SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
 JULY 29, 2004
NELNET, INC.
 (Exact name of registrant as specified in its charter)

          NEBRASKA                 001-31924               84-0748903
(State or other jurisdiction      (Commission           (I.R.S. Employer
     of incorporation)           File Number)         Identification No.)	

121 SOUTH 13TH STREET
SUITE 201
LINCOLN, NEBRASKA 68508
 (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (402) 458-2370
 
Item 12. Results of Operations and Financial Condition.
On July 29, 2004, Nelnet, Inc. issued a press release with respect to its earnings for the fiscal quarter ended June 30, 2004, which is furnished as Exhibit 99.1 to this Current Report on Form 8-K. Additional information for the quarter, which is available on the Registrant's website at www.nelnet.net, is furnished as Exhibit 99.2.
 
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 hereunto duly authorized.
Dated: July 29, 2004
NELNET, INC.

By:     /s/ Terry J. Heimes
    --------------------------------------
    Name:   Terry J. Heimes
    Title:  Chief Financial Officer	

NELNET, INC.
Form 8-K
CURRENT REPORT
EXHIBIT INDEX

Exhibit No.           Description
-----------           -----------

99.1                  Press Release dated July 29, 2004

99.2                  Additional Information Available on the
                      Registrant's Website	

Exhibit 99.1
Media contact: Sheila Odom
402.458.2329
nelnetcommunications@nelnet.net
Investor contact: Cheryl Watson
317.469.2064
investorrelations@nelnet.net
For immediate release
NELNET REPORTS RECORD NET INCOME
 Net student loan assets increase 29%
(Lincoln, NE) - Nelnet, Inc. (NYSE: NNI) today reported year to date 2004 net income of $94.4 million or $1.76 per share compared to $17.9 million or $0.40 per share for the first six months of 2003. For the second quarter of 2004, net income of $85.3 million or $1.59 per share was recorded compared to $8.3 million or $0.19 per share a year ago. Nelnet's 2004 earnings per share increased more than 22% year to date and 68% for the second quarter as compared to 2003, exclusive of a special allowance yield adjustment and related expenses.
Net student loan assets have grown to $12.2 billion at June 30, 2004, an increase of $2.7 billion or 29% from a year ago. This represents a 17% increase from Nelnet's position at December 31, 2003.
"We had a great six months, and are particularly excited about our student loan growth," said Stephen Butterfield, Nelnet Vice Chairman and Co-CEO.
Two already announced items had a significant financial impact on Nelnet. Net interest income increased $130 million in the second quarter of 2004 as compared to last year. Included in net interest income for the second quarter of 2004 is $124 million related to an increase in yield of which $79 million was previously deferred at March 31, 2004.
Second, the U.S. Department of Education designated Nelnet with Exceptional Performance status. This designation eliminates the 2% risk share on student loans serviced by Nelnet and reduces required allowances for loan losses related to the company's federally insured loan portfolio.
"Our continued strong asset growth and operational excellence as highlighted by our Exceptional Performance designation are examples of our commitment to operate this business with focus on long term fundamental value," Butterfield continued.
Net interest income includes variable-rate floor income, or floor income generated by the annual reset of borrower rates on July 1, of $348,000 for the six months ended June 30, 2004. No variable-rate floor income was earned in the second quarter. For 2003, amounts include $12.7 million and $6.9 million of variable-rate floor income for the corresponding periods.
Amortization expense related to identifiable intangible assets amounted to $4.2 million and $2.1 million for the six months and quarter ended June 30, 2004, respectively. In 2003, amortization expense for the corresponding periods were $7.2 million and $3.5 million.
Included in the derivative market value adjustment and net settlements on the company's consolidated statement of income are gains in the fair value of derivative instruments of $548,000 year to date 2004 and $3.1 million for the second quarter 2004 and net settlement expense of $2.9 million year to date 2004 and $1.7 million for the second quarter 2004.
Nelnet will host a conference call to discuss this earnings release at 2:00 p.m. (Eastern) today. To access the call live, participants in the U.S. and Canada should dial 800.289.0544 and international callers should dial 913.981.5533 at least 15 minutes prior to the call. A live audio Web cast of the call will also be available at www.nelnetinvestors.net under the conference calls and Web casts menu. A replay of the conference call will be available between 5:00 p.m. (Eastern) today and 11:59 p.m. (Eastern) August 5. To access the replay via telephone within the U.S. and Canada, callers should dial 888.203.1112. International callers should dial 719.457.0820. All callers accessing the replay will need to use the confirmation code 656727. A replay of the audio Web cast will also be available at www.nelnetinvestors.net.
Supplemental financial information to this earnings release is available online at http://www.nelnetinvestors.net/releases.cfm?reltype=Financial.
###
Nelnet is one of the leading education finance companies in the United States and is focused on providing quality student loan products and services to students and schools nationwide. With over $13 billion in total assets, Nelnet originates in excess of $3 billion for itself and its service partners annually, and its servicing software is used by approximately 35 clients, including Nelnet, to service nearly $50 billion in student loans. Nelnet ranks among the nation's leaders in terms of total student loan assets.
Nelnet offers a broad range of student loan and financial services and technology-based products, including student loan origination and lending, guarantee servicing, and a suite of software solutions. Our products are designed to simplify the student loan process by automating financial aid delivery, loan processing, and funds disbursement. Our services help to facilitate and streamline education finance for all involved in the industry, including student and parent borrowers, lenders, financial aid officers, guaranty agencies, governmental agencies, servicers, and the capital markets.
Additional information is available at www.nelnet.net.
Information contained in this press release, other than historical information, may be considered forward-looking in nature and is subject to various risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or expected. Among the key factors that may have a direct bearing on Nelnet's
operating results, performance, or financial condition are changes in terms of student loans and the educational credit marketplace, changes in the demand for educational financing or in financing preferences of educational institutions, students and their families, or changes in the general interest rate environment and in the securitization markets for education loans.
(code #: nnif)
CONDENSED STATEMENTS OF INCOME AND FINANCIAL DATA

