (5,488)— 
Reinsurance premiums earned— — — — — 16,619 — — 16,619 
Solar construction revenue— — — — — — 19,321 — 19,321 
Other, net690 — 4,918 841 6,449 5,751 3,506 — 15,706 
Loss on sale of loans, net— — (107)— (107)— — — (107)
Gain on partial redemption of ALLO investment— — — — — — — — — 
Derivative settlements, net— — 1,359 281 1,640 — — — 1,640 
Derivative market value adjustments, net— — (9,518)(3,647)(13,165)— — — (13,165)
Total other income (expense), net114,293 118,239 (3,348)(2,525)226,659 22,370 22,827 (5,488)266,368 
Cost of services and expenses:
Total cost of services196 45,273 — — 45,469 — 26,815 — 72,284 
Salaries and benefits76,820 41,053 1,220 2,973 122,066 398 23,852 (124)146,192 
Depreciation and amortization4,854 2,616 — 343 7,813 — 5,848 — 13,661 
Reinsurance losses and underwriting expenses— — — — — 16,761 — — 16,761 
Postage expense8,467 8,467 (8,467)— 
Servicing fees7,011 285 7,296 (7,296)— 
Other expenses (a)11,000 7,614 970 2,463 22,047 1,143 11,116 10,379 44,685 
Intersegment expenses, net18,399 4,604 1,276 581 24,860 200 (25,080)20 — 
Total operating expenses119,540 55,887 10,477 6,645 192,549 18,502 15,736 (5,488)221,299 
Impairment expense and provision for beneficial interests— — 28,952 — 28,952 — 100 — 29,052 
Total expenses119,736 101,160 39,429 6,645 266,970 18,502 42,651 (5,488)322,635 
Income (loss) before income taxes(4,549)26,813 (16,346)(4,758)1,160 14,038 (17,423)— (2,223)
Income tax (expense) benefit1,092 (6,450)3,923 1,143 (292)(3,341)3,915 — 282 
Net income (loss)(3,457)20,363 (12,423)(3,615)868 10,697 (13,508)— (1,941)
Net (income) loss attributable to noncontrolling interests— 54 — — 54 (117)4,392 — 4,329 
Net income (loss) attributable to Nelnet, Inc.$(3,457)20,417 (12,423)(3,615)922 10,580 (9,116)— 2,388 
Total assets as of September 30, 2024$202,366 556,897 10,707,442 1,328,808 12,795,513 1,020,732 763,310 (495,427)14,084,128 
(a)    Other expenses for each reportable segment includes:
LSS - communications, professional fees, software, and computer services and subscriptions.
ETSP - advertising, professional fees, analysis fees, computer services and subscriptions, and travel.
AGM - trustee fees and professional fees.
Nelnet Bank - marketing, consulting and professional fees, software, FDIC insurance, and management fee expense.


34


Nine months ended September 30, 2025
Reportable SegmentsReconciling Items
Loan Servicing and Systems (LSS)Education Technology Services and Payments (ETSP)Asset
Generation and
Management		Nelnet BankTotal Reportable SegmentsNFS Other Operating SegmentsCorporate and Other ActivitiesEliminations/ ReclassificationsTotal
Interest income:
Loan interest$— — 457,752 43,508 501,260 — — — 501,260 
Investment interest1,875 20,921 37,462 41,278 101,536 32,676 8,107 (17,504)124,815 
Total interest income1,875 20,921 495,214 84,786 602,796 32,676 8,107 (17,504)626,075 
Interest expense— — 347,719 42,928 390,647 3,558 1,976 (17,504)378,677 
Net interest income1,875 20,921 147,495 41,858 212,149 29,118 6,131 — 247,398 
Less (negative provision) provision for loan losses— — 16,770 12,934 29,704 — — — 29,704 
Net interest income after provision for loan losses1,875 20,921 130,725 28,924 182,445 29,118 6,131 — 217,694 
Other income (expense):
LSS revenue392,517 — — — 392,517 — — — 392,517 
ETSP revenue— 394,836 — — 394,836 — — — 394,836 
Intersegment revenue16,600 198 — — 16,798 — — (16,798)— 
Reinsurance premiums earned— — — — — 73,964 — — 73,964 
Solar construction revenue— — — — — — 10,992 — 10,992 
Other, net331 — 11,697 1,842 13,870 12,050 56,176 304 82,401 
Loss on sale of loans, net— — (1,562)— (1,562)— — — (1,562)
Gain on partial redemption of ALLO investment— — — — — — 175,044 — 175,044 
Derivative settlements, net— — 1,756 494 2,250 — — — 2,250 
Derivative market value adjustments, net— — (6,422)(4,556)(10,978)— — — (10,978)
Total other income (expense), net409,448 395,034 5,469 (2,220)807,731 86,014 242,212 (16,494)1,119,464 
Cost of services and expenses:
Total cost of services5,500 138,254 — — 143,754 — 29,485 — 173,239 
Salaries and benefits205,249 126,368 4,661 8,424 344,702 1,685 71,472 (160)417,700 
Depreciation and amortization6,199 7,439 — 1,046 14,684 — 9,522 — 24,206 
Reinsurance losses and underwriting expenses— — — — — 67,836 — — 67,836 
Postage expense25,861 25,861 (25,861)— 
Servicing fees20,700 2,329 23,029 (23,029)— 
Other expenses (a)32,793 28,489 4,595 5,243 71,120 4,080 45,183 32,817 153,200 
Intersegment expenses, net50,980 18,297 3,758 2,089 75,124 854 (75,413)(565)— 
Total operating expenses321,082 180,593 33,714 19,131 554,520 74,455 50,764 (16,798)662,942 
Impairment expense and provision for beneficial interests— 1,145 8,632 — 9,777 81 11,166 — 21,024 
Total expenses326,582 319,992 42,346 19,131 708,051 74,536 91,415 (16,798)857,205 
Income (loss) before income taxes84,741 95,963 93,848 7,573 282,125 40,596 156,928 304 479,953 
Income tax (expense) benefit(20,338)(23,042)(22,508)(1,816)(67,704)(9,645)(42,945)— (120,294)
Net income (loss)64,403 72,921 71,340 5,757 214,421 30,951 113,983 304 359,659 
Net (income) loss attributable to noncontrolling interests— 45 (67)— (22)(407)11,777 (304)11,044 
Net income (loss) attributable to Nelnet, Inc.$64,403 72,966 71,273 5,757 214,399 30,544 125,760 — 370,703 
Total assets as of September 30, 2025$200,205 525,704 10,042,521 2,003,322 12,771,752 1,330,228 671,263 (896,561)13,876,682 
(a)    Other expenses for each reportable segment includes:
LSS - communications, professional fees, collection costs, software, and computer services and subscriptions.
ETSP - advertising, professional fees, analysis fees, computer services and subscriptions, and travel.
AGM - trustee fees and professional fees.
Nelnet Bank - marketing, consulting and professional fees, collection costs, software, FDIC insurance, and management fee expense.

35


Nine months ended September 30, 2024
Reportable SegmentsReconciling Items
Loan Servicing and Systems (LSS)Education Technology Services and Payments (ETSP)Asset
Generation and
Management		Nelnet BankTotal Reportable SegmentsNFS Other Operating SegmentsCorporate and Other ActivitiesEliminations/ ReclassificationsTotal
Interest income:
Loan interest$— — 583,907 25,157 609,064 — — — 609,064 
Investment interest4,046 23,315 54,513 33,301 115,175 43,910 9,566 (25,565)143,086 
Total interest income4,046 23,315 638,420 58,458 724,239 43,910 9,566 (25,565)752,150 
Interest expense— — 523,678 31,872 555,550 7,268 2,114 (25,565)539,367 
Net interest income4,046 23,315 114,742 26,586 168,689 36,642 7,452 — 212,783 
Less (negative provision) provision for loan losses— — 14,199 18,352 32,551 — — — 32,551 
Net interest income after provision for loan losses4,046 23,315 100,543 8,234 136,138 36,642 7,452 — 180,232 
Other income (expense):
LSS revenue344,428 — — — 344,428 — — — 344,428 
ETSP revenue— 378,627 — — 378,627 — — — 378,627 
Intersegment revenue18,419 166 — — 18,585 — — (18,585)— 
Reinsurance premiums earned— — — — — 44,250 — — 44,250 
Solar construction revenue— — — — — — 42,741 — 42,741 
Other, net2,085 — 11,239 1,991 15,315 6,763 11,730 — 33,807 
Loss on sale of loans, net— — (1,685)— (1,685)— — — (1,685)
Gain on partial redemption of ALLO investment— — — — — — — — — 
Derivative settlements, net— — 4,356 690 5,046 — — — 5,046 
Derivative market value adjustments, net— — (2,875)(793)(3,668)— — — (3,668)
Total other income (expense), net364,932 378,793 11,035 1,888 756,648 51,013 54,471 (18,585)843,546 
Cost of services and expenses:
Total cost of services392 134,106 — — 134,498 — 49,115 — 183,613 
Salaries and benefits224,172 121,956 3,529 8,491 358,148 1,129 72,159 (1,735)429,701 
Depreciation and amortization15,304 8,012 — 944 24,260 — 21,312 — 45,572 
Reinsurance losses and underwriting expenses— — — — — 39,066 — — 39,066 
Postage expense28,350 28,350 (28,350)— 
Servicing fees24,503 711 25,214 (25,214)— 
Other expenses (a)31,119 23,772 3,217 5,577 63,685 2,470 37,359 35,306 138,820 
Intersegment expenses, net55,955 14,216 3,756 1,729 75,656 665 (77,729)1,408 — 
Total operating expenses354,900 167,956 35,005 17,452 575,313 43,330 53,101 (18,585)653,159 
Impairment expense and provision for beneficial interests— — 34,863 — 34,863 — 2,002 — 36,865 
Total expenses355,292 302,062 69,868 17,452 744,674 43,330 104,218 (18,585)873,637 
Income (loss) before income taxes13,686 100,046 41,710 (7,330)148,112 44,325 (42,295)— 150,141 
Income tax (expense) benefit(3,284)(24,035)(10,010)1,800 (35,529)(10,550)8,426 — (37,653)
Net income (loss)10,402 76,011 31,700 (5,530)112,583 33,775 (33,869)— 112,488 
Net (income) loss attributable to noncontrolling interests— 101 — — 101 (366)8,663 — 8,398 
Net income (loss) attributable to Nelnet, Inc.$10,402 76,112 31,700 (5,530)112,684 33,409 (25,206)— 120,886 
Total assets as of September 30, 2024$202,366 556,897 10,707,442 1,328,808 12,795,513 1,020,732 763,310 (495,427)14,084,128 
(a)    Other expenses for each reportable segment includes:
LSS - communications, professional fees, software, and computer services and subscriptions.
ETSP - advertising, professional fees, analysis fees, computer services and subscriptions, travel, and provision for losses.
AGM - trustee fees and professional fees.
Nelnet Bank - marketing, consulting and professional fees, software, FDIC insurance, and management fee expense.
36


13. Disaggregated Revenue
The following tables present disaggregated revenue for the Company's fee-based operating segments:
Loan Servicing and Systems
 Three months ended September 30,Nine months ended September 30,
 2025202420252024
Government loan servicing (a)$112,798 85,215 285,896 277,705 
Private education and consumer loan servicing24,293 13,057 69,721 38,634 
FFELP loan servicing2,035 2,945 6,909 9,570 
Software services10,584 5,197 27,027 14,617 
Outsourced services1,342 1,761 2,964 3,902 
Loan servicing and systems revenue$151,052 108,175 392,517 344,428 
(a)    Upon reaching a final agreement with the Department of Education (the "Department"), the Company recognized $32.9 million of non-recurring revenue during the third quarter of 2025 on a contract modification for services previously performed.
Education Technology Services and Payments
 Three months ended September 30,Nine months ended September 30,
 2025202420252024
Tuition payment plan services$32,971 31,659 109,057 104,702 
Payment processing59,484 55,813 148,535 137,926 
Education technology services36,323 30,080 136,499 133,306 
Other543 627 745 2,693 
Education technology services and payments revenue$129,321 118,179 394,836 378,627 
Other Income (Expense)
The following table presents the components of "other, net" in "other income (expense)" on the consolidated statements of income:
Three months ended September 30,Nine months ended September 30,
2025202420252024
Investment activity, net$42,317 8,529 56,216 7,447 
Administration/sponsor fee income2,267 1,420 4,978 4,448 
Investment advisory services (WRCM)2,010 1,394 4,987 4,427 
Borrower late fee income1,817 1,741 5,046 7,460 
ALLO preferred return— 4,783 14,400 11,353 
Loss from ALLO voting membership interest investment— — — (10,693)
Loss from solar investments, net(10,884)(11,238)(11,930)(11,068)
(Loss) gain on debt repurchases(8,304)7 (7,865)(2)
Other6,507 9,070 16,569 20,435 
Other, net$35,730 15,706 82,401 33,807 
37


14.  Reinsurance
The following table presents reinsurance premiums written and earned and loss reserves, commissions, and broker fees:
Three months endedNine months ended
September 30,September 30,
2025202420252024
Premiums written:
Assumed$51,244 43,395 147,178 115,546 
Ceded(19,709)(21,558)(53,678)(57,552)
Net premiums written$31,535 21,837 93,500 57,994 
Premiums earned:
Assumed$42,178 33,585 133,981 88,978 
Ceded(19,013)(16,966)(60,017)(44,728)
Net premiums earned$23,165 16,619 73,964 44,250 
Loss reserve, commissions, and broker fees:
Assumed$37,490 33,195 125,231 77,712 
Ceded(17,528)(16,434)(57,395)(38,646)
Reinsurance losses and underwriting expenses$19,962 16,761 67,836 39,066 
The Company’s loss reserve balance, net of amounts ceded to reinsurers, was $63.5 million and $33.1 million as of September 30, 2025 and December 31, 2024, respectively, which is included in "other liabilities" on the consolidated balance sheets.
15.  Major Customer
Government Loan Servicing
The Company earns loan servicing revenue from a servicing contract with the Department. Revenue earned by the Company related to this contract was $112.8 million and $85.2 million for the three months ended September 30, 2025 and 2024, respectively, and $285.9 million and $277.7 million for the nine months ended September 30, 2025 and 2024, respectively.
The Company's legacy student loan servicing contract with the Department was scheduled to expire on December 14, 2023. In April 2023, Nelnet Servicing received a contract award from the Department, pursuant to which it was selected to provide continued servicing capabilities for the Department's student aid recipients under a new Unified Servicing and Data Solution (USDS) contract which replaced the legacy Department student loan servicing contract.
The USDS contract became effective in April 2023 and has a five-year base period, with 2 two-year and 1 one-year possible extensions. The Department's total loan servicing volume of existing borrowers was allocated by the Department to the Company and four other third-party servicers that were awarded a USDS contract. Servicing under the USDS contract went live on April 1, 2024 and the Company recognized revenue in accordance with this new contract beginning in the second quarter of 2024. The Company earned revenue for servicing borrowers under the legacy servicing contract with the Department through March 31, 2024. The Company earns less revenue from the Department on a per-borrower blended basis under the new USDS servicing contract as compared with the legacy servicing contract.
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16.  Fair Value
The following tables present the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:
 As of September 30, 2025As of December 31, 2024
 Level 1Level 2TotalLevel 1Level 2Total
Assets:   
Investments:
Asset-backed debt securities - available-for-sale$100 1,281,967 1,282,067 100 1,085,726 1,085,826 
Equity securities23,731 — 23,731 455 — 455 
Equity securities measured at net asset value (a)86,090 74,039 
Total investments23,831 1,281,967 1,391,888 555 1,085,726 1,160,320 
Derivative instruments— 359 359 — 3,232 3,232 
Total assets$23,831 1,282,326 1,392,247 555 1,088,958 1,163,552 
Liabilities:
Derivative instruments$— 2,491 2,491 — 53 53 
Total liabilities$— 2,491 2,491 — 53 53 
(a)    In accordance with the Fair Value Measurements Topic of the FASB Accounting Standards Codification, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets. The methodologies for estimating the fair value of financial assets and liabilities are described in note 24 of the notes to consolidated financial statements included in the 2024 Annual Report.
 As of September 30, 2025
 Fair valueCarrying valueLevel 1Level 2Level 3
Financial assets:    
Loans receivable$10,120,177 9,668,349 — — 10,120,177 
Accrued loan interest receivable558,912 558,912 — 558,912 — 
Cash and cash equivalents216,425 216,425 216,425 — — 
Investments at fair value1,391,888 1,391,888 23,831 1,281,967 — 
Investments - held-to-maturity asset-backed securities205,992 201,041 — 205,992 — 
Notes receivable33,376 33,376 — 33,376 — 
Beneficial interest in loan securitizations213,278 201,800 — — 213,278 
Restricted cash394,074 394,074 394,074 — — 
Restricted cash – due to customers156,297 156,297 156,297 — — 
Derivative instruments359 359 — 359 — 
Financial liabilities:  
Bonds and notes payable7,846,287 7,822,531 — 7,846,287 — 
Accrued interest payable19,039 19,039 — 19,039 — 
Bank deposits1,469,701 1,476,765 1,007,606 462,095 — 
Due to customers442,735 442,735 442,735 — — 
Derivative instruments2,491 2,491 — 2,491 — 
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 As of December 31, 2024
 Fair valueCarrying valueLevel 1Level 2Level 3
Financial assets:    
Loans receivable$10,008,165 9,443,461 — — 10,008,165 
Accrued loan interest receivable549,283 549,283 — 549,283 — 
Cash and cash equivalents194,518 194,518 194,518 — — 
Investments at fair value1,160,320 1,160,320 555 1,085,726 — 
Investments - held-to-maturity asset-backed securities216,164 210,774 — 216,164 — 
Notes receivable32,258 32,258 — 32,258 — 
Beneficial interest in loan securitizations229,510 213,809 — — 229,510 
Restricted cash332,100 332,100 332,100 — — 
Restricted cash – due to customers404,402 404,402 404,402 — — 
Derivative instruments3,232 3,232 — 3,232 — 
Financial liabilities:  
Bonds and notes payable8,343,565 8,309,797 — 8,343,565 — 
Accrued interest payable21,046 21,046 — 21,046 — 
Bank deposits1,172,707 1,186,131 744,721 427,986 — 
Due to customers478,469 478,469 478,469 — — 
Derivative instruments53 53 — 53 — 
17. Subsequent Event
On October 23, 2025, the Company announced that it entered into a definitive and binding purchase agreement with DH Corporation, a wholly owned subsidiary of Finastra Holdings Limited (“Finastra”), pursuant to which Nelnet Canada, Inc., a wholly owned subsidiary of the Company, will acquire Finastra’s Canadian student loan servicing business for a purchase price of approximately $93 million in cash. The transaction is expected to close in the first calendar quarter of 2026, subject to customary closing conditions.
Finastra’s Canadian student loan servicing business is the leading provider of student loan servicing solutions to governments and financial institutions in Canada providing technology enabled managed services across the loan lifecycle. The business currently services loans for 2.4 million borrowers on proprietary technology platforms. The operating results of this acquisition will be included in the Loan Servicing and Systems reportable operating segment following the closing of the transaction.
ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Management’s Discussion and Analysis of Financial Condition and Results of Operations is for the three and nine months ended September 30, 2025 and 2024. All dollars are in thousands, except per share amounts, unless otherwise noted.)
The following discussion and analysis provides information that the Company’s management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of the Company. The discussion should be read in conjunction with the Company’s consolidated financial statements included in the 2024 Annual Report.
Forward-looking and cautionary statements
This report contains forward-looking statements and information that are based on management's current expectations as of the date of this document. Statements that are not historical facts, including statements about the Company's plans and expectations for future financial condition, results of operations or economic performance, or that address management's plans and objectives for future operations, and statements that assume or are dependent upon future events, are forward-looking statements. The words “anticipate,” “assume,” “believe,” “continue,” “could,” “ensure,” “estimate,” “expect,” “forecast,” “future,” “intend,” “may,” “plan,” “potential,” “predict,” “scheduled,” “should,” “will,” “would,” and similar expressions, as well as statements in future tense, are intended to identify forward-looking statements.
The forward-looking statements are based on assumptions and analyses made by management in light of management's experience and its perception of historical trends, current conditions, expected future developments, and other factors that management believes are appropriate under the circumstances. These statements are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results and performance to be materially different from any future results or performance expressed or implied by such forward-looking statements. These factors include, among
40


