NELNET INC, 10-Q filed on 11/7/2013
Quarterly Report
Document and Entity Information Document (USD $)
9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Oct. 31, 2013
Common Class A [Member]
Oct. 31, 2013
Common Class B [Member]
Document Information [Line Items]
 
 
 
 
Entity Registrant Name
NELNET INC 
 
 
 
Document Type
10-Q 
 
 
 
Current Fiscal Year End Date
--12-31 
 
 
 
Entity Common Stock, Shares Outstanding
 
 
34,872,451 
11,495,377 
Entity Public Float
 
$ 604,976,291 
 
 
Amendment Flag
false 
 
 
 
Entity Central Index Key
0001258602 
 
 
 
Entity Current Reporting Status
Yes 
 
 
 
Entity Voluntary Filers
No 
 
 
 
Entity Filer Category
Accelerated Filer 
 
 
 
Entity Well-known Seasoned Issuer
No 
 
 
 
Document Period End Date
Sep. 30, 2013 
 
 
 
Document Fiscal Year Focus
2013 
 
 
 
Document Fiscal Period Focus
Q3 
 
 
 
Consolidated Balance Sheets (unaudited) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Assets:
 
 
Student loans receivable (net of allowance for loan losses)
$ 24,701,112 
$ 24,830,621 
Non-federally insured student loans receivable - held for sale
28,480 
Cash and cash equivalents:
 
 
Cash and cash equivalents - not held at a related party
6,421 
7,567 
Cash and cash equivalents - held at a related party
44,970 
58,464 
Total cash and cash equivalents
51,391 
66,031 
Investments
232,663 
83,312 
Restricted cash and investments
674,926 
815,462 
Restricted cash - due to customers
93,695 
96,516 
Accrued interest receivable
303,350 
307,518 
Accounts receivable (net of allowance for doubtful accounts)
62,951 
63,638 
Goodwill
117,118 
117,118 
Intangible assets, net
6,932 
9,393 
Property and equipment, net
33,013 
31,869 
Other assets
103,021 
88,976 
Fair value of derivative instruments
128,276 
97,441 
Total assets
26,536,928 
26,607,895 
Liabilities:
 
 
Bonds and notes payable
24,858,455 
25,098,835 
Accrued interest payable
14,218 
14,770 
Other liabilities
171,134 
161,671 
Due to customers
93,695 
96,516 
Fair value of derivative instruments
21,513 
70,890 
Total liabilities
25,159,015 
25,442,682 
Nelnet, Inc. shareholders' equity:
 
 
Preferred stock
Common stock:
 
 
Additional paid-in capital
24,068 
32,540 
Retained earnings
1,347,609 
1,129,389 
Accumulated other comprehensive earnings
5,722 
2,813 
Total Nelnet, Inc. shareholders' equity
1,377,863 
1,165,208 
Noncontrolling interest
50 
Total equity
1,377,913 
1,165,213 
Commitments and contingencies
 
 
Total liabilities and equity
26,536,928 
26,607,895 
Common Class A [Member]
 
 
Common stock:
 
 
Common stock
349 
351 
Common Class B [Member]
 
 
Common stock:
 
 
Common stock
115 
115 
Variable Interest Entity, Primary Beneficiary [Member]
 
 
Assets:
 
 
Student loans receivable (net of allowance for loan losses)
24,755,486 
24,920,130 
Cash and cash equivalents:
 
 
Restricted cash and investments
673,304 
753,511 
Other assets
305,546 
306,454 
Fair value of derivative instruments
101,819 
82,841 
Liabilities:
 
 
Bonds and notes payable
25,017,110 
25,209,341 
Other liabilities
311,541 
348,364 
Commitments and contingencies
 
 
Net assets of consolidated variable interest entities
507,504 
505,231 
held for investment [Member]
 
 
Assets:
 
 
Student loans receivable (net of allowance for loan losses)
$ 24,701,112 
$ 24,830,621 
Consolidated Balance Sheets (unaudited) (Parentheticals) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Allowance for loan losses
$ 54,197 
$ 51,902 
Allowance for doubtful accounts
$ 2,510 
$ 1,529 
Preferred stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, authorized shares
50,000,000 
50,000,000 
Preferred stock, issued shares
Preferred stock, outstanding shares
Common Class A [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized
600,000,000 
600,000,000 
Shares Issued
34,876,145 
35,116,913 
Shares Outstanding
34,876,145 
35,116,913 
Common Class B [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized
60,000,000 
60,000,000 
Shares Issued
11,495,377 
11,495,377 
Shares Outstanding
11,495,377 
11,495,377 
Consolidated Statements of Income (unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Interest income:
 
 
 
 
Loan interest
$ 158,675 
$ 150,528 
$ 472,277 
$ 454,574 
Investment interest
1,562 
1,140 
4,662 
3,290 
Total interest income
160,237 
151,668 
476,939 
457,864 
Interest expense:
 
