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Nelnet Student Loans Review: Rates, Options, and Public Opinion

With tuition rates and overall cost of living climbing rapidly and showing no signs of slowing down, most students find it necessary to finance their higher education with loans such as Nelnet student loans. Nelnet is one of the ten student loan service providers that service federal student loans. You do not get a choice in this matter. Your loan provider is chosen at random. You do, however, have a choice in private student loan providers or who you refinance your loans with. Keep reading for a comprehensive review of four of the biggest players in the student loan industry and how they stack up.

Quick Navigation
What to Look for in Student Loans
Product Specs
Pricing
How It Compares
Conclusion

What to Look for in Student Loans

If you cannot pay out of pocket for school, the first thing you need to do is get the maximum amount of money you can from scholarships, federal grants, and other financial aid, and then federal student loans. Once you have exhausted all these resources, seek private student loans such as those provided by Nelnet student loans.

Whether you are looking for Nelnet student loans or another student loan provider, make sure you can expect excellent customer service with multiple convenient communication options, flexibility to pay your loans back, and features such as forbearance, discounts, the ability to add or remove co-signers, unemployment protection, and the opportunity to make interest-only payments if you can prove financial hardship.

Product Specs

Headquartered in Lincoln, Nebraska, Nelnet services both federal and private students loans for over 5 million borrowers. Whether you take out Nelnet student loans or not, their website contains a wealth of information on personal finance that all students and recent graduates can use. This includes budgeting worksheets and strategies, financial wellness and credit card tips, how to protect your identity and more. Nelnet offers special features such as new repayment plans, deferment, and forbearance.

Pricing

How much you pay over the life of your student loan depends on the loan term, interest rate, and any fees such as an origination fee or early payment fee. The longer the loan term, the lower the monthly payment is. However, your interest rate will be higher to compensate for the greater risk to the loan provider. To pay the least over the life of your loan, choose the shortest loan term you can afford.

If you choose a variable interest rate, it may start lower than the fixed interest rate you could qualify for based on your credit, but it can increase to significantly more than the fixed rate quickly, causing you to pay more throughout your loan.

Origination fees are a onetime fee sometimes called an administrative fee and may be deducted from the cash you receive from your loan. Avoid companies with early payment fees at all costs. You should not be penalized for paying your loans off early. To save money on your student loans, make payments specifically to principal rather than pre-paying your next month's bill.

How It Compares

We picked a few similar loan options available on the market to see how they compare.

  • Sallie Mae
  • Laurel Road
  • Discover Student Loans
  • Nelnet Student Loans
  • FEES
  • Interest Rate
  • Loan Options
  • Public Opinion
  • Loan Terms

$$

1 of 5 stars

Interest rates for federal student loans are readily available, but interest rates for Nelnet student loans are not clearly published.

5 of 5 stars

Whether you are applying for undergraduate, graduate or professional student loans or looking to consolidate your existing loans, you have the option of fixed or variable interest rates.

5 of 5 stars

There are over 340 complaints to the Better Business Bureau, mostly regarding product and services offered and billing and collection services. There are issues with customer service and the way the loan status is reported to the credit bureaus. For example, loans are being reported as delinquent or sent to collections when they are actually in good standing.

5 of 5 stars

Undergraduate loans may be paid back for up to 15 years. Graduate and professional student loans may be paid back for up to 20 years. Consolidated student loan debt may be paid back over the course of 25 years.

PROS

  • Easy-to-navigate website
  • Pay by group
  • Text alerts to avoid late payments
  • Print your tax info
  • Deferment and forbearance

CONS

  • Issues with reporting to credit bureaus
  • No transparency in private rates
CHECK WEBSITE

Sallie Mae

Sallie Mae is one of the most recognized student loan providers in the country. But how do their loans compare to Nelnet student loans? Sallie Mae finances student loans for everything from private kindergartens to grad school. They have been around for 43 years, received an A+ rating from the Better Business Bureau, and their customer service is 100% US-based. There is no transparency regarding the minimum credit score required to qualify for a loan, but in 2016, approved applicants had an average credit score rating of 748 per FICO.

  • Price
  • Interest Rate 
  • Loan Options
  • Public Opinion
  • Loan Terms

$

Loan amounts start at $1,000 and cap at the school-certified cost of attendance.

3 of 5 stars

Unlike Nelnet student loans, if you take out a loan from Sallie Mae, you can expect to pay between 4% and 10.86% for undergraduate loans with a variable APR and between 4% and 9.04% variable interest for graduate and MBA loans. For fixed rates, you can expect your APR to be 5.74% to 11.85% for undergraduate student loans, 6.25% to 9.16% for graduate loans and 5.75% to 8.68% for MBA loans.

5 of 5 stars

Sallie Mae may have the best loan options around. They offer loans for undergraduates, career training, parents, K-12 education, MBA, medical school, medical residency, dental school, dental residency, health professions graduate, law school, bar study, and graduate school. Most student loan providers require 36 months of consecutive on-time payments to release a co-signer, but Sallie Mae requires only 12.

5 of 5 stars

At the time of writing, there were only 179 complaints to the Better Business Bureau. These were related to billing and collection issues and problems with the product or service.