others, the risks and uncertainties set forth in the “Risk Factors” sections of the 2024 Annual Report and this report and include such risks and uncertainties as:
•risks related to the ability to successfully maintain and increase allocated volumes of student loans serviced by the Company under existing and future servicing contracts with the Department, risks related to unfavorable contract modifications or interpretations, risks related to consistently meeting service requirements to avoid the assessment of performance penalties, and risks related to the Company's ability to comply with agreements with third-party customers for the servicing of Federal Direct Loan Program, FFEL Program, private education, and consumer loans;
•loan portfolio risks such as credit risk, prepayment risk, interest rate basis and repricing risk, risks related to the use of derivatives to manage exposure to interest rate fluctuations, uncertainties regarding the expected benefits from purchased securitized and unsecuritized FFELP, private education, consumer, and other loans, or investment interests therein, and initiatives to purchase additional FFELP, private education, consumer, and other loans;
•financing and liquidity risks, including risks of changes in the interest rate environment;
•risks from changes in the terms of education loans and in the educational credit and services markets resulting from changes in applicable laws, regulations, and government programs and budgets;
•risks related to a breach of or failure in the Company's operational or information systems or infrastructure, or those of third-party vendors, including disclosure of confidential or personal information and/or damage to reputation resulting from cyber breaches;
•risks related to use of artificial intelligence;
•uncertainties inherent in forecasting future cash flows from student loan assets, including investment interests therein, and related asset-backed securitizations;
•risks related to the ability of Nelnet Bank to achieve its business objectives and effectively deploy loan and deposit strategies and achieve expected market penetration;
•risks related to the Company's solar tax equity investments and solar construction business, including risks of not being able to realize tax credits which remain subject to recapture by taxing authorities and risks from the impact of the enactment of the One Big Beautiful Bill that accelerates the expiration and phase out of solar energy credits;
•risks and uncertainties related to other initiatives to pursue additional strategic investments (and anticipated income therefrom) including venture capital and real estate investments, reinsurance, acquisitions, and other activities (including risks associated with errors that occasionally occur in converting loan servicing portfolios to a new servicing platform), including activities that are intended to diversify the Company both within and outside of its historical core education-related businesses;
•risks and uncertainties associated with climate change; and
•risks and uncertainties associated with litigation matters and maintaining compliance with the extensive regulatory requirements applicable to the Company's businesses, including recent changes to the regulatory environment in the United States, and uncertainties inherent in the estimates and assumptions about future events that management is required to make in the preparation of the Company’s consolidated financial statements.
All forward-looking statements contained in this report are qualified by these cautionary statements and are made only as of the date of this document. Although the Company may from time to time voluntarily update or revise its prior forward-looking statements to reflect actual results or changes in the Company's expectations, the Company disclaims any commitment to do so except as required by law.
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OVERVIEW
The Company is a diversified hybrid holding company with primary businesses being consumer lending, loan servicing, payments, and technology – with many of these businesses serving customers in the education space. The largest operating businesses engage in loan servicing and education technology services and payments. A significant portion of the Company's revenue is net interest income earned on a portfolio of federally insured student loans. The Company also makes and manages investments to further diversify both within and outside of its historical core education-related businesses including, but not limited to, investments in a fiber communications company (ALLO), early-stage and emerging growth companies (venture capital investments), real estate, reinsurance, and renewable energy (solar). In the Nelnet Financial Services division, which includes the Asset Generation and Management and Nelnet Bank reportable operating segments, the Company is also actively expanding its private education, consumer, and other loan portfolios.
GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments
The Company prepares its financial statements and presents its financial results in accordance with GAAP. However, it also provides additional non-GAAP financial information related to specific items management believes to be important in the evaluation of its operating results and performance. A reconciliation of the Company's GAAP net income to Non-GAAP net income excluding derivative market value adjustments, and a discussion of why the Company believes providing this additional information is useful to investors, are provided below.
Three months ended September 30,Nine months ended September 30,
2025202420252024
GAAP net income attributable to Nelnet, Inc.$106,684 2,388 370,703 120,886 
Realized and unrealized derivative market value adjustments (a)788 13,165 10,978 3,668 
Tax effect (b)(189)(3,160)(2,635)(880)
Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments$107,283 12,393 379,046 123,674 
Earnings per share:
GAAP net income attributable to Nelnet, Inc.$2.94 0.07 10.18 3.29 
Realized and unrealized derivative market value adjustments (a)0.02 0.36 0.30 0.10 
Tax effect (b)(0.01)(0.09)(0.07)(0.02)
Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments$2.95 0.34 10.41 3.37 
(a) "Derivative market value adjustments" includes both the realized portion of gains and losses (corresponding to variation margin received or paid on derivative instruments that are settled daily at a central clearinghouse) and the unrealized portion of gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP. "Derivative market value adjustments" does not include "derivative settlements" that represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the Company's derivative instruments based on their contractual terms.
The accounting for derivatives requires that changes in the fair value of derivative instruments be recognized currently in earnings, with no fair value adjustment of the hedged item, unless specific hedge accounting criteria are met. Management has structured all of the Company’s derivative transactions with the intent that each is economically effective; however, the majority of the Company’s derivative instruments do not qualify for hedge accounting in the consolidated financial statements. As a result, the change in fair value for the derivative instruments that do not qualify for hedge accounting is reported in current period earnings with no consideration for the corresponding change in fair value of the hedged item. Under GAAP, the cumulative net realized and unrealized gain or loss caused by changes in fair values of derivatives in which the Company plans to hold to maturity will generally equal zero over the life of the contract. However, the net realized and unrealized gain or loss during any given reporting period fluctuates significantly from period to period.
The Company believes these point-in-time estimates of asset and liability values related to its derivative instruments that are subject to interest rate fluctuations are subject to volatility mostly due to timing and market factors beyond the control of management, and affect the period-to-period comparability of the results of operations. Accordingly, the Company’s management utilizes operating results excluding these items for comparability purposes when making decisions regarding the Company’s performance and in presentations with credit rating agencies, lenders, and investors. Consequently, the Company reports this non-GAAP information because the Company believes that it provides additional information regarding operational and performance indicators that are closely assessed by management and represents what earnings would have been had these derivatives qualified for hedge accounting. There is no comprehensive, authoritative guidance for the presentation of such non-GAAP information, which is only meant to supplement GAAP results by providing additional information that management utilizes to assess performance.
(b)    The tax effects are calculated by multiplying the realized and unrealized derivative market value adjustments by the applicable statutory income tax rate.
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Operating Segments
The Company's reportable operating segments are described in note 1 of the notes to consolidated financial statements included in the 2024 Annual Report. They include:
•Loan Servicing and Systems (LSS) - referred to as Nelnet Diversified Services (NDS)
•Education Technology Services and Payments (ETSP) - referred to as Nelnet Business Services (NBS)
•Asset Generation and Management (AGM), part of the Nelnet Financial Services (NFS) division
•Nelnet Bank, part of the NFS division
The Company earns fee-based revenue through its NDS and NBS reportable operating segments. The Company earns net interest income on its loan portfolio, consisting primarily of FFELP loans, through its AGM reportable operating segment. This segment is expected to generate significant amounts of cash as the FFELP portfolio amortizes. The Company actively works to maximize the amount and timing of cash flows generated from its FFELP portfolio and seeks to acquire additional loan assets to leverage its servicing scale and expertise to generate incremental earnings and cash flow. Nelnet Bank operates as an internet industrial bank franchise focused on the private education and unsecured consumer loan markets, with a home office in Salt Lake City, Utah. Other operating segments included in the NFS division include the Company's U.S. Securities and Exchange Commission (SEC)-registered investment advisor subsidiary (Whitetail Rock Capital Management LLC or "WRCM"), property and casualty reinsurance activities, investment activities in real estate, and investments in investment debt securities (primarily student loan and other asset-backed securities).
Other business activities and operating segments that are not reportable and not part of the NFS division are combined and included in Corporate and Other Activities ("Corporate"). Corporate also includes interest income earned on cash balances held at the corporate level and interest expense incurred on unsecured corporate related debt transactions, certain investment activities including its investment in ALLO, early-stage and emerging growth companies (venture capital investments), solar tax equity investments, the operating results of the Company's solar engineering, procurement, and construction business, and certain shared service activities that are allocated to each operating segment based on estimated use of such activities and services. In addition, Corporate includes corporate costs and overhead functions not allocated to operating segments, including executive management, investments in innovation, and other holding company organizational costs.
The information below presents the operating results (net income (loss) before taxes) for each of the Company's reportable and certain other operating segments reconciled to the consolidated financial statements for the three and nine months ended September 30, 2025 and 2024. See "Results of Operations" for additional detail regarding each reportable operating segment, the NFS operating segments, and Corporate and Other Activities under this Item 2.
Three months ended September 30,Nine months ended September 30,
2025202420252024
NDS$46,270 (4,549)84,741 13,686 
NBS24,957 26,813 95,963 100,046 
Nelnet Financial Services division:
AGM36,621 (16,346)93,848 41,710 
Nelnet Bank6,088 (4,758)7,573 (7,330)
WRCM1,933 1,276 4,726 4,033 
Nelnet Insurance Services4,061 944 7,268 7,925 
Real estate investments1,513 1,865 (429)(2,223)
Investment securities12,936 9,953 29,031 34,590 
Corporate:
Unallocated corporate costs(9,909)(10,287)(31,819)(29,389)
Solar tax equity investments(15,497)(8,509)(16,184)(8,775)
Nelnet Renewable Energy - solar construction(6,025)(10,125)(30,201)(18,913)
ALLO investment1,137 6,606 194,789 1,953 
Venture capital investments33,520 2,136 39,080 4,848 
Other corporate activities(1,268)2,756 1,263 7,981 
Eliminations/reclassifications112 — 304 — 
Net income before taxes136,448 (2,223)479,953 150,141 
Income tax (expense) benefit(35,773)282 (120,294)(37,653)
Net loss attributable to noncontrolling interests6,009 4,329 11,044 8,398 
Net income$106,684 2,388 370,703 120,886 
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2025 Operating Highlights
Certain transactions have impacted the Company's operating results in 2025. These transactions are summarized below.
Partial Redemption of ALLO Investment
Nelnet had both voting and preferred membership interest investments in ALLO. On June 4, 2025, Nelnet redeemed a portion of its voting membership interests in ALLO and all its outstanding preferred membership interests, including the preferred return accrued on such membership interests through June 3, 2025. The Company received cash proceeds of $410.9 million from ALLO and recognized a pre-tax gain of $175.0 million as a result of this transaction. See note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information about this transaction.
Government Servicing Contract
Upon reaching a final agreement with the Department of Education, the Company's Loan Servicing and Systems operating segment (NDS) recognized $32.9 million of non-recurring revenue in the third quarter 2025 on a contract modification for services previously performed.
Sale of Consumer Loans - Reversal of Allowance
During the third quarter of 2025, the Company's AGM operating segment sold $203.3 million of consumer loans to an unrelated third party who securitized such loans. As partial consideration received for the loans sold, the Company received a residual interest in the loan securitization that is included in "other investments and notes receivable, net" on the Company's consolidated balance sheet. Once a loan is classified as held for sale, any allowance for loan losses that existed immediately prior to the reclassification to held for sale is reversed. During the third quarter of 2025, the Company reduced its allowance (and recognized negative provision expense) of $28.9 million (that increased income) related to this loan sale.
Venture Capital Investment
The Company has an investment in an unaffiliated third-party technology company (the “Investee”). On August 11, 2025, the Investee completed an additional equity raise and accepted tender offers to redeem existing equity holders with a portion of the proceeds. The Company redeemed a portion of its investment and received cash proceeds of $10.1 million and recognized a pre-tax gain of $7.8 million. The Company accounts for its investment in the Investee using the measurement alternative method, which requires it to adjust its carrying value of the investment for changes resulting from observable market transactions. As a result of the Investee’s equity raise, the Company recognized a pre-tax gain of $22.4 million during the third quarter of 2025 to adjust its carrying value of its remaining investment in the Investee to reflect the August 2025 transaction value.
Recent Developments
Canadian Student Loan Servicing Acquisition
On October 23, 2025, the Company announced that it entered into a definitive and binding purchase agreement with DH Corporation, a wholly owned subsidiary of Finastra Holdings Limited (“Finastra”), pursuant to which Nelnet Canada, Inc., a wholly owned subsidiary of the Company, will acquire Finastra’s Canadian student loan servicing business for a purchase price of approximately $93 million in cash. The transaction is expected to close in the first calendar quarter of 2026, subject to customary closing conditions.
Finastra’s Canadian student loan servicing business is the leading provider of student loan servicing solutions to governments and financial institutions in Canada providing technology enabled managed services across the loan lifecycle. The business currently services loans for 2.4 million borrowers on proprietary technology platforms. The operating results of this acquisition will be included in the Loan Servicing and Systems reportable operating segment following the closing of the transaction.
Nelnet Foundation
The Nelnet Foundation was established to help the Company fulfill its core value of giving back to the communities where we live and work. Historically, the Company has contributed annually to the Foundation to support this mission. Due to recent tax law changes and strong operating performance in 2025, the Company’s Board of Directors has approved a contribution of up to $35 million to the Foundation. The Company expects this amount will cover its 2025 annual contribution as well as contributions for the foreseeable future. The full contribution will be expensed in the fourth quarter of 2025.
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CONSOLIDATED RESULTS OF OPERATIONS
An analysis of the Company's consolidated operating results for the three and nine months ended September 30, 2025 compared with the same periods in 2024 is provided below.
The Company operates as distinct reportable operating segments as described above. For a reconciliation of the reportable segment operating results to the consolidated results of operations, see note 12 of the notes to consolidated financial statements included under Part I, Item 1 of this report. Since the Company monitors and assesses its operations and results based on these segments, the discussion following the consolidated results of operations is presented on a reportable segment basis.
 Three months endedNine months ended
 September 30,September 30,
 2025202420252024Additional information
Loan interest$162,717 190,211 501,260 609,064 Decrease was due to a decrease in the average balance of loans and gross yield earned on loans.
Investment interest43,241 50,272 124,815 143,086 Includes income from interest-earning deposits and investments and restricted cash in asset-backed securitizations. Decrease was due to a decrease in interest rates and interest earned on restricted cash in asset-backed securitizations due to lower balances. These decreases were partially offset by an increase in the average balance of investments.
Total interest income205,958 240,483 626,075 752,150 
Interest expense120,708 168,328 378,677 539,367 Decrease was due to a decrease in the average balance of debt outstanding and decrease in cost of funds, partially offset by an increase in interest expense on a larger deposit balance at Nelnet Bank.
Net interest income85,250 72,155 247,398 212,783 
Less (negative provision) provision for loan losses(3,563)18,111 29,704 32,551 
Represents the current period provision to reflect the lifetime expected credit losses related to the Company's loan portfolio. During the third quarter of 2025 and second quarter of 2024, the Company reduced its allowance (and recognized negative provision expense) of $28.9 million and $12.6 million, respectively, related to consumer loan sales. See note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report for the factors impacting provision for loan losses for the periods presented.
Net interest income after provision for loan losses88,813 54,044 217,694 180,232 
Other income (expense):    
LSS revenue151,052 108,175 392,517 344,428 See LSS operating segment - results of operations.
ETSP revenue129,321 118,179 394,836 378,627 
See ETSP operating segment - results of operations.
Reinsurance premiums earned23,165 16,619 73,964 44,250 Represents premiums earned, net of ceded portion, from reinsurance treaties on property and casualty policies. Increase was primarily due to an increase in overall property volume and new business.
Solar construction revenue5,738 19,321 10,992 42,741 
Represents revenue earned from NRE providing solar EPC services. Uncertain economic conditions and legislation activity have impacted new construction projects being initiated which has adversely impacted and will continue to adversely impact revenue. See Part II, Item 1A "Risk Factors" of this report for additional information on the adverse impacts on NRE's business related to the enactment of the One Big Beautiful Bill.
Other, net35,730 15,706 82,401 33,807 
See table below for the components of "other, net."
Loss on sale of loans, net(2,472)(107)(1,562)(1,685)
The Company recognizes gains/losses from selling loans. See NFS division - results of operations - AGM operating segment.
Gain on partial redemption of ALLO investment— — 175,044 — 
Represents a gain recognized from the partial redemption of the ALLO investment. See note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.
Derivative settlements, net761 1,640 2,250 5,046 
The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility. Derivative settlements for each applicable period should be evaluated with the Company's net interest income. See NFS division - results of operations - AGM and Nelnet Bank operating segments - for additional information.
Derivative market value adjustments, net(788)(13,165)(10,978)(3,668)
Includes the realized and unrealized gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP. The majority of the derivative market value adjustments during the periods presented related to the changes in fair value of AGM's floor income interest rate swaps and derivatives at Nelnet Bank. Such changes reflect that a decrease in the forward yield curve during a reporting period results in a decrease in the fair value of the Company's floor income interest rate swaps, and an increase in the forward yield curve during a reporting period results in an increase in the fair value of such swaps.
Total other income (expense), net342,507 266,368 1,119,464 843,546 
Cost of services and expenses:
Loan servicing contract fulfillment and acquisition costs2,021 196 5,500 392 
Represents primarily the amortization of previously capitalized contract fulfillment costs. The costs were pre-contract costs incurred to enhance the resources of the Company to satisfy future performance obligations.
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Cost to provide education technology services and payments50,363 45,273 138,254 134,106 
Represents direct costs to provide payment processing and instructional services in ETSP. See ETSP operating segment - results of operations.
Cost to provide solar construction services7,607 26,815 29,485 49,115 Represents direct costs related to NRE providing solar construction services. Since the acquisition of GRNE Solar, NRE has incurred low and, in many cases, negative margins on legacy projects. The Company has a handful of remaining legacy construction contracts it is obligated to complete, down from over 30 at the beginning of 2024. NRE continues to recognize loss reserves that represent NRE's estimate of costs it will incur to complete the remaining legacy contracts.
Total cost of services59,991 72,284 173,239 183,613 
Salaries and benefits144,778 146,192 417,700 429,701 
Decrease was primarily due to staff reductions announced in June 2024 in the LSS operating segment after the completion of required servicing platform enhancements for the new government servicing contract and the transfer of direct loan servicing volume to one platform. These staff reductions took place during the second half of 2024. These reductions were partially offset by an increase in headcount at the ETSP operating segment to support the growth of its customer base and the investment in the development of new technologies.
Depreciation and amortization7,327 13,661 24,206 45,572 Includes depreciation of property and equipment and the amortization of intangibles from prior business acquisitions. Decrease was primarily due to (i) reduction in depreciation as a result of prior year non-cash impairment charges recognized for lease, buildings, and associated improvements as the Company consolidated office space; and (ii) certain information technology activities moved to cloud computing and such expenses classified as other expenses.
Reinsurance losses and underwriting expenses19,962 16,761 67,836 39,066 Represents case reserve, estimated loss reserve, and amortization of acquisition costs, which consist primarily of commissions and brokerage expenses, net of ceded portion, from reinsurance treaties on property and casualty policies. Increase was primarily due to an increase in overall property volume and new business. Increase was also related to increased claims development in several commercial auto programs, which the Company has exited; however, adverse development of related expenses may continue to be recognized in future periods.
Other expenses53,669 44,685 153,200 138,820 Includes expenses such as postage and distribution, consulting and professional fees, servicing fees, marketing, travel, communications, and certain information technology-related costs. Increase was primarily due to certain information technology activities moved to cloud computing and such expenses are classified as other expenses. See corresponding decrease to depreciation and amortization above.
Total operating expenses225,736 221,299 662,942 653,159 
Impairment expense and provision for beneficial interests9,145 29,052 21,024 36,865 
Represents primarily the provision expense of recognized non-cash allowances for the Company's beneficial interest in certain loan securitizations due to an increase in cumulative loss expectations and non-cash impairment charges related to operating lease assets and a solar development project. See note 9 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.
Total expenses294,872 322,635 857,205 873,637 
Income (loss) before income taxes136,448 (2,223)479,953 150,141 
Income tax (expense) benefit(35,773)282 (120,294)(37,653)
The year-to-date effective tax rate was 24.50% and 23.75% for the nine months ended September 30, 2025 and 2024, respectively. The Company expects its effective tax rate for the year ending December 31, 2025 will range between 23% and 25%.
Net income (loss)100,675 (1,941)359,659 112,488 
Net loss attributable to noncontrolling interests6,009 4,329 11,044 8,398 Represents the net income/loss attributable to the holders of noncontrolling membership interests. The majority is attributed to noncontrolling membership interests related to the Company's solar tax equity investments.
Net income attributable to Nelnet, Inc.$106,684 2,388 370,703 120,886 
Additional information:See "Overview - GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments" above for additional information about non-GAAP financial information.
Net income attributable to Nelnet, Inc.$106,684 2,388 370,703 120,886 
Derivative market value adjustments, net788 13,165 10,978 3,668 
Tax effect(189)(3,160)(2,635)(880)
Non-GAAP net income attributable to Nelnet, Inc., excluding derivative market value adjustments$107,283 12,393 379,046 123,674 
46