 
 
 
Interest on bonds and notes payable
55,315 
66,402 
171,800 
203,175 
Net interest income
104,922 
85,266 
305,139 
254,689 
Less provision for loan losses
5,000 
5,000 
15,000 
18,000 
Net interest income after provision for loan losses
99,922 
80,266 
290,139 
236,689 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
64,582 
53,285 
180,261 
155,164 
Tuition payment processing and campus commerce revenue
19,927 
17,928 
61,694 
56,675 
Enrollment services revenue
22,563 
30,661 
76,343 
92,035 
Other income
8,613 
12,699 
30,317 
32,453 
Gain on sale of loans and debt repurchases
2,138 
195 
10,900 
1,130 
Derivative market value and foreign currency adjustments and derivative settlements, net
(16,648)
(31,275)
24,612 
(68,073)
Total other income (expense)
101,175 
83,493 
384,127 
269,384 
Operating expenses:
 
 
 
 
Salaries and benefits
48,712 
46,395 
144,049 
144,193 
Cost to provide enrollment services
14,668 
20,151 
51,097 
62,203 
Depreciation and amortization
4,340 
8,402 
13,037 
24,764 
Other
39,887 
29,989 
109,193 
93,160 
Total operating expenses
107,607 
104,937 
317,376 
324,320 
Income before income taxes
93,490 
58,822 
356,890 
181,753 
Income tax expense
(30,444)
(21,870)
(123,637)
(59,978)
Net income
63,046 
36,952 
233,253 
121,775 
Net income attributable to noncontrolling interest
216 
124 
1,101 
412 
Comprehensive income attributable to noncontrolling interest
216 
124 
1,101 
412 
Net income attributable to Nelnet, Inc.
$ 62,830 
$ 36,828 
$ 232,152 
$ 121,363 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
$ 1.35 
$ 0.78 
$ 4.98 
$ 2.56 
Weighted average common shares outstanding - basic and diluted
46,496,612 
47,460,308 
46,593,241 
47,399,207 
Consolidated Statements of Comprehensive Income (unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Net income
$ 63,046 
$ 36,952 
$ 233,253 
$ 121,775 
Available-for-sale securities:
 
 
 
 
Unrealized holding gains (losses) arising during period, net
5,689 
133 
6,875 
1,745 
Less reclassification adjustment for gains recognized in net income, net
(730)
(2,618)
(2,246)
(4,848)
Income tax effect
(1,834)
961 
(1,720)
1,170 
Total other comprehensive loss
3,125 
(1,524)
2,909 
(1,933)
Comprehensive income
66,171 
35,428 
236,162 
119,842 
Comprehensive income attributable to noncontrolling interest
216 
124 
1,101 
412 
Net income attributable to noncontrolling interest
216 
124 
1,101 
412 
Comprehensive income attributable to Nelnet, Inc.
$ 65,955 
$ 35,304 
$ 235,061 
$ 119,430 
Consolidated Statements of Shareholders' Equity (unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Preferred Stock [Member]
Common Class A [Member]
Common Class B [Member]
Additional paid-in capital [Member]
Retained earnings [Member]
Accumulated other comprehensive earnings [Member]
Employee notes receivable [Member]
Noncontrolling interest [Member]
Balance at Jun. 30, 2012
$ 1,144,898 
$ 0 
$ 358 
$ 115 
$ 52,194 
$ 1,092,715 
$ (409)
$ (368)
$ 293 
Balance (in Shares) at Jun. 30, 2012
 
35,847,801 
11,495,377 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
36,828 
 
 
 
 
36,828 
 
 
 
Net income attributable to noncontrolling interest
124 
 
 
 
 
 
 
 
(124)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Net income
36,952 
 
 
 
 
 
 
 
 
Other comprehensive income (loss)
(1,524)
 
 
 
 
 
(1,524)
 
 
Cash dividend on Class A and Class B common stock
(4,737)
 
 
 
 
(4,737)
 
 
 
Issuance of common stock, net of forfeitures
271 
 
271 
 
 
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
(180)
 
 
 
 
 
Compensation expense for stock based awards
584 
 
 
 
584 
 
 
 
 
Repurchase of common stock
(206)
 
(206)
 
 
 
 
Repurchase of common stock (in Shares)
 
 
(8,545)
 
 
 
 
 
Balance at Sep. 30, 2012
1,176,238 
358 
115 
52,843 
1,124,806 
(1,933)
 
417 
Balance (in Shares) at Sep. 30, 2012
 
35,839,076 
11,495,377 
 
 
 
 
 
Balance at Dec. 31, 2011
1,066,205 
356 
115 
49,245 
1,017,629 
(1,140)
Balance (in Shares) at Dec. 31, 2011
 
35,643,102 
11,495,377 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
121,363 
 
 
 
 
121,363 
 
 
 
Net income attributable to noncontrolling interest
412 
 
 
 
 
 
 
 
(412)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Issuance of minority membership interest
 