                                                               THREE MONTHS ENDED             SIX MONTHS ENDED
                                                                    JUNE 30,                     JUNE 30,
                                                           --------------------------   ---------------------------
                                                                2004         2003           2004           2003
                                                           ------------  ------------   -------------   -----------
                                                                                (UNAUDITED)
                                                                   (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

Interest income:
    Loan interest, excluding variable rate floor income     $  239,436   $    99,982    $   347,632    $   199,991
    Variable rate floor income                                       -         6,900            348         12,700
    Amortization of loan premiums                              (15,037)      (14,209)       (34,854)       (30,336)
    Investment interest                                          3,181         5,343          6,832          9,268
                                                           ------------  ------------   ------------   ------------
      Total interest income                                    227,580        98,016        319,958        191,623

Interest expense:
    Interest on bonds and notes payable                         52,352        52,826        101,395        104,175
                                                           ------------  ------------   ------------   ------------
      Net interest income                                      175,228        45,190        218,563         87,448

Less provision (recovery) for loan losses                       (6,421)        2,450         (3,306)         4,860
                                                           ------------  ------------   ------------   ------------
      Net interest income after provision (recovery)
      for loan losses                                          181,649        42,740        221,869         82,588
                                                           ------------  ------------   ------------   ------------
Other income:
    Loan servicing and other fee income                         22,512        24,400         48,221         50,237
    Software services and other income                           5,029         4,471         10,607          9,111
    Derivative market value adjustment and net settlements       1,357             -         (2,384)             -
                                                           ------------  ------------   ------------   ------------
      Total other income                                        28,898        28,871         56,444         59,348
                                                           ------------  ------------   ------------   ------------

