- Student loan company Nelnet has just laid off more than 500 workers.
- The company confirmed the reason for the layoff was unemployment from Biden’s debt relief.
- The Insider first reported in May 2022 that Nelnet had laid off 150 employees due to student loan defaults.
A major student loan company has laid off more than 500 of its workers — blaming President Joe Biden’s debt relief.
On Wednesday, Nelnet sent an email to 560 employees to tell them they were fired, an employee involved told Insider. The company confirmed in a statement that 350 of those workers were hired in the last six months after Biden hearing up to $20,000 in debt relief to help with what was expected to be a very high call because the relief was implemented and student loan repayments were made.
But the debt relief has been blocked since October because of two impeachments supported by the team, and Biden expanded Student loan payments were suspended on December 31st. It will expire 60 days after June 30, or 60 days after claims are filed, whichever occurs first. According to Nelnet, the lack of work for those additional workers led to this decision.
“These decisions are not easy,” said Ben Kiser, Nelnet’s chief communications officer. “With federal student loan repayment delays through most of 2023, unfortunately, it is not possible to sustain the growth of the labor force for jobs that will remain the same for much longer.”
The 350 employees hired since August were given 60 days’ notice of their termination from the Nelnet Diversified Services (NDS) division, and 210 other employees were suspension for work reasons.
“We will continue to explore opportunities within the organization to restore qualified partners, and we hope that many will consider re-applying to join our NDS team when payments resume, ” Kiser said.
This isn’t the first time Nelnet has pulled out while stopping student loan payments. Inside first reported in May 2022 Nelnet laid off about 150 workers, with the company writing in an email that the student loan repayment freeze has resulted in “job closures for some teams.”
“Although we have been able to redeploy hundreds of associates to other positions over the past few months as well as reduce unused capacity through furloughs, reduced hours, and voluntary furloughs ai, unfortunately there is not enough space for everyone, and we have to make the difficult decision to correct many of our teams servicing loans,” the email at the time.
The Insider spoke to two employees involved in that first round of layoffs, and they explained the sudden conclusion seems to cause “great anxiety.”
“We didn’t know who was coming next, and they didn’t say anything to us,” said a former employee. “These people were fired and removed without a word. .”
Other student loan companies have not publicly confirmed any changes in operations due to Biden’s debt relief – but the industry will undergo major changes this year. The plan to cancel $20,000 in student loans for federal borrowers is headed to the Supreme Court. on February 28and the Ministry of Education has made it clear that payments will start again this year, regardless of the Court’s decision.
With millions of borrowers forced into repayment, school-loan companies are likely to implement a number of changes to debt plans issued by the department, including changes to the income-based repayment plan and the Public Service Loan Forgiveness (PSLF) program. No exact date has been set for those changes, but it appears to be a major undertaking.