The following table summarizes the components of "other, net" in "other income (expense)" on the consolidated statements of income:
 Three months ended September 30,Nine months ended September 30,
 2025202420252024Additional information
Investment activity, net (a)$42,317 8,529 56,216 7,447 See note (b) below for additional information.
Administration/sponsor fee income 2,267 1,420 4,978 4,448 See NFS division - results of operations - AGM operating segment.
Investment advisory services (WRCM) 2,010 1,394 4,987 4,427 See NFS division - results of operations - NFS other operating segments.
Borrower late fee income 1,817 1,741 5,046 7,460 See NFS division - results of operations - AGM operating segment.
ALLO preferred return — 4,783 14,400 11,353 See Corporate - results of operations and note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Loss from ALLO voting membership interest investment — — — (10,693)See Corporate - results of operations and note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Loss from solar investments, net (10,884)(11,238)(11,930)(11,068)See Corporate - results of operations and note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
(Loss) gain on debt repurchases (8,304)7 (7,865)(2)See NFS division - results of operations - AGM operating segment and note 4 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Other 6,507 9,070 16,569 20,435 
Other, net$35,730 15,706 82,401 33,807 
(a)    The Company anticipates fluctuations in future periodic earnings resulting from investment purchases, sales, and valuation adjustments.
(b)    During the third quarter of 2025, the Company recognized a $7.8 million realized gain as a result of redeeming a portion of a venture capital investment and a $22.4 million unrealized gain to adjust the carrying value of its remaining equity interests in this investment to the transaction value. See note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.
Investment activity by operating segment and investment type follows:
Real EstateVenture Capital and FundsEquity / BondsTotalReal EstateVenture Capital and FundsEquity / BondsTotal
Three months ended September 30,
20252024
NFS - AGM$— 4,453 — 4,453 — 1,778 — 1,778 
NFS - Nelnet Bank— 641 741 1,382 — 219 589 808 
NFS - Other Operating Segments1,888 — 775 2,663 2,116 — 1,349 3,465 
Corporate— 33,824 (5)33,819 — 2,478 — 2,478 
$1,888 38,918 1,511 42,317 2,116 4,475 1,938 8,529 
Nine months ended September 30,
20252024
NFS - AGM$— 9,601 — 9,601 — (600)— (600)
NFS - Nelnet Bank— 514 1,176 1,690 — 31 1,874 1,905 
NFS - Other Operating Segments698 — 4,155 4,853 (1,510)— 1,872 362 
Corporate— 40,077 (5)40,072 — 5,780 — 5,780 
$698 50,192 5,326 56,216 (1,510)5,211 3,746 7,447 
47


LOAN SERVICING AND SYSTEMS OPERATING SEGMENT – RESULTS OF OPERATIONS
Loan Servicing Volumes
As of
September 30,
2025		June 30,
2025		March 31,
2025		December 31,
2024		September 30,
2024		June 30,
2024		March 31,
2024		December 31,
2023
Servicing volume
(dollars in millions):
Government$458,679 465,689 482,786 489,877 492,142 489,298 495,409 494,691 
FFELP11,982 12,386 12,826 13,260 13,745 14,576 15,783 17,462 
Private and consumer38,060 38,018 46,728 29,226 20,666 19,876 21,015 20,493 
Total$508,721 516,093 542,340 532,363 526,553 523,750 532,207 532,646 
Number of servicing borrowers:
Government12,387,665 12,694,386 13,453,127 14,049,550 14,114,468 14,096,152 14,328,013 14,503,057 
FFELP482,696 502,205 524,421 549,861 574,979 610,745 656,814 725,866 
Private and consumer1,325,037 1,326,451 1,350,999 1,168,293 851,747 829,072 882,256 894,703 
Total14,195,398 14,523,042 15,328,547 15,767,704 15,541,194 15,535,969 15,867,083 16,123,626 
Number of remote hosted borrowers:2,839,493 2,056,358 1,427,800 842,200 662,075 133,681 65,295 70,580 
Summary and Comparison of Operating Results
 Three months ended September 30,Nine months ended September 30,
 2025202420252024Additional information
Interest income$5318941,8754,046
Represents interest income on cash balances primarily collected from borrower remittances that are subsequently disbursed to servicing customers (lenders). Decrease was due to a decrease in average balance of loan repayment funds held in custody for lenders and a decrease in interest rates.
Loan servicing and systems revenue151,052108,175392,517344,428See table below for additional information.
Intersegment servicing revenue5,3135,42816,60018,419Represents revenue earned by LSS from servicing loans for AGM and Nelnet Bank. Decrease was due to the continued amortization of AGM's FFELP portfolio. Intersegment servicing revenue will continue to decrease as AGM's FFELP portfolio pays off.
Other income1056903312,085Decrease was due to administrative support services provided in 2024 that are no longer being provided. The 2025 activity represents revenue earned from leasing available owned office space to third parties.
Total other income156,470114,293409,448364,932
Contract fulfillment and acquisition costs2,0211965,500392
Represents primarily the amortization of previously capitalized contract fulfillment costs. The costs were pre-contract costs incurred to enhance the resources of the Company to satisfy future performance obligations.
Salaries and benefits70,12676,820205,249224,172
Decrease was due to staff reductions announced in June 2024 after the completion of required servicing platform enhancements for the new government servicing contract and the transfer of direct loan servicing volume to one platform. These staff reductions took place during the second half of 2024.
Depreciation1,7254,8546,19915,304Decrease was due to certain information technology activities moved to cloud computing and incurred at the corporate level and such costs are classified as other expenses and intercompany expenses, respectively.
Postage expense8,7358,46725,86128,350Increase during the three months ended September 30, 2025 compared with the same period in 2024 was primarily due to an increase in consumer loan servicing volume from the conversion of Discover Financial Services and SoFi Lending Corp. during the fourth quarter of 2024 and first quarter of 2025 and higher postage rates. The decrease in the nine months ended September 30, 2025 compared with the same period in 2024 was due to a non-recurring volume-based credit earned from the Company's mail provider and recognized in the first quarter of 2025.
Other expenses10,86211,00032,79331,119
The total of other expenses and intercompany expenses decreased due to moving to one platform in 2024 and continued focus on expense reductions. Intersegment expenses represents costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.
Intersegment expenses17,26218,39950,98055,955
Total operating expenses108,710119,540321,082354,900
Total expenses110,731119,736326,582355,292
48


Income (loss) before income taxes46,270(4,549)84,74113,686
Income tax (expense) benefit(11,105)1,092(20,338)(3,284)Represents income tax expense at an effective tax rate of 24%.
Net income (loss)$35,165(3,457)64,40310,402

GAAP before tax operating margin30.0 %(4.0)%21.0 %3.8 %
Before tax operating margin is a measure of before tax operating profitability as a percentage of revenue, and for LSS is calculated as income before income taxes divided by the total of loan servicing and systems revenue (less contract fulfillment and acquisition costs), intersegment servicing revenue, and other income. The Company uses this metric to monitor and assess the segment’s performance, manage operating costs, identify and evaluate business trends affecting the segment, and make strategic decisions, and believes that it provides additional information to facilitate an understanding of the operating performance of the segment and provides a meaningful comparison of the results of operations between periods.
Before tax operating margin, excluding the $32.9 million of non-recurring government loan servicing revenue recognized in the third quarter of 2025 as discussed below, increased due to an increase in private education and consumer loan servicing volume and a decrease in total expenses obtained through cost-saving measures executed primarily in 2024. This was partially offset for the nine months ended September 30, 2025 compared with the same period in 2024 due to lower revenue earned on a per-borrower blended basis under the new government servicing contract (which the Company recognized revenue under beginning April 1, 2024) as compared with the legacy government contract.
Non-recurring government loan servicing revenue(19.0)— (7.0)— 
Non-GAAP before tax operating margin, excluding non-recurring government loan servicing revenue11.0 %(4.0)%14.0 %3.8 %
Loan servicing and systems revenue
The following table presents disaggregated revenue by service offering for each reporting period:
Three months ended September 30,Nine months ended September 30,
 2025202420252024Additional information
Government loan servicing$112,798 85,215 285,896 277,705 
Represents revenue from the Company's servicing contract with the Department. Upon reaching a final agreement with the Department, the Company recognized $32.9 million of non-recurring revenue in the third quarter of 2025 on a contract modification for services previously performed. Excluding the non-recurring revenue, the decrease was due to a decrease in the number of borrowers serviced, and for the nine months ended September 30, 2025 compared to the same period in 2024 was also due to lower revenue earned on a per-borrower blended basis under the new government servicing contract (which the Company recognized revenue under beginning April 1, 2024) as compared with the legacy government contract. The Company expects the number of borrowers serviced under this contract will continue to decrease through the fourth quarter of 2025 as volume is transferred from the Company to its remote hosted servicing customer at the Department's direction to stand-up and establish the new servicer. In addition, volume is expected to decrease beginning in the fourth quarter of 2025 due to borrowers exiting the CARES forbearance period that have not made payments. These borrowers are expected to be transferred to the Debt Management and Collections System that is operated by the Department of Education and used to manage and facilitate the collection of defaulted federal student loans.
Private education and consumer loan servicing24,293 13,057 69,721 38,634 
Increase was due to an increase in loan servicing volume from the conversion of Discover Financial Services and SoFi Lending Corp. loan portfolios during the fourth quarter of 2024 and first quarter of 2025. Over time, revenue earned on the Discover Financial Services portfolio will decrease as borrowers pay off their loans.
FFELP loan servicing2,035 2,945 6,909 9,570 
Represents revenue from servicing third-party customers' FFELP portfolios. Over time, FFELP servicing revenue will decrease as third-party customers' FFELP portfolios pay off.
Software services10,584 5,197 27,027 14,617 
Represents revenue from providing remote hosted servicing software to certain Department and other servicers and providing diversified technology services. Increase was primarily due to the Company's recognition of revenue beginning in the second quarter of 2024 from a new remote hosted servicing customer awarded a USDS contract. The Company expects software services revenue to increase through the fourth quarter of 2025 as additional volume is transferred from the Company to this new remote hosted servicing customer at the Department's direction to stand-up and establish the new servicer.
Outsourced services1,342 1,761 2,964 3,902 Represents revenue from providing contact center and back office operational outsourcing services.
Loan servicing and systems revenue$151,052 108,175 392,517 344,428 
49


EDUCATION TECHNOLOGY SERVICES AND PAYMENTS OPERATING SEGMENT – RESULTS OF OPERATIONS
As discussed further in the Company's 2024 Annual Report, this segment of the Company’s business is subject to seasonal fluctuations which correspond, or are related to, the traditional school year. Based on the timing of revenue recognition and when expenses are incurred, revenue and before tax operating margin are higher in the first quarter compared with the remainder of the year.
Summary and Comparison of Operating Results
 Three months ended September 30,Nine months ended September 30,
 2025202420252024Additional information
Interest income$8,564 9,734 20,921 23,315 
Represents interest income on tuition funds held in custody for schools. Decrease was due to a decrease in interest rates partially offset by higher balances.
Education technology services and payments revenue
129,321 118,179 394,836 378,627 See table below for additional information.
Intersegment revenue70 60 198 166 
Total other income129,391 118,239 395,034 378,793 
Cost of services50,363 45,273 138,254 134,106 See table below for additional information.
Salaries and benefits43,029 41,053 126,368 121,956 Increase was due to an increase in headcount to support the growth of the customer base and the investment in the development of new technologies.
Depreciation and amortization2,504 2,616 7,439 8,012 
Other expenses9,537 7,614 28,489 23,772 Increase was due to an increase in professional fees and technology services.
Intersegment expenses, net6,420 4,604 18,297 14,216 Represents costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.
Total operating expenses61,490 55,887 180,593 167,956 
Impairment expense1,145 — 1,145 — The Company recorded a non-cash impairment charge related to capitalized software during the third quarter of 2025.
Total expenses112,998 101,160 319,992 302,062 
Income before income taxes24,957 26,813 95,963 100,046 
Income tax expense(5,990)(6,450)(23,042)(24,035)Represents income tax expense at an effective tax rate of 24%.
Net income18,967 20,363 72,921 76,011 
Net loss attributable to noncontrolling interests— 54 45 101 Amounts for noncontrolling interests reflect the net loss attributable to the holders of minority membership interests in NextGen. In April 2025, the Company acquired the remaining 20.0% of NextGen for $3.9 million.
Net income$18,967 20,417 72,966 76,112 Net income has been negatively impacted in 2025 compared with 2024 due to a decrease in contribution from FACTS education services as a result of the end of funding of the EANS program in 2024 as described in the revenue table below and an increase in operating expenses to support the growth in the customer base and investments in the development of new technologies.
50