Operating expenses:
    Salaries and benefits                                       49,036        30,343         76,805         56,848
    Other expenses                                              25,081        23,602         48,446         48,526
    Amortization of intangible assets                            2,079         3,500          4,157          7,196
                                                           ------------  ------------   ------------   ------------
      Total operating expenses                                  76,196        57,445        129,408        112,570
                                                           ------------  ------------   ------------   ------------
      Income before income taxes                               134,351        14,166        148,905         29,366

Income tax expense                                              49,098         5,840         54,531         11,462
                                                           ------------  ------------   ------------   ------------
      Net income                                           $    85,253   $     8,326    $    94,374    $    17,904
                                                           ============  ============   ============   ============
     Earnings per share, basic and diluted                 $      1.59   $      0.19    $      1.76    $      0.40
                                                           ============  ============   ============   ============

Weighted average shares outstanding                         53,647,697    45,038,488     53,641,664     45,011,757	

CONDENSED BALANCE SHEETS AND FINANCIAL DATA

                                                       AS OF         AS OF         AS OF
                                                      JUNE 30,    DECEMBER 31,    JUNE 30,
                                                        2004          2003         2003
                                                    ------------  ------------  -----------
                                                     (UNAUDITED)                 (UNAUDITED)
                                                             (DOLLARS IN THOUSANDS)

                 ASSETS
Student loans receivable, net                       $12,194,097   $10,455,442   $ 9,466,523
Cash, cash equivalents and investments                  908,087     1,155,215       659,874
Other assets                                            357,395       320,852       286,717
                                                    ------------  ------------  ------------
    Total assets                                    $13,459,579   $11,931,509   $10,413,114
                                                    ============  ============  ============

          LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
    Bonds and notes payable                         $12,844,539   $11,366,458   $10,179,726
    Other liabilities                                   214,058       259,562       106,199
                                                    ------------  ------------  ------------
       Total liabilities                             13,058,597    11,626,020    10,285,925
                                                    ------------  ------------  ------------
Shareholders' equity                                    400,982       305,489       127,189
                                                    ------------  ------------  ------------
       Total liabilities and shareholders' equity   $13,459,579   $11,931,509   $10,413,114
                                                    ============  ============  ============

Average student loans                               $10,869,351   $ 9,451,035   $ 8,648,786
Return on average total assets                            1.50%         0.25%         0.35%
Return on average equity                                  57.1%         19.4%         30.3%	

Exhibit 99.2
FOR RELEASE: 07/29/04
 MEDIA CONTACT: Sheila Odom, 402.458.2329 INVESTOR CONTACT: Cheryl Watson, 317.469.2064
NELNET, INC. SUPPLEMENTAL FINANCIAL INFORMATION FOR THE SECOND QUARTER 2004
The following supplemental information should be read in connection with the second quarter 2004 earnings press release of Nelnet, Inc. (the "Company"), dated July 29, 2004.
Statements in this supplemental financial information release, which refer to expectations as to future developments, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements contemplate risks, uncertainties, and other factors that may cause the actual results to differ materially from such forward-looking statements. Such factors include among others, changes in, or arising from, the implementation of applicable laws and regulations or changes in laws and regulations affecting the education finance marketplace. Changes in the terms of student loans and the educational credit marketplace arising from the implementation of applicable laws and regulations and from changes in such laws and regulations, changes in the demand for educational financing or in financing preferences of educational institutions, students and their families, and changes in the general interest rate environments, could also have a substantial impact on future results. For more information see our filings with the Securities and Exchange Commission.
 