3 of 5 stars

Sallie Mae offers loan repayment terms ranging from five to 15 years, but unlike most loan service providers, they assign the loan terms to you. You have no option to pick your repayment plan.

PROS

  • No repayment fees
  • Co-signer release
  • Discounts

CONS

  • Only one discount opportunity
  • No pre-approval
  • Sallie Mae assigns loan terms
CHECK WEBSITE

Laurel Road

Laurel Road is the best student loan provider for medical residents. Once you earn your MD, you can pay as little as $100 monthly during your fellowship or residency and remain current. To apply, you need to provide the school you attend, the degree you are working towards, your enrollment status and your graduation date. You also need to provide identification, citizenship or personal residency and other personal information for yourself and any cosigner you include in your application.

  • Price
  • Interest Rate 
  • Loan Options
  • Public Opinion
  • Loan Terms

$$

There is a minimum loan amount of $5,000, but there is no cap on how much money borrowers can take out. However, your school must certify your tuition rate and other expenses you wish to take out a loan for.

5 of 5 stars

For graduate students, Laurel Road offers fixed interest rates between 4.5% and 8.91% depending on if you opt for a 5, 7, 10, 15 or 20-year loan. Variable interest rates range from 3.93% to 8.1% depending on the loan term. These rates assume a 0.25% discount for setting up auto-pay from your checking account. While, for each loan term, the range of variable rates is lower than the maximum fixed rate you could pay based on your creditworthiness, you could still pay a higher interest rate than what you would have qualified for with a fixed-rate loan.

4 of 5 stars

Laurel Road offers both fixed and variable interest rates. They also provide both student loans for graduate students and student loan refinancing. The major downside to Laurel Road is you must be in an eligible program to qualify for their loans. To qualify for a graduate student loan with Laurel Road, you need a credit score of at least 660, but you don't need to provide any proof of income. You may also take up to four three-month forbearance periods throughout your loan term.

4 of 5 stars

There are many reasons students think highly of Laurel Road. A co-signer release is allowed after 36 consecutive on-time payments. There are no fees other than fair late fees. Reduced payments are available for dental and medical residents for up to six months after their fellowship or residency ends and forbearance is allowable for military leave.

5 of 5 stars

With Laurel Road student loans, you have the option to pay your loans back over the course of five to 20 years.

PROS

  • No origination or prepayment fees
  • Lower rates than federal loans
  • Merit-based and other discounts
  • Easy application
  • Refinance Parents PLUS loans
  • Co-signer release option
  • APR ranges clearly stated
  • Available in all 50 states
  • Flexible repayment terms

CONS

  • No academic deferment
  • Only 12 months of forbearance
  • Must manually make payments over the minimum
  • Mediocre customer service
CHECK WEBSITE

Discover Student Loans

Discover offers much more than credit cards. Besides revolving lines of credit, they also offer a variety of installment loans including student loans. Student loans can be financed for undergraduate and graduate students, MBA students, law students, bar exams, residency and health professions. You may also consolidate your student loans through Discover. You can apply in 15 minutes or less.

  • Price
  • Interest Rate 
  • Loan Options
  • Public Opinion
  • Loan Terms

$

For both undergraduate and graduate loans, you may take out a loan amount ranging from $1,000 to 100% of school-certified costs after financial aid. Depending on the program you are attending, Discover may set an aggregate loan limit at their discretion.

2 of 5 stars

For undergraduate student loans, expect fixed-rate loans to be between 5.99% and 12.99% APR and 3.99% to 11.74% for variable-rate loans. For graduate students, the fixed APR range is 5.99% to 13.99%, and the variable APR range is from 3.99% to 12.99%.

4 of 5 stars

With Discover student loans, you are allowed to choose between in-school and deferred repayment options. You may pay a fixed monthly payment of $25 while in school or during the grace period which is much lower than other student loan providers offer. You may defer payments until you are enrolled less than half-time or six months after you graduate. Graduate students may defer their payments for up to nine months after graduation.

4 of 5 stars

The three major issues the public has with Discover student loans are there is no co-signer release program, receiving personalized rates requires a hard credit check, and there are limited repayment schedule options.

1 of 5 stars

Discover offers a term of 15 years after the deferment period to pay your loans back for undergraduate students. For graduate students, the loan term is 20 years after the deferment period. There are no prepayment penalties, but we would have liked to see more term options such as five or seven years like you would get with Nelnet student loans.

PROS

  • US-based loan specialist
  • 1% cash reward for 3.0 GPA
  • No application, late or loan origination fees
  • 100% covered school costs

CONS

  • No cosigner release
CHECK WEBSITE

Conclusion

Exhaust all other options before taking out private student loans. If you end up with Nelnet student loans because they are servicing your federal student loans, they are not a terrible company to work with. However, if you are looking for a private student loan provider, there are better options out there for you.

Overall, we give Nelnet a 3 out of a 5-star rating. Our biggest qualms about the company were the lack of transparency regarding key information such as interest rates you can expect to pay and approval qualifications. This is not an issue if you have a federal student loan because those interest rates are fixed, but when shopping around for a private student loan, this information is critical.

Remember when seeking a student loan provider to ensure there are no fees associated with your loans such as administrative or origination fees or early payment penalties. Look for a provider with excellent customer service, hardship forgiveness, and other flexibility to pay your loans back.

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