Education technology services and payments revenue
The following table presents disaggregated revenue by service offering and before tax operating margin for each reporting period:
 Three months ended September 30,Nine months ended September 30,
 2025202420252024Additional information
Tuition payment plan services$32,97131,659109,057104,702
Increase was due to a higher number of payment plans in the K-12 and higher education markets for both new and existing customers.
Payment processing59,48455,813148,535137,926Increase was due to an increase in payment volumes for both the K-12 and higher education markets due to new customers and an increase in volume from existing customers.
Education technology services36,32330,080136,499133,306
Increase was due to an increase in professional development services and instructional services from non-Emergency Assistance to Non-Public Schools (EANS) funding sources, in addition to increases in revenue from the Company's financial aid management and enrollment services. The timing and amount of revenue recognition for professional development and instructional services depends on both the availability of government funding to schools and each school's decision regarding when and how to use those funds. This increase was partially offset by a decrease in FACTS education services revenue which resulted from the winding down of economic aid provided to private schools in response to the COVID-19 pandemic. Instructional services revenue provided to private schools has been funded by the EANS program. The EANS II program funding ended on September 30, 2024. Although schools still have allocated funds to spend, future instructional services revenue will be adversely impacted compared to recent historical results due to the EANS funding ending in 2024. Revenue earned under the EANS program was $1.6 million and $0.1 million for the first and second quarters of 2025 ($1.7 million earned year to date through September 30, 2025) and $2.4 million and $21.4 million for the three and nine month periods ended September 30, 2024.
Other5436277452,693
Education technology services and payments revenue129,321118,179394,836378,627
Cost of services50,36345,273138,254134,106Represents direct costs to provide payment processing revenue and such costs decrease/increase in relationship to payment volumes. Costs to provide instructional services are also a component of this expense and decrease/increase in relationship to instructional services revenues.
Net revenue$78,95872,906256,582244,521
GAAP before tax operating margin31.6 %36.8 %37.4 %40.9 %
Before tax operating margin, excluding net interest income, is a non-GAAP measure of before tax operating profitability as a percentage of revenue, and for the ETSP segment is calculated as income before income taxes less net interest income divided by net revenue. The Company uses this metric to monitor and assess the segment’s performance, manage operating costs, identify and evaluate business trends affecting the segment, and make strategic decisions, and believes that it facilitates an understanding of the operating performance of the segment and provides a meaningful comparison of the results of operations between periods.
Before tax operating margin, excluding net interest income, decreased primarily due to an increase in operating expenses to support the growth in the customer base and investments in the development of new technologies. Before tax operating margin will continue to be impacted by these items throughout 2025 compared with 2024.
Net interest income(10.8)(13.4)(8.2)(9.5)
Non-GAAP before tax operating margin, excluding net interest income20.8 %23.4 %29.2 %31.4 %
51


NELNET FINANCIAL SERVICES DIVISION - RESULTS OF OPERATIONS
Asset Generation and Management Operating Segment
Loan Portfolio
As of September 30, 2025, the AGM operating segment had an $8.8 billion loan portfolio, consisting primarily of federally insured loans. For a summary of the Company’s loan portfolio as of September 30, 2025 and December 31, 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Loan Activity
The following table sets forth the activity of loans in the AGM operating segment:
FFELPPrivateConsumer loans and other financing receivablesTotal
Three months ended September 30, 2025
Balance as of June 30, 2025$8,367,085 156,614 411,470 8,935,169 
Loan acquisitions (a)70,301 — 1,516,370 1,586,671 
Repayments, claims, capitalized interest, participations, and other, net(214,179)(8,084)(883,850)(1,106,113)
Loans lost to external parties(55,470)(793)— (56,263)
Loans sold(229,983)— (203,251)(433,234)
Loans contributed to Nelnet Bank(77,497)— — (77,497)
Balance as of September 30, 2025$7,860,257 147,737 840,739 8,848,733 
Three months ended September 30, 2024
Balance as of June 30, 2024$9,483,733 247,437 179,447 9,910,617 
Loan acquisitions104,914 — 129,202 234,116 
Repayments, claims, capitalized interest, participations, and other, net(310,953)(12,300)(62,951)(386,204)
Loans lost to external parties(206,952)(842)— (207,794)
Loans sold— — (1,146)(1,146)
Balance as of September 30, 2024$9,070,742 234,295 244,552 9,549,589 
Nine months ended September 30, 2025
Balance as of December 31, 2024$8,388,564 221,744 345,560 8,955,868 
Loan acquisitions (a)773,727 — 1,788,660 2,562,387 
Repayments, claims, capitalized interest, participations, and other, net(681,548)(29,539)(1,090,082)(1,801,169)
Loans lost to external parties(181,006)(2,295)— (183,301)
Loans sold(361,983)— (203,399)(565,382)
Loans contributed to Nelnet Bank(77,497)(42,173)— (119,670)
Balance as of September 30, 2025$7,860,257 147,737 840,739 8,848,733 
Nine months ended September 30, 2024
Balance as of December 31, 2023$11,686,207 277,320 85,935 12,049,462 
Loan acquisitions104,914 — 405,211 510,125 
Repayments, claims, capitalized interest, participations, and other, net(961,171)(40,258)(111,253)(1,112,682)
Loans lost to external parties(1,559,516)(2,767)— (1,562,283)
Loans sold(199,692)— (135,341)(335,033)
Balance as of September 30, 2024$9,070,742 234,295 244,552 9,549,589 
(a)    The Company began to acquire Pay Later receivables during the third quarter of 2025. Consumer loan acquisitions excluding Pay Later receivables was $169.9 million and $442.2 million during the three and nine months ended September 30, 2025, respectively.
52


The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations that are accounted for as held-to-maturity beneficial interest investments and included in "other investments and notes receivable, net" in the Company's consolidated financial statements. As of the latest remittance reports filed by the various trusts prior to or as of September 30, 2025, the Company’s ownership correlates to approximately $1.75 billion of loans included in these securitizations. The loans held in these securitizations are not included in the above table. Investment interest income earned by the Company from the beneficial interest in loan securitizations is included in "investment interest" on the Company's consolidated statements of income and is not a component of the Company's loan interest income.
Beginning in late 2021, the Company experienced accelerated run-off of its FFELP portfolio due to FFELP borrowers consolidating their loans into Federal Direct Loan Program loans as a result of the CARES Act payment pause on Department-held loans and the initiatives offered by the Department for FFELP borrowers to consolidate their loans to qualify for loan forgiveness under various programs. However, the Company has experienced a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024, which has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates.
Allowance for Loan Losses, Loan Delinquencies, and Loan Charge-offs
For a summary of the allowance as a percentage of the ending balance, loan status, delinquency amounts, and other key credit quality indicators for each of AGM’s loan portfolios as of September 30, 2025 and December 31, 2024; and the activity in AGM's allowance for loan losses and net charge-offs as a percentage of average loans for the three and nine months ended September 30, 2025 and 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Loan Spread Analysis
The following table analyzes the loan spread on AGM’s portfolio of loans, which represents the spread between the yield earned on loan assets and the costs of the liabilities and derivative instruments used to fund the assets. The spread amounts included in the following table are calculated by using the notional dollar values found in the table under the caption "Net loan interest income, including settlements on derivatives" below, divided by the average balance of loans or debt outstanding.
 Three months ended September 30,Nine months ended September 30,
2025202420252024
Variable loan yield, gross6.89 %8.16 %7.37 %8.10 %
Consolidation rebate fees(0.83)(0.80)(0.82)(0.80)
Discount accretion, net of premium and deferred origination costs amortization0.50 (0.02)0.07 0.04 
Variable loan yield, net6.56 7.34 6.62 7.34 
Loan cost of funds - interest expense (a)(5.34)(6.44)(5.45)(6.48)
Loan cost of funds - derivative settlements (b) (c)0.010.010.010.01
Variable loan spread1.23 0.91 1.18 0.87 
Fixed-rate floor income, gross0.05 0.01 0.05 0.01 
Fixed-rate floor income - derivative settlements (b) (d)0.02 0.05 0.02 0.04 
Fixed-rate floor income, net of settlements on derivatives0.07 0.06 0.07 0.05 
Core loan spread1.30 %0.97 %1.25 %0.92 %
Average balance of AGM's loans$8,774,923 9,792,095 9,178,273 10,612,686 
Average balance of AGM's debt outstanding7,775,269 9,296,236 8,219,778 10,280,527 
(a)    The Company recognized $5.6 million in non-cash interest expense during the third quarter of 2024 as a result of writing off the remaining unamortized debt discount related to the redemption of certain asset-backed debt securities prior to their maturity. This non-cash expense was excluded from the respective periods in the table above.
(b)    Derivative settlements represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the Company's derivative instruments based on their contractual terms. Derivative accounting requires that net settlements with respect to derivatives that do not qualify for "hedge treatment" under GAAP be recorded in a separate income statement line item below net interest income. The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility. As such, management believes derivative settlements for each applicable period should be evaluated with the Company’s net interest income (loan spread) as presented in this table. The Company reports this non-GAAP information because the Company believes that it provides additional information regarding operational and performance indicators that are closely assessed by management. There is no comprehensive, authoritative guidance for the presentation of such non-GAAP information,
53


which is only meant to supplement GAAP results by providing additional information that management utilizes to assess performance. See note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information on the Company's Non-Nelnet Bank derivative instruments, including the net settlement activity recognized by the Company for each type of derivative for the 2025 and 2024 periods presented in the table under the caption "Consolidated Financial Statement Impact Related to Derivatives - Statements of Income" in note 5 and in this table.
A reconciliation of core loan spread, which includes the impact of derivative settlements on loan spread, to loan spread without derivative settlements follows:
Three months ended September 30,Nine months ended September 30,
2025202420252024
Core loan spread1.30 %0.97 %1.25 %0.92 %
Derivative settlements (basis swaps)(0.01)(0.01)(0.01)(0.01)
Derivative settlements (fixed-rate floor income)(0.02)(0.05)(0.02)(0.04)
Loan spread1.27 %0.91 %1.22 %0.87 %
(c)    Derivative settlements consist of net settlements received related to the Company’s basis swaps.
(d)    Derivative settlements consist of net settlements received related to the Company’s floor income interest rate swaps.
The relationship between the indices in which AGM earns interest on its loans and funds such loans has a significant impact on loan spread. See Item 3, “Quantitative and Qualitative Disclosures About Market Risk - Interest Rate Risk - AGM Operating Segment,” which provides additional detail on AGM’s FFELP student loan assets and related funding for those assets. In a decreasing interest rate environment, student loan spread on FFELP loans decreases in the short term because of the timing of interest rate resets on the Company's assets occurring daily in contrast to the timing of the interest rate resets on the Company's debt occurring either monthly or quarterly. This also results in student loan spread increasing in the short term in an increasing interest rate environment.
Variable loan spread was higher during the three and nine months ended September 30, 2025 compared with the same periods in 2024 due to an increase in loans funded by the Company with operating cash (versus funded with debt). As of September 30, 2025, AGM had $291.9 million (par value) of unencumbered federally insured, private education, consumer, and other loans (as compared to $253.5 million, $249.2 million, and $77.0 million as of December 31, 2024, September 30, 2024, and December 31, 2023, respectively). The difference between variable loan spread and core loan spread is fixed-rate floor income earned on a portion of AGM's federally insured student loan portfolio. See Item 3, “Quantitative and Qualitative Disclosures About Market Risk - Interest Rate Risk - AGM Operating Segment,” which provides additional detail on AGM's federally insured student loans earning fixed-rate floor income.
Summary and Comparison of Operating Results
Three months ended September 30,Nine months ended September 30,
 2025202420252024Additional information
Interest income:
Loan interest$145,984 180,571 457,752 583,907 See table below for additional analysis.
Investment interest12,051 18,970 37,462 54,513 Decrease was due to less investment interest earned on beneficial interest investments and restricted cash included in student loan securitizations and other secured debt facilities. AGM earned $7.3 million and $10.5 million of interest income on beneficial interest investments for the three months ended September 30, 2025 and 2024, respectively, and $23.7 million and $27.5 million for the nine months ended September 30, 2025 and 2024, respectively. Interest earned on restricted cash decreased due to lower balances and a decrease in interest rates.
Total interest income158,035 199,541 495,214 638,420 
Loan interest expense104,616 156,050 334,869 504,509 See table below for additional analysis.
Intercompany interest expense8,734 5,092 12,850 19,169 Represents interest paid by AGM to Nelnet, Inc. (parent company) related to (i) internal borrowings to fund equity advances on certain AGM debt facilities; and (ii) AGM issued bonds held by Nelnet, Inc. Increase for the three months ended September 2025 compared with the same period in 2024 was due to an increase in the weighted average balance of outstanding AGM issued bonds held by Nelnet, Inc., partially offset by a decrease in interest rates. Decrease for the nine months ended September 2025 compared with the same period in 2024 was due to a decrease in the weighted average balance of outstanding AGM issued bonds held by Nelnet, Inc. and a decrease in interest rates. Intercompany interest is eliminated for consolidated financial reporting purposes.
Net interest income44,685 38,399 147,495 114,742 
54


Less (negative provision) provision for loan losses(7,374)11,968 16,770 14,199 
During the third quarter of 2025 and second quarter of 2024, the Company reduced its allowance (and recognized negative provision expense) of $28.9 million and $12.6 million, respectively, related to consumer loan sales. See note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information and other factors impacting provision for loan losses for the periods presented.
Net interest income after provision for loan losses52,059 26,431 130,725 100,543 
Other income, net195 4,918 11,697 11,239 Represents primarily gain/loss on debt repurchases, borrower late fees, income from providing administration activities for third parties, sponsor fee income, and income/losses from AGM's investment in joint ventures. See "Overview - Consolidated Results of Operations" for further detail included in other income.
Loss on sale of loans, net(2,472)(107)(1,562)(1,685)
The Company recognizes gains/losses from selling portfolios of loans. See above under "Loan Activity" for loans sold during the three and nine months ended September 30, 2025 and 2024.
Derivative settlements, net594 1,359 1,756 4,356 
The Company maintains an overall risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility. Derivative settlements for each applicable period should be evaluated with the Company's net interest income as reflected in the table below.
Derivative market value adjustments, net(461)(9,518)(6,422)(2,875)
Includes the realized and unrealized gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP. The majority of the derivative market value adjustments during the periods presented related to the changes in fair value of the Company's floor income interest rate swaps. Such changes reflect that a decrease in the forward yield curve during a reporting period results in a decrease in the fair value of the Company's floor income interest rate swaps, and an increase in the forward yield curve during a reporting period results in an increase in the fair value of such swaps.
Total other income, net(2,144)(3,348)5,469 11,035 
Salaries and benefits1,971 1,220 4,661 3,529 Increase was due to an increase in headcount as the Company actively expands into new asset loan classes.
Servicing fees6,687 7,011 20,700 24,503 
Represents servicing fees paid to (i) third parties and (ii) LSS for the servicing of AGM’s loans. The amounts paid to LSS exceed the actual cost of servicing the loans. Decrease was due to the amortization of the FFELP student loan portfolio, the majority of which is serviced by LSS. Intercompany servicing expense of $4.5 million and $5.2 million during the three months ended September 30, 2025 and 2024, respectively, and $14.2 million and $17.7 million during the nine months ended September 30 2025 and 2024, respectively, was eliminated for consolidated financial reporting purposes.
Other expenses1,243 970 4,595 3,217 Increase was due to an increase in costs associated with the Company actively expanding into new asset loan classes.
Intersegment expenses1,248 1,276 3,758 3,756 Includes costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.
Total operating expenses11,149 10,477 33,714 35,005 
Total operating expenses were 51 and 43 basis points of the average balance of loans for the three months ended September 30, 2025 and 2024, respectively, and 49 and 44 for the nine months ended September 30, 2025 and 2024, respectively. Increase in expenses compared to the average balance of loans was due to an increase in costs associated with the Company actively expanding into new asset classes.
Provision for beneficial interests2,145 28,952 8,632 34,863 
During the periods presented, the Company recorded an allowance for credit losses (and related provision expense) related to the Company's beneficial interest in certain loan securitizations. See note 9 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.
Total expenses13,294 39,429 42,346 69,868 
Income (loss) before income taxes36,621 (16,346)93,848 41,710 
Income tax (expense) benefit(8,783)3,923 (22,508)(10,010)Represents income tax expense at an effective tax rate of 24%.
Net income (loss)27,838 (12,423)71,340 31,700 
Net income attributable to noncontrolling interests(27)— (67)— 
Net income (loss)$27,811 (12,423)71,273 31,700 
Additional information:
GAAP net income (loss)$27,811 (12,423)71,273 31,700 See "Overview - GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments" above for additional information about non-GAAP financial information. Increase in net income, excluding derivative market value adjustments, was due to (1) an increase in net loan interest income due to an increase in core loan spread, offset by the decrease in the average balance of loans outstanding; (2) the reduction of allowance (and negative provision) related to loans sold in the third quarter of 2025; and (3) a reduction of provision expense related to beneficial interest investments. These items were offset by an increase in an initial provision expense for loans purchased during the periods and a decrease in investment interest income.
Derivative market value adjustments, net461 9,518 6,422 2,875 
Tax effect(111)(2,284)(1,541)(690)
Non-GAAP net income (loss), excluding derivative market value adjustments$28,161 (5,189)76,154 33,885 
55


Net loan interest income, including settlements on derivatives
The following table summarizes the components of "loan interest," "loan interest expense," and "derivative settlements, net:"
 Three months ended September 30,Nine months ended September 30,
 2025202420252024Additional information
Variable interest income, gross$152,100 200,528 506,012 643,714 Decrease was due to a decrease in the average balance of loans and gross yield earned on loans.
Consolidation rebate fees(18,172)(19,687)(55,817)(63,870)Decrease was due to a decrease in the average consolidation loan balance.
Discount accretion, net of premium and deferred origination costs amortization11,029 (495)4,558 3,500 
Increase in net discount accretion for the three and nine months ended September 30, 2025 was due to a new forward flow agreement of Pay Later receivables purchased during the third quarter of 2025 that have a short estimated life and purchased at a discount.
Variable interest income, net144,957 180,346 454,753 583,344 
Interest on bonds and notes payable(104,616)(156,050)(334,869)(504,509)Decrease was due to a decrease in the average balance of debt outstanding and cost of funds.
Derivative settlements, net (a)156 159 463 773 Represents net derivative settlements received related to the Company’s basis swaps.
Variable loan interest margin, net of settlements on derivatives40,497 24,455 120,347 79,608 
Fixed-rate floor income, gross1,027 225 2,999 563 Increase was due to lower interest rates.
Derivative settlements, net (a)438 1,200 1,293 3,583 
Represents net derivative settlements received related to the Company's floor income interest rate swaps. Decrease was due to lower interest rates.
Fixed-rate floor income, net of settlements on derivatives1,465 1,425 4,292 4,146 
Net loan interest income, including derivative settlements (core loan interest income) (a)$41,962 25,880 124,639 83,754 
(a)    Net loan interest income, including derivative settlements (core loan interest income) is a non-GAAP financial measure. For an explanation of GAAP accounting for derivative settlements and the reasons why the Company reports these non-GAAP measures (and the limitations thereof), see footnote (b) to the table immediately under the caption “Loan Spread Analysis” above. See note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information on the Company's derivative instruments, including the net settlement activity recognized by the Company for each period and for each type of derivative referred to in the "Additional information" column of this table, which is presented in the table in note 5 under the caption "Consolidated Financial Statement Impact Related to Derivatives - Statements of Income".
56