CONDENSED STATEMENTS OF INCOME AND FINANCIAL DATA

                                                                 THREE MONTHS ENDED            SIX MONTHS ENDED
                                                                      JUNE 30,                    JUNE 30,
                                                             --------------------------  ---------------------------
                                                                 2004            2003         2004          2003
                                                             -------------  -----------  -------------  ------------
                                                                                  (UNAUDITED)
                                                                     (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
Interest income:
    Loan interest, excluding variable rate floor income      $   239,436   $    99,982   $    347,632   $   199,991
    Variable rate floor income                                         -         6,900            348        12,700
    Amortization of loan premiums                                (15,037)      (14,209)       (34,854)      (30,336)
    Investment interest                                            3,181         5,343          6,832         9,268
                                                             ------------  ------------  -------------  ------------
      Total interest income                                      227,580        98,016        319,958       191,623

Interest expense:
    Interest on bonds and notes payable                           52,352        52,826        101,395       104,175
                                                             ------------  ------------  -------------  ------------

      Net interest income                                        175,228        45,190        218,563        87,448

Less provision (recovery) for loan losses                         (6,421)        2,450         (3,306)        4,860
                                                             ------------  ------------  -------------  ------------

      Net interest income after provision (recovery)
      for loan losses                                            181,649        42,740        221,869        82,588
                                                             ------------  ------------  -------------  ------------
Other income:
    Loan servicing and other fee income                           22,512        24,400         48,221        50,237
    Software services and other income                             5,029         4,471         10,607         9,111
    Derivative market value adjustment and net settlements         1,357             -         (2,384)            -
                                                             ------------  ------------  -------------  ------------
      Total other income                                          28,898        28,871         56,444        59,348
                                                             ------------  ------------  -------------  ------------

Operating expenses:
    Salaries and benefits                                         49,036        30,343         76,805        56,848
    Other expenses                                                25,081        23,602         48,446        48,526
    Amortization of intangible assets                              2,079         3,500          4,157         7,196
                                                             ------------  ------------  -------------  ------------
      Total operating expenses                                    76,196        57,445        129,408       112,570
                                                             ------------  ------------  -------------  ------------

      Income before income taxes                                 134,351        14,166        148,905        29,366

Income tax expense                                                49,098         5,840         54,531        11,462
                                                             ------------  ------------  -------------  ------------
      Net income                                             $    85,253   $     8,326    $    94,374   $    17,904
                                                             ============  ============  =============  ============
      Earnings per share, basic and diluted                  $      1.59   $      0.19    $      1.76   $      0.40
                                                             ============  ============  =============  ============

Weighted average shares outstanding                           53,647,697    45,038,488     53,641,664    45,011,757	

CONDENSED BALANCE SHEETS AND FINANCIAL DATA

                                                         AS OF         AS OF         AS OF
                                                        JUNE 30,     DECEMBER 31,   JUNE 30,
                                                          2004          2003          2003
                                                      ------------  ------------  ------------
                                                       (UNAUDITED)                 (UNAUDITED)
                                                                (DOLLARS IN THOUSANDS)
                   ASSETS
Student loans receivable, net                         $12,194,097   $10,455,442   $ 9,466,523
Cash, cash equivalents and investments                    908,087     1,155,215       659,874
Other assets                                              357,395       320,852       286,717
                                                      ------------  ------------  ------------
    Total assets                                      $13,459,579   $11,931,509   $10,413,114
                                                      ============  ============  ============

       LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
    Bonds and notes payable                           $12,844,539   $11,366,458   $10,179,726
    Other liabilities                                     214,058       259,562       106,199
                                                      ------------  ------------  ------------
       Total liabilities                               13,058,597    11,626,020    10,285,925
                                                      ------------  ------------  ------------

Shareholders' equity                                      400,982       305,489       127,189

                                                      ------------  ------------  ------------
       Total liabilities and shareholders' equity     $13,459,579   $11,931,509   $10,413,114
                                                      ============  ============  ============

Average student loans                                 $10,869,351   $ 9,451,035   $ 8,648,786
Return on average total assets                              1.50%         0.25%         0.35%
Return on average equity                                    57.1%         19.4%         30.3%	

DERIVATIVE ACCOUNTING
The Company maintains an overall interest rate risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility. Derivative instruments that are currently used as part of the Company's interest rate risk management strategy include interest rate swaps and basis swaps. The Company's goal is to manage interest rate sensitivity by modifying the re-pricing or maturity characteristics of certain balance sheet assets and liabilities. Management has structured all of the Company's derivative transactions with the intent that each is economically effective. However, such derivative instruments may not qualify for hedge accounting under Statement of Financial Accounting Standards No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES, and thus may adversely impact earnings.
The following is a summary of the amounts included in derivative market value adjustment and net settlements on the consolidated statements of income. The amounts exclude the derivatives entered into in July 2004 that have a notional amount of $3.7 billion.

