Student Loan Servicers Lay Off 500 Employees | In Higher Ed

Nelnet, a federal student loan servicer, is cutting staff due to delays in the Biden administration’s debt relief plan and continued delays in loan payments, the company said. hearing Wednesday.

About 350 workers hired in the past six months will be laid off and about 210 workers will be laid off for “performance reasons,” according to the announcement. Employees were given 60 days notice if their performance was not up to par.

Nelnet began ramping up its workforce last year to prepare for a one-time program to forgive student loans and resume payments after a break scheduled to end Dec. 31. ended up in federal court. block Loan forgiveness, which is better late the resumption of payments. The administration plans to resume payments 60 days after June 30 or after claims challenging the credit plan, whichever comes first. The US Supreme Court will hear oral arguments on the plan next month.

“These decisions are not easy,” Nelnet spokesman Ben Kiser said in a statement. “With federal student loan repayments delayed through most of 2023, unfortunately, we cannot sustain the increase in the workforce for jobs that will remain the same for much longer.”

Kiser said that Nelnet expects many employees will consider reapplying when the payments start again.

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