Nelnet Bank Operating Segment
Loan Portfolio
As of September 30, 2025, Nelnet Bank had a $974.9 million loan portfolio. For a summary of Nelnet Bank’s loan portfolio as of September 30, 2025 and December 31, 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Loan Activity
The following table sets forth the activity of loans in the Nelnet Bank operating segment:
FFELPPrivateConsumer and otherTotal
Three months ended September 30, 2025
Balance as of June 30, 2025$106,555 516,663 204,423 827,641 
Loan acquisitions and originations— 36,175 74,654 110,829 
Repayments(5,104)(23,442)(12,538)(41,084)
Loans contributed from AGM77,497 — — 77,497 
Balance as of September 30, 2025$178,948 529,396 266,539 974,883 
Three months ended September 30, 2024
Balance as of June 30, 2024$— 354,412 187,939 542,351 
Loan acquisitions and originations— 10,843 36,409 47,252 
Repayments— (12,601)(17,130)(29,731)
Balance as of September 30, 2024$— 352,654 207,218 559,872 
Nine months ended September 30, 2025
Balance as of December 31, 2024$— 482,445 162,152 644,597 
Loan acquisitions and originations111,040 73,572 129,385 313,997 
Repayments(9,589)(68,794)(24,998)(103,381)
Loans contributed from AGM77,497 42,173 — 119,670 
Balance as of September 30, 2025$178,948 529,396 266,539 974,883 
Nine months ended September 30, 2024
Balance as of December 31, 2023$— 360,520 72,352 432,872 
Loan acquisitions and originations— 28,948 176,257 205,205 
Repayments— (36,814)(41,391)(78,205)
Balance as of September 30, 2024$— 352,654 207,218 559,872 
Allowance for Loan Losses, Loan Delinquencies, and Loan Charge-offs
For a summary of the allowance as a percentage of the ending balance, loan status, delinquency amounts, and other key credit quality indicators for each of Nelnet Bank's loan portfolios as of September 30, 2025 and December 31, 2024; and the activity in Nelnet Bank's allowance for loan losses and net charge-offs as a percentage of average loans for the three and nine months ended September 30, 2025 and 2024, see note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Investments
As of September 30, 2025, Nelnet Bank had a $1.01 billion investment portfolio, consisting primarily of asset-backed securities. For a summary of Nelnet Bank's asset-backed securities investments as of September 30, 2025 and December 31, 2024, see note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Deposits
As of September 30, 2025, Nelnet Bank had $1.73 billion of deposits, which included $256.3 million from Nelnet, Inc. (parent company) and its subsidiaries (intercompany), and thus have been eliminated for consolidated financial reporting purposes. For a summary of deposits as of September 30, 2025 and December 31, 2024, see note 10 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
57


Average Balance Sheet
The following table reflects the rates earned on interest-earning assets and paid on interest-bearing liabilities:
Three months ended September 30, (a)
Nine months ended September 30, (a)
2025202420252024
BalanceRateBalanceRateBalanceRateBalanceRate
Average assets
Federally insured student loans$155,873 6.24 %$— — %$97,053 6.23 %$— — %
Private education loans517,782 6.45 351,468 4.37 509,055 6.31 359,242 4.33 
Consumer and other loans227,211 10.25 198,337 11.58 190,781 10.48 149,414 12.07 
Cash and investments957,479 6.15 650,951 7.65 892,017 6.19 618,130 7.20 
Total interest-earning assets1,858,345 6.74 %1,200,756 7.34 %1,688,906 6.71 %1,126,786 6.93 %
Non-interest-earning assets19,203 16,379 15,801 15,667 
Total assets$1,877,548 $1,217,135 $1,704,707 $1,142,453 
Average liabilities and equity
Brokered deposits$269,913 2.12 %$247,726 1.95 %$262,837 2.06 %$229,698 1.74 %
Intercompany deposits 168,768 4.02 168,639 4.71 133,708 3.90 158,628 4.80 
Retail and other deposits1,173,846 4.24 644,051 5.01 1,070,813 4.23 603,292 4.98 
Federal funds purchased and other borrowed money25,038 4.92 — — 16,287 5.01 — — 
Total interest-bearing liabilities1,637,565 3.88 %1,060,416 4.25 %1,483,645 3.82 %991,618 4.20 %
Non-interest-bearing liabilities12,999 8,507 10,561 7,786 
Equity226,984 148,212 210,501 143,049 
Total liabilities and equity$1,877,548 $1,217,135 $1,704,707 $1,142,453 
Net interest margin3.32 %3.59 %3.35 %3.23 %
(a) Calculated using average daily balances.

58


Summary and Comparison of Operating Results
 Three months ended September 30,Nine months ended September 30,
 2025202420252024Additional information
Interest income:
Loan interest$16,733 9,639 43,508 25,157 Represents interest earned on loans. Increase was due to an increase in the balance and mix of loans.
Investment interest14,849 12,522 41,278 33,301 Represents interest earned on cash and investments. Increase was due to an increase of these balances, partially offset by a decrease in interest rates.
Total interest income31,582 22,161 84,786 58,458 
Interest expense16,179 11,606 42,928 31,872 Represents interest expense on deposits. Increase was due to an increase in the balance of deposits, partially offset by a decrease in interest rates.
Net interest income 15,403 10,555 41,858 26,586 
Provision for loan losses3,811 6,143 12,934 18,352 
See note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report for factors impacting provision for loan losses for the periods presented.
Net interest income after provision for loan losses11,592 4,412 28,924 8,234 
Other income, net1,308 841 1,842 1,991 
Represents primarily net gains and income from investments.
Derivative settlements, net167 281 494 690 
Nelnet Bank uses derivatives to hedge its exposure related to variable-rate deposits to minimize volatility from future changes in interest rates. Nelnet Bank has designated all of its derivative instruments as cash flow hedges; however, because certain hedged items are intercompany deposits, the corresponding derivative instruments are not eligible for hedge accounting in the consolidated financial statements. Accordingly, changes in fair value of such derivatives are recorded through earnings and presented as "derivative market value adjustments, net" in the statements of operations. "Derivative settlements, net" represent the cash paid or received during the respective period to settle with derivative instrument counterparties the economic effect of the Company's derivative instruments that do not qualify for hedge accounting based on their contractual terms. For additional information on Nelnet Bank's derivative portfolio, see note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Derivative market value adjustments, net(327)(3,647)(4,556)(793)
Total other income, net1,148 (2,525)(2,220)1,888 
Salaries and benefits2,817 2,973 8,424 8,491 Represents salaries and benefits of Nelnet Bank associates and third-party contract labor.
Depreciation355 343 1,046 944 
Servicing fees838 285 2,329 711 
Represents primarily fees paid to LSS for servicing certain of Nelnet Bank's loans. Intercompany servicing expense of $0.7 million and $0.2 million for the three months ended September 30, 2025 and 2024, respectively, and $1.9 million and $0.5 million for the nine months ended September 30, 2025 and 2024, respectively, was eliminated for consolidated financial reporting purposes.
Other expenses1,916 2,463 5,243 5,577 Represents various expenses such as marketing, consulting and professional fees, collection costs, software, FDIC insurance, and management fees.
Intersegment expenses726 581 2,089 1,729 
Intersegment expenses include costs for certain corporate activities and services that are allocated to each operating segment based on estimated use of such activities and services.
Total operating expenses6,652 6,645 19,131 17,452 
Income (loss) before income taxes6,088 (4,758)7,573 (7,330)
Income tax (expense) benefit(1,483)1,143 (1,816)1,800 
Represents an effective tax rate of 24.4% and 24.0% for the three months ended September 30, 2025 and 2024, respectively, and 24.0% and 24.6% for the nine months ended September 30, 2025 and 2024, respectively.
Net income (loss)$4,605 (3,615)5,757 (5,530)
Additional information:
Net income (loss)$4,605 (3,615)5,757 (5,530)

See "Overview - GAAP Net Income and Non-GAAP Net Income, Excluding Adjustments" above for additional details about non-GAAP financial information.
Derivative market value adjustments, net327 3,647 4,556 793 
Tax effect(78)(875)(1,093)(190)
Net income (loss), excluding derivative market value adjustments$4,854 (843)9,220 (4,927)
59


NFS Other Operating Segments
The following table summarizes the operating results of other operating segments included in NFS that are not reportable. Income taxes are allocated based on 24% of income (loss) before taxes for each activity.
Summary and Comparison of Operating Results
WRCM (a)Nelnet Insurance Services (b)Real estate investments (c)Investment securities (d)Total
Three months ended September 30, 2025
Investment interest$4 2,552 — 12,429 14,985 
Interest expense— (1,313)— (46)(1,359)
Net interest income4 1,239 — 12,383 13,626 
Reinsurance premiums earned— 23,165 — — 23,165 
Other income, net2,017 1,183 1,888 586 5,674 
Salaries and benefits(34)(386)(248)— (668)
Reinsurance losses and underwriting expenses— (19,962)— — (19,962)
Other expenses(50)(1,030)(22)(1)(1,103)
Intersegment expenses, net(4)(148)(105)(32)(289)
Income (loss) before income taxes1,933 4,061 1,513 12,936 20,443 
Income tax (expense) benefit(418)(974)(369)(3,105)(4,866)
Net (income) loss attributable to noncontrolling interests(193)— 24 — (169)
Net income (loss)$1,322 3,087 1,168 9,831 15,408 
Three months ended September 30, 2024
Investment interest$4 1,354 95 10,962 12,415 
Interest expense—(463)— (1,782)(2,245)
Net interest income4 891 95 9,180 10,170 
Reinsurance premiums earned— 16,619 — — 16,619 
Other income, net1,399 1,427 2,116 809 5,751 
Salaries and benefits(54)(138)(206)— (398)
Reinsurance losses and underwriting expenses— (16,761)— — (16,761)
Other expenses(69)(1,042)(31)(1)(1,143)
Intersegment expenses, net(4)(52)(109)(35)(200)
Income (loss) before income taxes1,276 944 1,865 9,953 14,038 
Income tax (expense) benefit(276)(227)(450)(2,388)(3,341)
Net (income) loss attributable to noncontrolling interests(128)— 11 — (117)
Net income (loss)$872 717 1,426 7,565 10,580 
60


WRCM (a)Nelnet Insurance Services (b)Real estate investments (c)Investment securities (d)Total
Nine months ended September 30, 2025
Investment interest$11 7,009 — 25,656 32,676 
Interest expense— (3,509)— (49)(3,558)
Net interest income11 3,500 — 25,607 29,118 
Reinsurance premiums earned— 73,964 — — 73,964 
Other income, net4,997 2,829 698 3,526 12,050 
Salaries and benefits(96)(931)(658)— (1,685)
Reinsurance losses and underwriting expenses— (67,836)— — (67,836)
Other expenses(175)(3,819)(82)(4)(4,080)
Intersegment expenses, net(11)(439)(306)(98)(854)
Impairment expense— — (81)— (81)
Income (loss) before income taxes4,726 7,268 (429)29,031 40,596 
Income tax (expense) benefit(1,021)(1,744)87 (6,967)(9,645)
Net (income) loss attributable to noncontrolling interests(473)— 66 — (407)
Net income (loss)$3,232 5,524 (276)22,064 30,544 
Nine months ended September 30, 2024
Investment interest$11 3,693 380 39,826 43,910 
Interest expense— (1,052)— (6,216)(7,268)
Net interest income11 2,641 380 33,610 36,642 
Reinsurance premiums earned— 44,250 — — 44,250 
Other income, net4,408 2,773 (1,510)1,092 6,763 
Salaries and benefits(161)(375)(593)— (1,129)
Reinsurance losses and underwriting expenses— (39,066)— — (39,066)
Other expenses(214)(2,100)(152)(4)(2,470)
Intersegment expenses, net(11)(198)(348)(108)(665)
Income (loss) before income taxes4,033 7,925 (2,223)34,590 44,325 
Income tax (expense) benefit(871)(1,902)525 (8,302)(10,550)
Net (income) loss attributable to noncontrolling interests(403)— 37 — (366)
Net income (loss)$2,759 6,023 (1,661)26,288 33,409 
(a)    The Company provides investment advisory services through Whitetail Rock Capital Management, LLC (WRCM), the Company's SEC-registered investment advisor subsidiary, under various arrangements. WRCM earned management and performance fees of $2.0 million and $1.4 million for the three months ended September 30, 2025 and 2024, respectively, and $5.0 million and $4.4 million for the nine months ended September 30, 2025 and 2024, respectively. Fees earned by WRCM are included in "other income, net" in the table above.
(b)    Represents primarily the operating results of the Company’s reinsurance treaties on property and casualty policies. The increase in reinsurance premiums and associated reinsurance losses and underwriting expenses in the three and nine months ended September 30, 2025 compared with the same periods in 2024 was primarily due to an increase in overall property volume and new business. Reinsurance losses and underwriting expenses also increased related to increased claims development in several commercial auto programs, which the Company has exited; however, adverse development of related expenses may continue to be recognized in future periods. Other operating expenses have also increased to support the growth of this business.
(c)    Represents the operating results of the Company’s real estate investments and the administrative costs to manage this portfolio. Included in "other income, net" in the table above are primarily the net gains/losses recognized related to the Company's proportionate share of certain real estate investments accounted for under the equity method, and realized gains from the sale of real estate investments.
(d)    Represents interest income earned on investment debt securities (primarily student loan and other asset-backed securities, including Nelnet-owned asset-backed securities which it has repurchased and are eliminated in consolidation), interest income on certain notes receivable, unrealized gains/losses on marketable equity securities, realized gains/losses on marketable equity securities and investment debt securities, and other costs to manage these investments. The activity also includes interest expense incurred on debt used to finance such investments. The increase in investment interest for the three months ended September 30, 2025 compared with the same period in 2024 was primarily due to an increase in the average balance of investment securities as a result of the Company repurchasing $377.6 million of its own debt during the third quarter of 2025. The decrease in investment interest income and interest expense for the nine months ended September 30, 2025 compared with the same period in 2024 was primarily due to a decrease in the average balance of investment securities and debt outstanding, respectively, and a decrease in interest rates earned on such investments. As of December 31, 2024, the majority of debt used to finance such investments had been repaid. See Item 3, "Quantitative and Qualitative Disclosures About Market Risk - Interest Rate and Market Risk - Investments," which provides additional detail on NFS's investment debt securities.
61