                                        THREE MONTHS ENDED         SIX MONTHS ENDED
                                             JUNE 30,                   JUNE 30,
                                      -----------------------   ----------------------
                                        2004          2003         2004        2003
                                      ----------   ----------   ---------- -----------
                                                         (UNAUDITED)
                                                    (DOLLARS IN THOUSANDS)

Change in fair value of derivative
    instruments                       $   3,075    $       -    $     548   $       -
Settlements, net                         (1,718)           -       (2,932)          -
                                      ----------   ----------   ----------  ----------

Derivative market value adjustment
    and net settlements               $   1,357    $       -    $  (2,384)  $       -
                                      ==========   ==========   ==========  ==========	

STUDENT LOAN SPREAD
The following table analyzes the student loan spread on our portfolio of student loans. This table represents the spread on assets earned in conjunction with the liabilities used to fund the assets.

                                          THREE MONTHS ENDED             SIX MONTHS ENDED
                                               JUNE 30,                       JUNE 30,
                                    -----------------------------  -----------------------------
                                        2004            2003            2004            2003
                                    ------------    -------------  --------------   ------------
                                                             (UNAUDITED)
Student loan yield                          9.06 %          5.22 %          6.96 %         5.33 %
Consolidation rebate fees                  (0.57)          (0.42)          (0.56)         (0.41)
Premium amortization                       (0.53)          (0.64)          (0.64)         (0.70)
                                    -------------   -------------  --------------   ------------

Student loan net yield                      7.96            4.16            5.76           4.22
Student loan cost of funds                 (1.69)          (2.08)          (1.69)         (2.10)
                                    -------------   -------------  --------------   ------------

Student loan spread                         6.27            2.08            4.07           2.12
Variable-rate floor income                     -           (0.31)          (0.01)         (0.29)
Special allowance yield adjustment         (4.41)              -           (2.29)             -
                                    -------------   -------------  --------------   ------------

Core student loan spread                    1.86 %          1.77 %          1.77 %         1.83 %
                                    =============   =============  ==============   ============

Average balance of student loans
   (dollars in thousands)            $11,284,876      $8,899,049     $10,869,351     $8,648,786	

STUDENT LOANS RECEIVABLE, NET
Student loans receivable, net includes all student loans owned by or on behalf of the Company and includes the unamortized cost of acquisition or origination less an allowance for losses. The following table describes the components of our loan portfolio:

                                              AS OF JUNE 30,              AS OF DECEMBER 31,              AS OF JUNE 30,
                                                  2004                          2003                         2003
                                         ------------------------     -------------------------     -----------------------
                                                         PERCENT                      PERCENT                     PERCENT
                                           DOLLARS      OF TOTAL         DOLLARS     OF TOTAL         DOLLARS    OF TOTAL
                                         ------------  ----------     ------------  -----------     ------------ ----------
                                               (UNAUDITED)                                                 (UNAUDITED)
                                                                       (DOLLARS IN THOUSANDS)
Federally insured:
    Stafford                             $ 5,319,123        43.6 %    $  4,900,249        46.9 %    $ 5,245,779       55.4 %
    PLUS/SLS (a)                             290,398         2.4           249,217         2.4          298,341        3.2
    Consolidation                          6,329,369        51.9         5,073,081        48.5        3,685,876       38.9
Non-federally insured:
    Private loans                             94,439         0.8            92,327         0.9           87,851        0.9
                                         ------------  ----------     -------------  ----------     ------------ ----------