CORPORATE AND OTHER ACTIVITIES – RESULTS OF OPERATIONS
Other business activities and operating segments that are not reportable and not part of the NFS division are combined and included in Corporate and Other Activities (“Corporate”). The following table summarizes the operating results of these activities.
Income taxes are allocated based on 24% of income (loss) before taxes for each activity. The difference between the Corporate income tax expense and the sum of taxes calculated for each activity is included in income taxes in “other” in the table below.
Summary and Comparison of Operating Results
Shared services (a)Solar tax equity investments (b)Nelnet Renewable Energy (c)ALLO investment (d)Venture capital investments (e)OtherTotal
Three months ended September 30, 2025
Investment interest$— — — — — 3,134 3,134 
Interest expense— — (2)— — (690)(692)
Net interest income (expense)— — (2)— — 2,444 2,442 
Solar construction revenue— — 5,738 — — — 5,738 
Other income, net600 (8,766)— (161)33,824 2,839 28,336 
Cost to provide solar construction services— — (7,607)— — — (7,607)
Salaries and benefits(20,919)(402)(3,273)— (230)(1,369)(26,193)
Depreciation and amortization(2,493)— (212)— — (38)(2,743)
Other expenses(13,902)(502)(171)1,298 (28)(4,596)(17,901)
Intersegment expenses, net26,805 (66)(404)— (46)(548)25,741 
Impairment expense— (5,761)(94)— — — (5,855)
(Loss) income before income taxes(9,909)(15,497)(6,025)1,137 33,520 (1,268)1,958 
Income tax benefit (expense)2,378 2,203 1,446 (273)(8,045)(1,256)(3,547)
Net loss attributable to noncontrolling interests— 6,317 — — — — 6,317 
Net (loss) income$(7,531)(6,977)(4,579)864 25,475 (2,524)4,728 
Three months ended September 30, 2024
Investment interest$— 1 1 — — 3,103 3,105 
Interest expense— — (103)— — (601)(704)
Net interest income (expense)— 1 (102)— — 2,502 2,401 
Solar construction revenue— — 19,321 — — — 19,321 
Other income, net714 (7,640)43 4,503 2,478 3,408 3,506 
Cost to provide solar construction services— — (26,815)— — — (26,815)
Salaries and benefits(19,411)(621)(1,375)— (187)(2,258)(23,852)
Depreciation and amortization(5,463)— (284)— (8)(93)(5,848)
Other expenses(11,761)(205)(535)2,104 (26)(693)(11,116)
Intersegment expenses, net25,634 (44)(378)(1)(21)(110)25,080 
Impairment expense— — — — (100)— (100)
(Loss) income before income taxes(10,287)(8,509)(10,125)6,606 2,136 2,756 (17,423)
Income tax benefit (expense)2,469 988 2,430 (1,585)(513)126 3,915 
Net loss attributable to noncontrolling interests— 4,392 — — — — 4,392 
Net (loss) income$(7,818)(3,129)(7,695)5,021 1,623 2,882 (9,116)
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Shared services (a)Solar tax equity investments (b)Nelnet Renewable Energy (c)ALLO investment (d)Venture capital investments (e)OtherTotal
Nine months ended September 30, 2025
Investment interest$— 6 — — — 8,101 8,107 
Interest expense— — (5)— — (1,971)(1,976)
Net interest income (expense)— 6 (5)— — 6,130 6,131 
Solar construction revenue— — 10,992 — — — 10,992 
Other income, net1,817 (8,264)— 13,555 40,077 8,991 56,176 
Gain on partial redemption of ALLO investment— — — 175,044 — — 175,044 
Cost to provide solar construction services— — (29,485)— — — (29,485)
Salaries and benefits(58,239)(1,163)(6,767)— (665)(4,638)(71,472)
Depreciation and amortization(8,678)— (729)— (1)(114)(9,522)
Other expenses(41,487)(804)(999)6,190 (59)(8,024)(45,183)
Intersegment expenses, net78,037 (198)(1,212)— (132)(1,082)75,413 
Impairment expense(3,269)(5,761)(1,996)— (140)— (11,166)
(Loss) income before income taxes(31,819)(16,184)(30,201)194,789 39,080 1,263 156,928 
Income tax benefit (expense)7,637 1,058 7,248 (46,749)(9,379)(2,760)(42,945)
Net loss attributable to noncontrolling interests— 11,777 — — — — 11,777 
Net (loss) income$(24,182)(3,349)(22,953)148,040 29,701 (1,497)125,760 
Nine months ended September 30, 2024
Investment interest$— 2 32 — — 9,532 9,566 
Interest expense— — (811)— — (1,303)(2,114)
Net interest income (expense)— 2 (779)— — 8,229 7,452 
Solar construction revenue— — 42,741 — — — 42,741 
Other income, net2,170 (6,398)136 459 5,780 9,583 11,730 
Cost to provide solar construction services— — (49,115)— — — (49,115)
Salaries and benefits(58,654)(1,905)(6,006)— (663)(4,931)(72,159)
Depreciation and amortization(20,191)— (823)— (21)(277)(21,312)
Other expenses(32,093)(573)(1,763)1,498 (52)(4,376)(37,359)
Intersegment expenses, net79,379 99 (1,439)(4)(59)(247)77,729 
Impairment expense— — (1,865)— (137)— (2,002)
(Loss) income before income taxes(29,389)(8,775)(18,913)1,953 4,848 7,981 (42,295)
Income tax benefit (expense)7,053 424 4,142 (469)(1,164)(1,560)8,426 
Net loss attributable to noncontrolling interests— 7,009 1,654 — — — 8,663 
Net (loss) income$(22,336)(1,342)(13,117)1,484 3,684 6,421 (25,206)
(a)    Includes corporate activities related to internal audit, human resources, accounting, legal, enterprise risk management, information technology, occupancy, and marketing. These costs are allocated to each operating segment based on estimated use of such activities and services. The amount allocated to operating segments is reflected as “intersegment expenses, net” in the table above. Also includes corporate costs and overhead functions not allocated to operating segments, including executive management, investments in innovation, and other holding company organizational costs.
(b)    Includes operating results of the Company's tax equity investments in renewable energy solar partnerships. The Company accounts for these investments using the HLBV method of accounting, which commonly results in accelerated losses in the initial years of the investment and gains recognized at the end of the contractual agreement (typically five years). In the periods presented, the Company recognized net HLBV losses. These losses are also offset by revenue earned by the Company related to management, consulting, and performance fees provided on tax equity investments syndicated to third parties. Due to the recognition pattern (accelerated losses in initial years and gains upon sale at the end of the contractual agreement), these investments may create volatility in earnings. During the third quarter of 2025, the Company recognized a non-cash impairment charge of $5.8 million related to its ownership in a solar development project. For additional information on the results of this operating segment, see note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
(c)    Nelnet Renewable Energy (NRE) is the Company’s solar construction business that provides full-service engineering, procurement, and construction (EPC) services to commercial entities. The Company entered this business from its acquisition of 80% of GRNE Solar in June 2022. On June 30, 2024, the Company acquired the remaining 20% of GRNE Solar for $0.3 million.
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Since the acquisition of GRNE Solar, NRE has incurred low and, in many cases, negative margins on legacy projects. The Company has a handful of remaining legacy construction contracts it is obligated to complete, down from over 30 at the beginning of 2024. NRE continues to recognize loss reserves that represent NRE's estimate of costs it will incur to complete the remaining legacy contracts. The loss reserve expense is included in "cost to provide solar construction services" in the table above. In addition, uncertain economic conditions and legislation activity have impacted new construction projects being initiated which has adversely impacted and will continue to adversely impact revenue. See Part II, Item 1A "Risk Factors" of this report for additional information on the adverse impacts on NRE's business related to the enactment of the One Big Beautiful Bill.
(d)    Represents primarily the Company's share of loss on its voting membership interest and income on its preferred membership interests in ALLO. For additional information on the results of these investments, see note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
On June 4, 2025, the Company redeemed a portion of its voting membership interests in ALLO and all its outstanding preferred membership interests, including the preferred return accrued on such membership interests through June 3, 2025, and recognized a pre-tax gain of $175.0 million as a result of this transaction. See note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.
(e)    Represents the operating results of the Company’s venture capital investments, including Hudl which the Company accounts for using the measurement alternative method, and the administrative costs to manage this portfolio. These investments may create volatility in earnings from recognizing results of certain equity method investees, periodic adjustment of certain fund investments to their respective fair value, and, when applicable, observable price changes on certain measurement alternative investments. For instance, during the third quarter 2025, the Company recognized a realized gain of $7.8 million as a result of redeeming a portion of its investment in an unaffiliated third-party technology company (the "Investee"), and an unrealized gain of $22.4 million to adjust its carrying value of its remaining investment in the Investee to the transaction value. For additional information, see note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.

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LIQUIDITY AND CAPITAL RESOURCES
The Company’s Loan Servicing and Systems, and Education Technology Services and Payments operating segments are non-capital intensive and both produce positive operating cash flows. As such, a minimal amount of debt and equity capital is allocated to these segments and any liquidity or capital needs are satisfied using cash flow from operations.
Therefore, the Liquidity and Capital Resources discussion is concentrated on the Company’s liquidity and capital needs to meet existing debt obligations in the Nelnet Financial Services division, which includes the Asset Generation and Management and Nelnet Bank reportable operating segments, and the Company's other initiatives to pursue additional strategic investments. On July 4, 2025, the One Big Beautiful Bill (the "Bill") was enacted into law. Among other substantial changes to the tax code, the Bill makes numerous changes to the federal student loan program. Graduate students and parents of undergraduates will be subject to new caps on federal lending. Overall, we expect these changes will boost privatization of student lending and may create opportunities for the Company to expand its private education loan originations and acquisitions.
Sources of Liquidity
As of September 30, 2025, the Company's sources of liquidity included:
Cash and cash equivalents$216,425 
Less: Cash and cash equivalents held at Nelnet Bank (a)(13,993)
Net cash and cash equivalents202,432 
Available-for-sale (AFS) debt securities (investments) - at fair value1,282,067 
Less: AFS debt securities held at Nelnet Bank - at fair value (a)(788,274)
AFS private education and consumer loan debt securities - held as risk retention - at fair value (b)(200,652)
Restricted investments (c)(125,985)
Unencumbered AFS debt securities (investments) - at fair value167,156 
Unencumbered federally insured, private, consumer, and other loans (Non-Nelnet Bank) - at par291,938 
Unencumbered repurchased Nelnet issued asset-backed debt securities - at par (not included on consolidated financial statements) (d)499,524 
Unused capacity on unsecured line of credit (e)495,000 
Sources of liquidity as of September 30, 2025
$1,656,050 
(a)    Cash and investments held at Nelnet Bank are generally not available for Company activities outside of Nelnet Bank.
(b)    The Company is sponsor for certain private education and consumer loan securitizations and as sponsor, is required to provide a certain level of risk retention. To satisfy this requirement, the Company has purchased bonds issued in the securitizations. The majority of the purchased bonds reflected in the table above relate to private education loan securitizations. For these securitizations, the Company is required to retain these bonds until the latest of (i) the date the aggregate outstanding principal balance of the loans in the securitization is 33% or less of the initial loan balance, and (ii) the date the aggregate outstanding principal balance of the bonds is 33% or less of the aggregate initial outstanding principal balance of the bonds, at which time the Company can sell these bonds to a third party. The Company estimates these bonds will be restricted from trading until approximately the first half of 2027.
(c)    The Company is required to hold collateral in third-party trusts related to its reinsurance business.
(d)    The Company has repurchased certain of its own asset-backed securities (bonds and notes payable) in the secondary market. For accounting purposes, these notes are eliminated in consolidation and are not included in the Company's consolidated financial statements. However, these securities remain legally outstanding at the trust level and the Company could sell these notes to third parties, redeem the notes at par as cash is generated by the trust estate, or pledge the securities as collateral on repurchase agreements. Upon a sale of these notes to third parties, the Company would obtain cash proceeds equal to the market value of the notes on the date of such sale.
(e)    The Company has a $495.0 million unsecured line of credit that matures on September 22, 2026. As of September 30, 2025, there was no amount outstanding on the unsecured line of credit and $495.0 million was available for future use.
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The Company intends to use its liquidity position to capitalize on market opportunities, including FFELP, private education, consumer, and other loan acquisitions (or investment interests therein); strategic acquisitions and investments; and capital management initiatives, including stock repurchases, debt repurchases, and dividend distributions. The timing and size of these opportunities will vary and will have a direct impact on the Company's cash and investment balances.
On October 23, 2025, the Company announced that it entered into a definitive and binding purchase agreement to purchase a Canadian student loan servicing business for a purchase price of approximately $93 million in cash. The transaction is expected to close in the first calendar quarter of 2026, subject to customary closing conditions. See note 17 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information about this acquisition.
Partial Redemption of ALLO Investment
Nelnet had both voting and preferred membership interest investments in ALLO. On June 4, 2025, Nelnet redeemed a portion of its voting membership interests in ALLO and all its outstanding preferred membership interests, including the preferred return accrued on such membership interests through June 3, 2025. The Company received cash proceeds of $410.9 million from ALLO and recognized a pre-tax gain of $175.0 million as a result of this transaction. See note 2 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information about this transaction. The majority of the proceeds from this transaction were used by the Company to pay down third-party debt that was used to fund loan assets and repurchase certain of the Company's own asset-backed securities (bonds and notes payable) in the secondary market. During the three months ended September 30, 2025, the Company repurchased $377.6 million (par value) of its own debt.
Cash Flows
The Company has historically generated positive cash flow from operations. During the nine months ended September 30, 2025 and 2024, the Company generated $285.4 million and $482.4 million, respectively, in cash from operating activities. The decrease in 2025 compared with 2024 was due to:
•Adjustments to net income for certain non-cash items, including the gain recognized on the partial redemption of the Company's ALLO investment, deferred income tax benefit, loan discount and deferred lender fees accretion, depreciation and amortization, and gain/loss on investments; and
•The impact of changes to accrued interest receivable and accounts receivable during the nine months ended September 30, 2025 compared with the same period in 2024.
These factors were partially offset by:
•An increase in net income; and
•The impact of changes to other liabilities during the nine months ended September 30, 2025 compared with the same period in 2024.
The primary items included in the statement of cash flows for investing activities are the purchase, origination, repayment, and sale of loans, the purchase and sale of available-for-sale securities, and the purchase and sale of other investments. During June 2025, the Company received cash proceeds of $410.9 million from the redemption of its membership interests in ALLO. The proceeds from the ALLO redemption are included in investing activities on the statement of cash flows. The primary items included in financing activities are the payments on and proceeds from bonds and notes payable, the change in deposits at Nelnet Bank used to fund loans and investment activity at Nelnet Bank, issuance of noncontrolling interests, and repurchases of common stock. Cash provided by investing activities and used in financing activities for the nine months ended September 30, 2025 was $519.0 million and $968.9 million, respectively. Cash provided by investing activities and used in financing activities for the nine months ended September 30, 2024 was $2.08 billion and $2.69 billion, respectively. Investing and financing activities are further addressed in the discussion that follows.