      Total                               12,033,329        98.7        10,314,874        98.7        9,317,847       98.4

Unamortized premiums                         168,890         1.4           156,594         1.5          162,426        1.7
Allowance for loan losses:
    Allowance - federally insured               (735)       (0.0)           (9,755)       (0.1)          (9,425)      (0.1)
    Allowance - private                       (7,387)       (0.1)           (6,271)       (0.1)          (4,325)      (0.0)

                                         ------------  ----------     -------------  ----------     ------------ ----------
      Net                                $12,194,097       100.0 %    $ 10,455,442       100.0 %    $ 9,466,523      100.0 %
                                         ============  ==========     =============  ==========     ============ ==========

---------------------------------------

(a) Supplemental loans for students, or SLS, are the predecessor to unsubsidized
Stafford loans.	

During the second quarter of 2004, the Company reclassified FFELP loans and the related allowance that have been rejected for reimbursement by the guarantor to the private loan portfolio, because these loans are effectively uninsured. In the above table, the reclassification is reflected for all periods presented.
The following table sets forth the loans originated or acquired through each of our channels:

                                                  THREE MONTHS ENDED              SIX MONTHS ENDED
                                                       JUNE 30,                        JUNE 30,
                                             ----------------------------   ---------------------------
                                                 2004           2003            2004           2003
                                             -------------  -------------   -------------  -------------
                                                                     (UNAUDITED)
                                                               (DOLLARS IN THOUSANDS)
Beginning balance                            $ 11,065,865    $ 8,881,560    $ 10,314,874    $ 8,404,388
Direct channel:
   Consolidation loan originations                505,353        292,446       1,311,918        736,670
   Less consolidation of existing portfolio      (201,999)      (117,000)       (523,008)      (352,000)
                                             -------------  -------------   -------------  -------------
     Net consolidation loan originations          303,354        175,446         788,910        384,670
   Stafford/PLUS loan originations                 27,385         30,760         120,312        116,876
Branding partner channel                          360,704        244,418         715,207        610,740
Forward flow channel                              362,888        167,395         448,092        308,002
Other channels                                    109,787         35,046         130,783         63,666
                                             -------------  -------------   -------------  -------------

   Total channel acquisitions                   1,164,118        653,065       2,203,304      1,483,954

Loans acquired in subsidiary
   acquisitions                                   136,138              -         136,138              -
Repayments, claims, capitalized
   interest and other                            (332,792)      (216,778)       (620,987)      (570,495)
                                             -------------  -------------   -------------  -------------

Ending balance                               $ 12,033,329    $ 9,317,847    $ 12,033,329    $ 9,317,847
                                             =============  =============   =============  =============	

PORTFOLIO COMPOSITION
The following table shows our fixed rate student loan assets as of June 30, 2004:

                     BORROWER/
      FIXED           LENDER          ESTIMATED         CURRENT
     INTEREST        WEIGHTED         VARIABLE          BALANCE
       RATE          AVERAGE         CONVERSION        OF FIXED
      RANGE           YIELD           RATE (A)        RATE ASSETS
-----------------   -----------   ---------------   --------------
                           (UNAUDITED)              (IN THOUSANDS)
    4.0 - 4.5%         4.22%            1.58%         $    327,444
    4.5 - 5.0          4.72             2.08               241,373
    5.0 - 5.5          5.10             2.46                62,982
    5.5 - 6.0          5.69             3.05               130,172
    6.0 - 6.5          6.21             3.57               284,952
    6.5 - 7.0          6.71             4.07               357,278
    7.0 - 8.0          7.53             4.89               306,871
      > 8.0            8.56             5.92             1,045,163
 9.5 floor yield       9.50             6.86             3,559,261
                                                      ------------

                                                      $  6,315,496
                                                      ============

---------------------------------------	

(a) The estimated variable conversion rate is the estimated short-term interest rate at which loans would convert to variable rate.