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Liquidity Needs and Sources of Liquidity Available to Satisfy Debt Obligations Secured by Loan Assets and Related Collateral - AGM Operating Segment
The following table shows AGM's debt obligations outstanding that are secured by loan assets and related collateral:
 As of September 30, 2025
Carrying amount
Final maturity
Bonds and notes issued in asset-backed securitizations$6,703,249 8/26/30 - 9/25/69
FFELP and consumer loan warehouse and other facilities1,160,959 1/29/27 - 2/29/28
 $7,864,208  
Bonds and Notes Issued in Asset-backed Securitizations
The majority of AGM’s portfolio of student loans is funded in asset-backed securitizations that are structured to substantially match the maturity of the funded assets, thereby minimizing liquidity risk. Cash generated from student loans funded in asset-backed securitizations provides the source of liquidity to satisfy all obligations related to the outstanding bonds and notes issued in such securitizations. In addition, due to (i) the difference between the yield AGM receives on the loans and cost of financing within these transactions, and (ii) the servicing and administration fees that AGM earns from these transactions, AGM has created a portfolio that the Company expects to generate earnings and significant cash flow over the life of these transactions.
As of September 30, 2025, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, AGM expects future undiscounted cash flows from its portfolio to be approximately $1.04 billion as detailed below. The actual timing of cash flows released from the securitizations could be impacted based on when and if the Company terminates a securitization by exercising clean-up calls on the underlying securities when the assets in such securitization reach a certain threshold.
The forecasted cash flow presented below includes loans funded in asset-backed securitizations as of September 30, 2025, the majority of which are federally insured student loans. As of September 30, 2025, AGM had $7.4 billion of loans included in asset-backed securitizations, which represented 84.0% of its total loan portfolio. The forecasted cash flow does not include cash flows that the Company expects to receive in relation to loans funded in its warehouse facilities, unencumbered federally insured, private education, consumer, and other loans funded with operating cash, its ownership of beneficial interest in loan securitizations (such beneficial interest investments are classified as "other investments and notes receivable, net" on the Company's consolidated balance sheets), loans acquired subsequent to September 30, 2025, and loans owned by Nelnet Bank.
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Asset-backed Securitization Cash Flow Forecast
$1.04 billion
(dollars in millions)
abscfforecast2025q3.jpg
The forecasted future undiscounted cash flows of approximately $1.04 billion include approximately $0.74 billion (as of September 30, 2025) of overcollateralization included in the asset-backed securitizations. These excess net asset positions are included in the consolidated balance sheets in the balances of "loans and accrued interest receivable, net" and "restricted cash." The difference between the total estimated future undiscounted cash flows and the overcollateralization of approximately $0.30 billion, or approximately $0.23 billion after income taxes based on the estimated effective tax rate, represents estimated future net interest income (earnings) from the portfolio and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the September 30, 2025 balance.
The Company uses various assumptions, including prepayments and future interest rates, when preparing its cash flow forecast. These assumptions are further discussed below.
Prepayments: The primary variables in establishing a life of loan estimate are the level and timing of prepayments. Prepayment rates equal the amount of loans that prepay annually as a percentage of the beginning-of-period balance, net of scheduled principal payments. A number of factors can affect estimated prepayment rates, including the level of consolidation activity, borrower default rates, and utilization of debt management options such as income-based repayment, deferments, and forbearance. Should any of these factors change, management may revise its assumptions, which in turn would impact the projected future cash flow. The Company’s cash flow forecast above assumes prepayment rates of 6% for both federally insured consolidation and Stafford loans. Prepayment rates for private education loans range from 11% to 20%.
Beginning in late 2021, the Company experienced accelerated run-off (prepayments) of its FFELP portfolio due to FFELP borrowers consolidating their loans into Federal Direct Loan Program loans to qualify for loan forgiveness under various initiatives and programs offered by the federal government and the Department. However, the Company has experienced a significant decrease in FFELP borrowers consolidating their loans into the Federal Direct Loan Program since August 2024, which has resulted in prepayment rates on the Company’s FFELP portfolio being more consistent with longer-term historical rates.
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The following table summarizes the estimated impact to the above forecasted cash flows if prepayments were greater than the prepayment rate assumptions used to calculate the forecasted cash flows:
Increase in prepayment rate
Reduction in forecasted cash flow from table above
Forecasted cash flow using increased prepayment rate
2x
$0.07 billion
$0.97 billion
4x$0.20 billion
$0.84 billion
If the entire AGM student loan portfolio was prepaid, the Company would receive the full amount of overcollateralization included in the asset-backed securitizations of approximately $0.74 billion (as of September 30, 2025); however, the Company would not receive the $0.30 billion ($0.23 billion after tax) of estimated future earnings from the portfolio.
Interest rates: The Company funds a portion of its student loans with floating rate securities that are indexed to 90-day SOFR. Meanwhile, the interest earned on the Company’s student loan assets is indexed primarily to the 30-day average SOFR in effect for each day in a calendar quarter. The different interest rate characteristics of the Company’s loan assets and liabilities funding these assets result in basis risk. The Company’s cash flow forecast assumes, for the life of the portfolio, a relationship between the various SOFR indices that is implied by the current forward SOFR curves. If the forecast is computed assuming a spread of an additional 12 basis points between 3-month Term SOFR and 30-day average SOFR for the life of the portfolio, the cash flow forecast would be reduced by approximately $5 million to $15 million.
The Company uses the current forward interest rate yield curve to forecast cash flows. A change in the forward interest rate curve would impact the future cash flows generated from the portfolio. See Item 3, "Quantitative and Qualitative Disclosures About Market Risk — Interest Rate Risk — AGM Operating Segment" for additional information about various interest rate risks which may impact future cash flows from AGM's loan assets.
Warehouse and Other Facilities
Warehousing allows the Company to buy and manage loans prior to transferring them into more permanent financing arrangements. For a summary of the Company's warehouse and other facilities outstanding as of September 30, 2025, see note 4 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
Upon termination or expiration of the warehouse and other secured facilities, the Company would expect to access the securitization market, obtain replacement facilities, use operating cash, consider the sale of assets, or transfer collateral to satisfy any remaining obligations.
Asset-backed Securities Transactions
The Company, through its subsidiaries, has historically funded loans by completing asset-backed securitizations. Depending on market conditions, the Company anticipates continuing to access the asset-backed securitization market. Such asset-backed securitization transactions would be used to refinance loans included in its warehouse facilities and existing asset-backed securitizations and/or finance loans purchased from third parties and loans that are currently unencumbered.
There were no asset-backed securitization transactions completed during the nine months ended September 30, 2025.
Other Uses of Liquidity
Subsequent to the Reconciliation Act of 2010, the Company no longer originates FFELP loans but continues to acquire FFELP loan portfolios from third parties and believes additional loan purchase opportunities exist, including opportunities to purchase private education, consumer, and other loans (or investment interests therein).
The Company plans to fund additional loan acquisitions and related investments using current cash; cash provided by operating activities; proceeds from the sale of certain investments; its unsecured line of credit, its Union Bank student loan participation agreement, and its Union Bank student loan asset-backed securities participation agreement (each as described below), and/or establishing similar secured and unsecured borrowing facilities; using its existing warehouse facilities (as described above); increasing the capacity under existing and/or establishing new warehouse facilities; and continuing to access the asset-backed securities market.
Union Bank Participation Agreements
The Company maintains an agreement with Union Bank, a related party, as trustee for various grantor trusts, under which Union Bank has agreed to purchase from the Company participation interests in student loans. As of September 30, 2025, $721.7 million of loans were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.
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The agreement automatically renews annually and is terminable by either party upon five business days' notice. This agreement provides beneficiaries of Union Bank’s grantor trusts with access to investments in interests in student loans, while providing liquidity to the Company. The Company can sell participation interests in loans to Union Bank to the extent of availability under the grantor trusts, up to $900.0 million or an amount in excess of $900.0 million if mutually agreed to by both parties. Loans participated under this agreement have been accounted for by the Company as loan sales. Accordingly, the participation interests sold are not included on the Company’s consolidated balance sheets.
The Company also has an agreement with Union Bank under which Union Bank has agreed to purchase from the Company participation interests in FFELP loan asset-backed securities (bond investments). The agreement automatically renews annually and is terminable by either party upon five business days' notice. The Company can participate FFELP loan asset-backed securities to Union Bank to the extent of availability under the grantor trusts, up to $400.0 million or an amount in excess of $400.0 million if mutually agreed to by both parties. The Company maintains legal ownership of the FFELP loan asset-backed securities and, in its discretion, approves and accomplishes any sale, assignment, transfer, encumbrance, or other disposition of the securities. As such, the FFELP loan asset-backed securities subject to this agreement are included on the Company's consolidated balance sheets as "investments at fair value" and the participation interests outstanding have been accounted for by the Company as a secured borrowing. As of September 30, 2025, $0.1 million (par value) of FFELP loan asset-backed securities were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement.
Liquidity Impact Related to Beneficial Interest in Loan Securitizations
The Company has partial ownership in consumer, private education, and federally insured student loan third-party securitizations that are classified as "beneficial interest in loan securitizations" and included in "other investments and notes receivable, net" on the Company's consolidated balance sheets. These residual interests were acquired by the Company or have been received by the Company as consideration from selling portfolios of loans to unrelated third parties who securitized such loans. As of the latest remittance reports filed by the various trusts prior to or as of September 30, 2025, the Company's ownership correlates to approximately $1.75 billion of loans included in these securitizations. Investment interest income earned by the Company from the beneficial interest in loan securitizations is included in "investment interest" on the Company's consolidated statements of income and is not a component of the Company's loan interest income.
As of September 30, 2025, the investment balance on the Company's consolidated balance sheet of its beneficial interest in loan securitizations was $201.8 million. For a summary of this investment balance, see note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report.
The Company's partial ownership percentage in each loan securitization grants the Company the right to receive the corresponding percentage of cash flows generated by the securitization. As of September 30, 2025, based on cash flow models developed to reflect management’s current estimate of, among other factors, prepayments, defaults, deferment, forbearance, and interest rates, the Company currently expects future undiscounted cash flows from its partial ownership in these securitizations to be approximately $291.7 million. The vast majority of these cash flows are expected to be received over the next 5 years.
The difference between the total estimated future undiscounted cash flows from these residual interests ($291.7 million) and the investment carrying value ($201.8 million) of $89.9 million, or $68.3 million after income taxes based on the estimated effective tax rate, represents estimated future investment interest income (earnings) from these investments and is expected to be accretive to the Company's balance of consolidated shareholders' equity from the September 30, 2025 balance.
The undiscounted future cash flows from the consumer and private education loan securitizations are highly subject to credit risk (defaults). If defaults are higher than management's current estimate, the forecasted cash flows and estimated future investment interest income (earnings) from these securitizations would be adversely impacted.
Sources and Needs of Liquidity - Nelnet Bank
Sources of Liquidity
Nelnet Bank launched operations in November 2020. Nelnet Bank was funded by the Company with an initial capital contribution of $100 million and the Company made a pledged deposit of $40.0 million with Nelnet Bank, as required under an agreement with the FDIC as discussed below. The Company has contributed an additional $126 million to Nelnet Bank since its inception (which includes cash, investments, loans, and equity in a student loan trust). Based on Nelnet Bank's business plan for growth and current financial condition, the Company believes it will make additional capital contributions to the bank in future periods. Nelnet Bank also has unsecured Federal Funds lines of credit with correspondent banks and has established accounts at the Federal Reserve Bank and the Federal Home Loan Bank.
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The growth of Nelnet Bank is primarily driven by its ability to achieve loan growth goals while sustaining credit quality and maintaining cost-efficient funding sources to support its loan growth.
Deposits
Nelnet Bank utilizes brokered, retail, and other deposits to meet its funding needs and enhance its liquidity position. The deposits can be term or liquid deposits. The term deposits have terms from three months to ten years. Retail, commercial, and institutional deposits are sourced through a direct banking platform and a deposit marketplace and provide diversified funding sources. Brokered deposits are sourced through a network of brokers and provide a stable source of funding. In addition, Nelnet Bank accepts certain deposits considered non-brokered that are held in large accounts structured to allow FDIC insurance to flow through to underlying individual depositors. The deposits are diversified with deposits from Educational 529 College Savings and Health Savings plans, STFIT, and FDIC sweep deposits.
Regulatory Capital
Prior to Nelnet Bank’s launch of operations, Nelnet Bank, Nelnet, Inc. (the parent), and Michael S. Dunlap (Nelnet, Inc.’s controlling shareholder) entered into a Capital and Liquidity Maintenance Agreement and a Parent Company Agreement with the FDIC in connection with Nelnet, Inc.’s role as a source of financial strength for Nelnet Bank. As part of the Capital and Liquidity Maintenance Agreement, Nelnet, Inc. is obligated to (i) contribute capital to Nelnet Bank for it to maintain capital levels that meet FDIC requirements for a “well capitalized” bank, including a leverage ratio of capital to total assets of at least 12%; (ii) provide and maintain an irrevocable asset liquidity takeout commitment for the benefit of Nelnet Bank in an amount equal to the greater of either 10% of Nelnet Bank’s total assets or such additional amount as agreed to by Nelnet Bank and Nelnet, Inc.; (iii) provide additional liquidity to Nelnet Bank in such amount and duration as may be necessary for Nelnet Bank to meet its ongoing liquidity obligations; and (iv) establish and maintain a pledged deposit of $40.0 million with Nelnet Bank. As of September 30, 2025, Nelnet Bank's leverage ratio of capital to total assets was 12.7%.
Liquidity Impact Related to Solar Tax Equity Investments
The Company makes solar tax equity investments in renewable energy solar partnerships that support the development and operations of solar projects. As of September 30, 2025, the Company has funded a total of $306.1 million in tax equity investments which remain outstanding for itself and $307.5 million on behalf of its syndication partners, for a funded total of $613.6 million. These investments provide a federal income tax credit under the Internal Revenue Code, currently equaling 30% to 70% of the eligible project cost, with the tax credit available when the project is placed in service. The Company is then allowed to reduce its tax estimates paid to the U.S. Treasury based on the credits earned. In addition to the credits, the Company structures the investments to receive quarterly distributions of cash from the operating earnings of the solar project for a period of at least five years after the project is placed in service. After that period, the contractual agreements typically provide for the Company’s entire interest in the projects to be sold at the fair market value of the discounted forecasted future cash flows allocable to the Company. Based on the timing of when the Company funds a project and decreases its tax estimate to the U.S. Treasury due to earning of the tax credit, the net amount of capital funded to solar tax equity investments at any point in time is not significant and has a minimal impact on the Company’s liquidity. As of September 30, 2025, the Company is committed to fund an additional $86.7 million directly in solar tax equity investments and $115.9 million will be funded by its syndication partners, for a total commitment of $202.6 million.
In periods in which the Company makes significant investments in solar tax equity investments, operating results are negatively impacted due to the accelerated losses recognized in the initial years of investment. However, given the timing and amount of cash flows expected to be generated over the life of these investments, the Company considers these investments a good use of capital. Through September 30, 2025, the Company has recognized cumulative pre-tax losses (excluding noncontrolling interests) of approximately $70 million on its tax equity investments currently outstanding. The Company expects its current investments (assuming no additional investments are made subsequent to September 30, 2025) to generate approximately $110 million of pre-tax earnings (excluding noncontrolling interests) over the life of the investments. Accordingly, the Company expects to recognize approximately $180 million in pre-tax income (excluding noncontrolling interests) on such investments between October 1, 2025 and June 30, 2031 (the remaining years of its current investments).
Liquidity Impact Related to Hedging Activities
The Company utilizes derivative instruments to manage interest rate sensitivity. By using derivative instruments, the Company is exposed to market risk which could impact its liquidity.
All Non-Nelnet Bank over-the-counter derivative contracts executed by the Company are cleared post-execution at a regulated clearinghouse. Clearing is a process by which a third party, the clearinghouse, steps in between the original counterparties and guarantees the performance of both, by requiring that each post liquid collateral on an initial (initial margin) and mark-to-
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market (variation margin) basis to cover the clearinghouse’s potential future exposure in the event of default. Nelnet Bank derivative contracts have protection against counterparty risk provided by International Swaps and Derivatives Association, Inc. agreements. The agreements require collateral to be exchanged based on the net fair value of derivatives with each counterparty. The Company’s exposure related to the Nelnet Bank derivatives is limited to the value of the derivative contracts in a gain position, less any collateral held by us.
Based on the derivative portfolio outstanding as of September 30, 2025, the Company does not anticipate any movement in interest rates having a material impact on its capital or liquidity profile, nor does the Company expect that any movement in interest rates would have a material impact on its ability to make variation margin payments to its third-party clearinghouse and/or payments to its counterparties for its non-centrally cleared derivatives.
Unsecured Line of Credit
As discussed above, the Company has a $495.0 million unsecured line of credit with a maturity date of September 22, 2026. As of September 30, 2025, the unsecured line of credit had no amount outstanding and $495.0 million was available for future use. Upon the maturity date of this facility, there can be no assurance that the Company will be able to maintain this line of credit, increase or maintain the amount outstanding under the line, or find alternative funding if necessary.
Stock Repurchases
In 2022, the Board of Directors authorized a stock repurchase program to repurchase up to a total of five million shares of the Company's Class A common stock during the three-year period ended May 8, 2025. On May 8, 2025, the Company announced that its Board of Directors authorized a new stock repurchase program to repurchase up to a total of five million shares of the Company's Class A common stock during the three-year period ending May 8, 2028. The five million shares authorized under the new program include the remaining unpurchased shares from the prior program, which the new program replaced. As of September 30, 2025, 4,610,575 shares remained authorized for repurchase under the Company's stock repurchase program. Shares may be repurchased from time to time on the open market, in private transactions (including with related parties), or otherwise, depending on various factors, including share prices and other potential uses of liquidity.
Shares repurchased by the Company during the first three quarters of 2025 are shown below. Certain of these repurchases were made pursuant to trading plans adopted by the Company in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934. For additional information on stock repurchases during the third quarter of 2025, see "Stock Repurchases" under Part II, Item 2 of this report.
Total shares repurchasedPurchase price (in thousands)Average price of shares repurchased (per share) (a)
Quarter ended March 31, 202538,491 $4,458 115.81 
Quarter ended June 30, 2025183,554 21,360 116.37 
Quarter ended September 30, 2025217,850 27,273 125.19 
Total439,895 $53,091 120.69 
(a) The average price of shares repurchased for each period presented includes excise taxes.
On August 25, 2025, the Company repurchased, in a privately negotiated transaction under the Company’s existing stock repurchase program, a total of 41,929 shares of the Company’s Class A common stock from a certain significant shareholder. The shares were repurchased at a discount to the closing market price of the Company’s Class A common stock as of August 21, 2025, and the transaction was separately approved by the Company’s Board of Directors and its Nominating and Corporate Governance Committee.
Dividends
On September 16, 2025, the Company paid a third quarter 2025 cash dividend on the Company's Class A and Class B common stock of $0.30 per share. In addition, the Company's Board of Directors has declared a fourth quarter 2025 cash dividend on the Company's outstanding shares of Class A and Class B common stock of $0.33 per share. The fourth quarter cash dividend will be paid on December 15, 2025 to shareholders of record at the close of business on December 1, 2025.
The Company plans to continue making regular quarterly dividend payments, subject to future earnings, capital requirements, financial condition, and other factors.
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CRITICAL ACCOUNTING ESTIMATES
This Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of income and expenses during the reporting periods. The Company bases its estimates and judgments on historical experience and on various other factors that the Company believes are reasonable under the circumstances. Actual results may differ from these estimates under varying assumptions or conditions. Note 2 of the notes to consolidated financial statements included in the Company’s 2024 Annual Report includes a summary of the significant accounting policies and methods used in the preparation of the consolidated financial statements.
On an on-going basis, management evaluates its estimates and judgments, particularly as they relate to accounting policies that management believes are most “critical” — that is, they are most important to the portrayal of the Company’s financial condition and results of operations and they require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Management has identified the allowance for loan losses as a critical accounting policy and estimate, as discussed further under Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates – Allowance for Loan Losses” in the Company’s 2024 Annual Report. For additional information regarding changes in the Company’s allowance for loan losses for the three and nine months ended September 30, 2025 and 2024, see the caption “Activity in the Allowance for Loan Losses” in note 3 of the notes to consolidated financial statements included under Part I, Item 1 of this report. There have been no material changes to the Company’s critical accounting policy and estimate since December 31, 2024.
RECENT ACCOUNTING PRONOUNCEMENTS
In December 2023, the FASB issued accounting guidance to address investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance will be effective for the Company for the year ending December 31, 2025 annual financial statements, with early adoption permitted. The Company intends to adopt the standard when it becomes effective for the year ending December 31, 2025 and apply the standard on a retrospective basis. Management is currently evaluating the impact this guidance will have on the disclosures included in the notes to the consolidated financial statements. Based upon this review, the Company has not yet identified nor does it anticipate a material impact to its financial statement disclosures. Presentation changes include new disclosures for the tax rate in percentages and dollars, pre-defined breakouts, and cash payments to the Company's most significant jurisdictions.
In November 2024, the FASB issued accounting guidance to increase disclosure requirements primarily through enhanced disclosures about types of expenses (including employee compensation, depreciation, and amortization) in commonly presented expense captions. This guidance will be effective for the Company for fiscal years beginning after December 15, 2026. The guidance is required to be applied prospectively with the option for retrospective application. Management is currently evaluating the impact this guidance will have on the disclosures included in the notes to the consolidated financial statements.
There are no other recently issued, but not yet adopted, accounting pronouncements which are expected to have a material impact on the Company's consolidated financial statements and related disclosures.
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
(All dollars are in thousands, except share amounts, unless otherwise noted)
The Company’s consolidated balance sheets include assets and liabilities whose fair values are subject to market risks, primarily interest rate risk. The following sections address the interest rate risk associated with our relevant business activities.
Interest Rate Risk - AGM Operating Segment
AGM’s primary market risk exposure arises from fluctuations in its lending and borrowing rates, the spread between which could impact AGM due to shifts in market interest rates.
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The following table sets forth AGM’s loan assets and debt instruments by rate characteristics:
 As of September 30, 2025As of December 31, 2024
 DollarsPercentDollarsPercent
Fixed-rate loan assets$1,357,527 15.3 %$814,843 9.1 %
Variable-rate loan assets7,491,206 84.7 8,141,025 90.9 
Total$8,848,733 100.0 %$8,955,868 100.0 %
Fixed-rate debt instruments$345,350 4.4 %$399,994 4.8 %
Variable-rate debt instruments7,520,406 95.6 7,958,357 95.2 
Total$7,865,756 100.0 %$8,358,351 100.0 %
FFELP loans originated prior to April 1, 2006 generally earn interest at the higher of the borrower rate, which is fixed over a period of time, or a floating rate based on the special allowance payment (SAP) formula set by the Department. The SAP rate is based on an applicable index plus a fixed spread that depends on loan type, origination date, and repayment status. The Company generally finances its FFELP student loan portfolio with variable-rate debt. In low and/or declining interest rate environments, when the fixed borrower rate is higher than the SAP rate, the Company’s FFELP student loans earn at a fixed rate while the interest on the variable-rate debt typically continues to reflect the low and/or declining interest rates. In these interest rate environments, the Company may earn additional spread income that it refers to as floor income.
Depending on the type of loan and when it was originated, the borrower rate is either fixed to term or is reset to an annual rate each July 1. As a result, for loans where the borrower rate is fixed to term, the Company may earn floor income for an extended period of time, which the Company refers to as fixed-rate floor income, and for those loans where the borrower rate is reset annually on July 1, the Company may earn floor income to the next reset date, which the Company refers to as variable-rate floor income. All FFELP loans first originated on or after April 1, 2006 effectively earn at the SAP rate, since lenders are required to rebate fixed-rate floor income and variable-rate floor income for those loans to the Department.
The Company earned no variable-rate floor income in 2025 or 2024.
The following table shows AGM’s federally insured student loan assets that were earning fixed-rate floor income as of September 30, 2025:
Fixed interest rate rangeBorrower/lender weighted average yieldEstimated variable conversion rate (a)Loan balance
7.0 - 7.49%7.30%4.66%$21,361 
7.5 - 7.99%7.72%5.08%85,343 
8.0 - 8.99%8.18%5.54%209,763 
> 9.0%
9.06%6.42%84,471 
$400,938 
(a) The estimated variable conversion rate is the estimated short-term interest rate at which loans would convert to a variable rate. As of September 30, 2025, the weighted average estimated variable conversion rate was 5.58% and the short-term interest rate was 454 basis points.
Absent the use of derivative instruments, a rise in interest rates will reduce the amount of floor income received and has an impact on earnings due to interest margin compression caused by increasing financing costs, until such time as the federally insured loans earn interest at a variable rate in accordance with their SAP formulas. In higher interest rate environments, where the interest rate rises above the borrower rate and fixed-rate loans effectively become variable-rate loans, the impact of the rate fluctuations is reduced.
A summary of fixed-rate floor income earned by the AGM operating segment follows.
Three months ended September 30,Nine months ended September 30,
2025202420252024
Fixed-rate floor income, gross$1,027 225 $2,999 563 
Derivative settlements (a)438 1,200 1,293 3,583 
Fixed-rate floor income, net$1,465 1,425 $4,292 4,146 
(a)    Derivative settlements consist of settlements received related to the Company's derivatives used to hedge student loans earning fixed-rate floor income.
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For further details of the Company’s derivatives used to hedge fixed-rate loans, see note 5 of the notes to consolidated financial statements included in Part I, Item 1 of this report.
AGM is also exposed to interest rate risk in the form of repricing risk and basis risk because the interest rate characteristics of AGM’s assets do not match the interest rate characteristics of the funding for those assets. The following table presents AGM’s FFELP student loan assets and related funding for those assets arranged by underlying indices as of September 30, 2025:
IndexFrequency of variable resetsAssetsFunding of student loan assets
30-day average SOFR (a)Daily$7,377,269 — 
3-month Treasury billDaily243,386 — 
3-month H15 financial commercial paperDaily239,602 — 
30-day average SOFR / 1-month CME Term SOFRMonthly— 4,473,273 
90-day average SOFR / 3-month CME Term SOFR (a)Quarterly— 1,785,665 
Asset-backed commercial paper / SOFR (b)Varies— 535,389 
Fixed rate—— 312,850 
Auction-rate (c)Varies— 60,585 
Other (d)—757,252 1,449,747 
  $8,617,509 8,617,509 
(a)    The Company has certain basis swaps outstanding in which the Company receives payments indexed to three-month SOFR and makes payments based on the one-month SOFR index (plus or minus a spread) as defined in the agreements (the "Basis Swaps"). The Company entered into these derivative instruments to better match the interest rate characteristics on its student loan assets and the debt funding such assets. The following table summarizes the Basis Swaps outstanding as of September 30, 2025:
MaturityNotional amount
2026$1,150,000 
2027250,000 
$1,400,000 
(b)    The interest rate on the Company's FFELP warehouse facilities is indexed to asset-backed commercial paper rates and daily SOFR.
(c)    As of September 30, 2025, the Company was sponsor for $60.6 million of outstanding asset-backed securities that were set and provide for interest rates to be periodically reset via a "dutch auction" (the “Auction Rate Securities”). Since the auction feature has essentially been inoperable for substantially all auction rate securities since 2008, the Auction Rate Securities generally pay interest to the holder at a maximum rate as defined by the indenture. While these rates will vary, they will generally be based on a spread to SOFR or Treasury Securities, or the Net Loan Rate as defined in the financing documents.
(d)    Assets include accrued interest receivable and restricted cash. Funding represents overcollateralization (equity) and other liabilities included in FFELP loan asset-backed securitizations and warehouse facilities.
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The following table summarizes the effect on the Company’s consolidated earnings based upon a sensitivity analysis performed on AGM’s variable-rate assets (including loans earning fixed-rate floor income) and liabilities. The sensitivity analysis was performed assuming the funding index increases 10 basis points and 30 basis points while holding the asset index constant, if the funding index is different than the asset index.
Asset and funding index mismatches
Increase of
10 basis points		Increase of
30 basis points		Increase of
10 basis points		Increase of
30 basis points
DollarsPercentDollarsPercentDollarsPercentDollarsPercent
Three months ended September 30, 2025Three months ended September 30, 2024
Effect on earnings:
Increase (decrease) in pre-tax net income before impact of derivative settlements$(792)(0.6)%$(2,377)(1.8)%$(819)(36.8)%$(2,457)(110.5)%
Impact of derivative settlements353 0.3 1,059 0.8 352 15.8 1,056 47.5 
Increase (decrease) in net income before taxes$(439)(0.3)%$(1,318)(1.0)%$(467)(21.0)%$(1,401)(63.0)%
Increase (decrease) in basic and diluted earnings per share$(0.01)$(0.03)$(0.01)$(0.03)
Nine months ended September 30, 2025Nine months ended September 30, 2024
Effect on earnings:
Increase (decrease) in pre-tax net income before impact of derivative settlements$(2,376)(0.5)%$(7,127)(1.5)%$(2,714)(1.8)%$(8,140)(5.4)%
Impact of derivative settlements1,047 0.2 3,142 0.7 1,483 1.0 4,449 3.0 
Increase (decrease) in net income before taxes$(1,329)(0.3)%$(3,985)(0.8)%$(1,231)(0.8)%$(3,691)(2.4)%
Increase (decrease) in basic and diluted earnings per share$(0.03)$(0.08)$(0.03)$(0.08)
Interest Rate Risk - Nelnet Bank
To manage Nelnet Bank's risk from fluctuations in market interest rates, the Company actively monitors interest rates and other interest sensitive components to minimize the impact that changes in interest rates have on the fair value of assets, net income, and cash flow. To achieve this objective, the Company manages and mitigates Nelnet Bank’s exposure to fluctuations in market interest rates through several techniques, including managing the maturity, repricing, and mix of fixed- and variable-rate assets and liabilities and the use of derivative instruments.
The following table presents Nelnet Bank's loan assets, asset-backed security investments, and deposits (including intercompany deposits) by rate characteristics:
 As of September 30, 2025As of December 31, 2024
 DollarsPercentDollarsPercent
Fixed-rate loan assets$633,589 $505,539 
Fixed-rate investments75,190 90,303 
Total fixed-rate assets708,779 36.1 %595,842 42.8 %
Variable-rate loan assets341,294 139,058 
Variable-rate investments914,125 656,794 
Total variable-rate assets1,255,419 63.9 795,852 57.2 
Total assets$1,964,198 100.0 %$1,391,694 100.0 %
Fixed-rate deposits$475,711 27.4 %$449,706 35.8 %
Variable-rate deposits (a)1,257,330 72.6 804,916 64.2 
Total deposits$1,733,041 100.0 %$1,254,622 100.0 %
(a)    Nelnet Bank uses derivative instruments to hedge exposure to variability in cash flows of variable-rate deposits to minimize the exposure to volatility in cash flows from future changes in interest rates. The derivatives are not reflected in the above table. See note 5 of the notes to consolidated financial statements included under Part I, Item 1 of this report for a summary of Nelnet Bank's derivatives outstanding as of September 30, 2025.
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Interest Rate and Market Risk - Investments
The following table presents the rates earned on the Company’s available-for-sale debt securities (investments) and debt facilities used to fund a portion of such investments. The table below excludes securities (investments) held by Nelnet Bank.
Average balanceInterest income/ expenseAverage yields/ ratesAverage balanceInterest income/ expenseAverage yields/ rates
Three months ended September 30,
20252024
Investments:
Asset-backed securities available-for-sale (a) (b)$953,996 14,651 6.09 %$818,421 11,502 5.58 %
Debt funding asset-backed securities available-for-sale:
Participation agreement - variable rate (c)$3,555 46 5.13 %$100 2 6.16 %
Repurchase agreements - variable rate (d)— — — 108,933 1,780 6.48 
$3,555 46 5.13 $109,033 1,782 6.48 
Nine months ended September 30,
20252024
Investments:
Asset-backed securities available-for-sale (a) (b)$721,365 30,756 5.70 %$836,400 39,612 6.31 %
Debt funding asset-backed securities available-for-sale:
Participation agreement - variable rate (c)$1,264 49 5.18 %$3,841 177 6.14 %
Repurchase agreements - variable rate (d)— — — 120,977 6,039 6.65 
$1,264 49 5.18 $124,818 6,216 6.63 
(a)    The Company has repurchased certain of its own asset-backed securities (bonds and notes payable) in the secondary market. For accounting purposes, these notes are eliminated in consolidation and are not included in the Company's consolidated financial statements. However, these securities remain legally outstanding at the trust level and the Company could sell these notes to third parties or redeem the notes at par as cash is generated by the trust estate. Upon a sale of these notes to third parties, the Company would obtain cash proceeds equal to the market value of the notes on the date of such sale. The table above includes these repurchased bonds.
(b)    The majority of the Company’s asset-backed securities earn floating rates with expected returns of approximately SOFR + 100 to 250 basis points to maturity. As of September 30, 2025, $226.0 million (par value) of the Company’s asset-backed securities earn a weighted average fixed rate of 3.72%.
(c)    Interest incurred by the Company on amounts borrowed under the participation agreement is at a variable rate of SOFR + 62.5 basis points.
(d)    Interest incurred by the Company on amounts that were borrowed under repurchase agreements was at a variable rate of SOFR + 100 to 140 basis points.
The Company’s portfolio of asset-backed investment securities has limited liquidity, and the Company could incur a significant loss if the investments were sold prior to maturity at an amount less than the original purchase price. As of September 30, 2025, the gross unrealized loss on the Company’s available-for-sale debt securities (including available-for-sale securities held at Nelnet Bank) was $16.3 million, and the aggregate fair value of available-for-sale debt securities with unrealized losses was $343.7 million. The Company currently has the intent and ability to retain these investments, and none of the unrealized losses were due to credit losses. See note 6 of the notes to consolidated financial statements included under Part I, Item 1 of this report for additional information.
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Consolidated Sensitivity Analysis
The following table summarizes the effect on the Company’s consolidated earnings, based upon a sensitivity analysis performed on the Company’s significant interest-earning assets and interest-bearing liabilities assuming hypothetical increases and decreases in interest rates of 100 basis points and 300 basis points, while funding spreads remain constant:
Interest rates
Change from increase of
100 basis points		Change from increase of
300 basis points		Change from decrease of
100 basis points		Change from decrease of
300 basis points
DollarsPercentDollarsPercentDollarsPercentDollarsPercent
Three months ended September 30, 2025
Effect on earnings:
AGM Operating Segment (a)$914 $4,910 $455 $4,018 
Nelnet Bank Operating Segment (b)321 965 (321)(965)
NFS Other Operating Segments (c)1,820 5,460 (1,820)(5,460)
ETSP Operating Segment (d)1,958 5,874 (1,958)(5,874)
Corporate and Other Activities (d)1,139 3,418 (1,139)(3,418)
Increase (decrease) in net income before taxes$6,152 4.5 %$20,627 15.1 %$(4,783)(3.5)%$(11,699)(8.6)%
Increase (decrease) in basic and diluted earnings per share$0.13 $0.43 $(0.10)$(0.24)
Nine months ended September 30, 2025
Effect on earnings:
AGM Operating Segment (a)$1,690 $15,431 $1,183 $10,726 
Nelnet Bank Operating Segment (b)1,186 3,558 (1,186)(3,558)
NFS Other Operating Segments (c)3,746 11,327 (3,746)(11,327)
ETSP Operating Segment (d)4,784 14,352 (4,784)(14,352)
Corporate and Other Activities (d)1,254 3,763 (1,254)(3,763)
Increase (decrease) in net income before taxes$12,660 2.6 %$48,431 10.1 %$(9,787)(2.0)%$(22,274)(4.6)%
Increase (decrease) in basic and diluted earnings per share$0.26 $1.01 $(0.20)$(0.46)
(a)Impact associated with variable-rate restricted cash, variable-rate loans, and variable-rate bonds and notes payable, including the impact of derivative settlements.
(b)Impact associated with variable-rate loans and debt securities (investments) and variable-rate deposits, including the impact of derivative settlements.
(c)Impact associated with variable-rate debt securities (investments).
(d)Impact associated with interest earning operating and restricted cash accounts.
ITEM 4.  CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company’s management, with the participation of the Company's principal executive and principal financial officers, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of September 30, 2025. Based on this evaluation, the Company’s principal executive and principal financial officers concluded that the Company's disclosure controls and procedures were effective as of September 30, 2025.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting during the fiscal quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
There have been no material changes from the information referred to in the Legal Proceedings section of the Company's Annual Report on Form 10-K for the year ended December 31, 2024 under Part I, Item 3 of such Form 10-K.
ITEM 1A.  RISK FACTORS
While we attempt to identify, manage, and mitigate risks and uncertainties associated with our business, some level of risk and uncertainty will always be present. The Company's Annual Report on Form 10-K for the year ended December 31, 2024, in the section entitled "Item 1A. Risk Factors," describes some of the risks and uncertainties associated with our business. The information presented below supplements such risk factors. The risk factor set forth below should be read in conjunction with the risk factors included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. These risks and uncertainties have the potential to materially affect our business, financial condition, results of operations, cash flows, projected results, and future prospects.
Our solar tax equity investments and our solar construction businesses may be impacted by the enactment of the One Big Beautiful Bill.
On July 4, 2025, the One Big Beautiful Bill (the “Bill”) was enacted into law. Among other substantial changes to the tax code, the Bill significantly reduces tax incentives for clean energy, eliminating or phasing out many of the environmental and clean energy tax credits for commercial projects enabled by the Inflation Reduction Act of 2022. Prior to the enactment of the Bill, many of those credits were scheduled to remain in effect until 2032 or later. The Bill accelerates the expiration and phasing out of certain clean energy credits. Under the provisions of the Bill, commercial solar facilities must either (i) begin construction before July 4, 2026, in which case they would qualify for up to a four-year continuity safe harbor or (ii) be placed in service by December 31, 2027. The accelerated expiration and phasing out of solar tax credits implemented by the Bill will impact our ability to continue to invest in solar projects beyond the phase out periods. In addition, the Bill introduced complex new “foreign entity of concern” restrictions on solar projects that begin construction after 2025. These new restrictions may adversely impact supply chain costs and availability for solar projects, as well as compliance-related costs, which may further adversely impact solar project viability and risk. These changes in aggregate both limit the viability of solar investments themselves as well as the total pool of credits from which our tax equity opportunities are created.
Since the second quarter of 2025, given uncertainty around the pending Bill and tariffs, as well as rising construction costs, NRE has not accepted any new contracts in our solar construction business. The accelerated expiration and phasing out of solar tax credits implemented by the Bill will adversely impact revenue in our solar construction business due to the reduction of economic incentives for solar development leading to lower deployment rates and more project cancellations. We are exploring strategic alternatives for NRE.
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Stock Repurchases
The following table summarizes the repurchases of Class A common stock during the third quarter of 2025 by the Company or any “affiliated purchaser” of the Company, as defined in Rule 10b-18(a)(3) under the Securities Exchange Act of 1934. Certain share repurchases included in the table below were made pursuant to a trading plan adopted by the Company in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934.
PeriodTotal number of shares purchased (a)Average price paid per share (b)Total number of shares purchased as part of publicly announced plans or programs (c)Maximum number of shares that may yet be purchased under the plans or programs (c)
July 1 - July 31, 202526,265 $119.71 26,265 4,795,926 
August 1 - August 31, 202547,908 120.38 47,908 4,748,018 
September 1 - September 30, 2025143,677 126.09 137,443 4,610,575 
Total217,850 $124.07 211,616 
(a)    The total number of shares includes: (i) shares repurchased pursuant to the stock repurchase program discussed in footnote (c) below; and (ii) shares owned and tendered by employees to satisfy tax withholding obligations upon the vesting of restricted shares. Shares purchased pursuant to the applicable stock repurchase program discussed in footnote (c) below during August included a total of 41,929 shares of Class A common stock purchased from a certain significant shareholder in a privately negotiated transaction on August 25, 2025. Shares of Class A common stock tendered by employees to satisfy tax withholding obligations included 6,234 shares in September 2025. Unless otherwise indicated, shares
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owned and tendered by employees to satisfy tax withholding obligations were purchased at the closing price of the Company’s shares on the date of vesting.
(b)    The average price of shares repurchased excludes excise taxes.
(c)    On May 8, 2025, the Company announced that its Board of Directors authorized a stock repurchase program to repurchase up to a total of five million shares of the Company's Class A common stock during the three-year period ending May 8, 2028. The five million shares authorized under the new program include the remaining unpurchased shares from the prior program, which the new program replaced. As of September 30, 2025, 4,610,575 shares remained authorized for repurchase under the Company's stock repurchase program.
Working capital and dividend restrictions/limitations
The Company's $495.0 million unsecured line of credit, which is available through September 22, 2026, imposes restrictions on the payment of dividends through covenants requiring a minimum consolidated net worth and a minimum level of unencumbered cash, cash equivalent investments, and available borrowing capacity under the line of credit. In addition, trust indentures and other financing agreements governing debt issued by the Company's lending subsidiaries generally have limitations on the amounts of funds that can be transferred to the Company by its subsidiaries through cash dividends at certain times. Further, Nelnet Bank and Nelnet Insurance Services' consolidated captive insurance companies are subject to laws and regulations that restrict the ability to pay dividends to the Company and authorize regulatory authorities to prohibit or limit the payment of dividends by these subsidiaries to the Company. These provisions do not currently materially limit the Company's ability to pay dividends and, based on the Company's current financial condition and recent results of operations, the Company does not currently anticipate that these provisions will materially limit the future payment of dividends.
ITEM 5.  OTHER INFORMATION
Rule 10b5-1 Trading Plans
The following table describes contracts, instructions, or written plans for the purchase or sale of the Company's securities adopted by the Company's directors or executive officers during the third quarter of 2025, each of which is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c), referred to as Rule 10b5-1 trading plans:
Name and TitleDate of Adoption of Rule 10b5-1 Trading Plan
Scheduled Expiration Date of Rule 10b5-1 Trading Plan (a)
Aggregate Number of Securities to Be Purchased or Sold
Michael S. Dunlap
Executive Chairman
8/19/202512/19/2025
Gift transfer of 35,000 shares of Class A common stock
Jona M. Van Deun
Director
9/9/20251/9/2026
Sale of 400 shares of Class A common stock
(a) A trading plan may also expire on such earlier date as all transactions under the trading plan are completed.
ITEM 6.  EXHIBITS
31.1*
31.2*
32**
101.INS*Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*Inline XBRL Taxonomy Extension Schema Document.
101.CAL*Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*Filed herewith
**Furnished herewith
80


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 
 NELNET, INC. 
    
Date:November 6, 2025By:/s/ JEFFREY R. NOORDHOEK 
 Name:Jeffrey R. Noordhoek 
 Title:
Chief Executive Officer
Principal Executive Officer
 
    
Date:November 6, 2025By:/s/ JAMES D. KRUGER 
Name:James D. Kruger 
 Title: 
Chief Financial Officer
Principal Financial Officer and Principal Accounting Officer
 


81

What is the market capitalization of a company?

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