 
 
 
 
 
 
Net income
121,775 
 
 
 
 
 
 
 
 
Other comprehensive income (loss)
(1,933)
 
 
 
 
 
(1,933)
 
 
Distribution to noncontrolling interest
 
 
 
 
 
 
 
 
Cash dividend on Class A and Class B common stock
(14,186)
 
 
 
 
(14,186)
 
 
 
Issuance of common stock, net of forfeitures
3,548 
 
3,545 
 
 
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
255,538 
 
 
 
 
 
Compensation expense for stock based awards
1,573 
 
 
 
1,573 
 
 
 
 
Repurchase of common stock
(1,521)
 
(1)
(1,520)
 
 
 
 
Repurchase of common stock (in Shares)
 
 
(59,564)
 
 
 
 
 
Reduction of employee stock notes receivable
772 
 
 
 
 
 
 
772 
 
Balance at Sep. 30, 2012
1,176,238 
358 
115 
52,843 
1,124,806 
(1,933)
(368)
417 
Balance (in Shares) at Sep. 30, 2012
 
35,839,076 
11,495,377 
 
 
 
 
 
Balance at Dec. 31, 2012
1,165,213 
351 
115 
32,540 
1,129,389 
2,813 
Balance (in Shares) at Dec. 31, 2012
 
35,116,913 
11,495,377 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
232,152 
 
 
 
 
 
 
 
 
Net income attributable to noncontrolling interest
1,101 
 
 
 
 
 
 
 
(1,101)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Issuance of minority membership interest
 
 
 
 
 
 
 
Net income
233,253 
 
 
 
 
 
 
 
 
Other comprehensive income (loss)
2,909 
 
 
 
 
 
2,909 
 
 
Distribution to noncontrolling interest
(1,061)
 
 
 
 
 
 
 
1,061 
Cash dividend on Class A and Class B common stock
(13,932)
 
 
 
 
(13,932)
 
 
 
Issuance of common stock, net of forfeitures
2,233 
 
2,231 
 
 
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
149,608 
 
 
 
 
 
Compensation expense for stock based awards
2,308 
 
 
 
2,308 
 
 
 
 
Repurchase of common stock
(13,015)
 
(4)
(13,011)
 
 
 
 
Repurchase of common stock (in Shares)
 
 
(390,376)
 
 
 
 
 
Balance at Sep. 30, 2013
1,377,913 
349 
115 
24,068 
1,347,609 
5,722 
50 
Balance (in Shares) at Sep. 30, 2013
 
34,876,145 
11,495,377 
 
 
 
 
 
Balance at Jun. 30, 2013
1,319,595 
350 
115 
27,004 
1,289,416 
2,597 
113 
Balance (in Shares) at Jun. 30, 2013
 
34,988,110 
11,495,377 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
62,830 
 
 
 
 
62,830 
 
 
 
Net income attributable to noncontrolling interest
216 
 
 
 
 
 
 
 
(216)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Net income
63,046 
 
 
 
 
 
 
 
 
Other comprehensive income (loss)
3,125 
 
 
 
 
 
3,125 
 
 
Distribution to noncontrolling interest
(279)
 
 
 
 
 
 
 
279 
Cash dividend on Class A and Class B common stock
(4,637)
 
 
 
 
(4,637)
 
 
 
Issuance of common stock, net of forfeitures
264 
 
264 
 
 
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
(745)
 
 
 
 
 
Compensation expense for stock based awards
824 
 
 
 
824 
 
 
 
 
Repurchase of common stock
(4,025)
 
(1)
(4,024)
 
 
 
 
Repurchase of common stock (in Shares)
 
 
(111,220)
 
 
 
 
 
Balance at Sep. 30, 2013
$ 1,377,913 
$ 0 
$ 349 
$ 115 
$ 24,068 
$ 1,347,609 
$ 5,722 
$ 0 
$ 50 
Balance (in Shares) at Sep. 30, 2013
 
34,876,145 
11,495,377 
 
 
 
 
 
Consolidated Statements of Shareholders' Equity (unaudited) (Parentheticals)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Common Class A [Member]
 
 
 
 
Dividends paid per common share
$ 0.10 
$ 0.10 
$ 0.30 
$ 0.30 
Common Class B [Member]
 
 
 
 
Dividends paid per common share
$ 0.10 
$ 0.10 
$ 0.30 
$ 0.30 
Consolidated Statements of Cash Flows (unaudited) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Net income attributable to Nelnet, Inc.
$ 232,152 
$ 121,363 
Net income attributable to noncontrolling interest
1,101 
412 
Net income
233,253 
121,775 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization, including debt discounts and student loan premiums and deferred origination costs
58,330 
85,370 
Student loan discount accretion
(26,333)
(31,693)
Provision for loan losses
15,000 
18,000 
Derivative market value adjustment
(73,743)
67,349 
Foreign currency transaction adjustment
25,902 
(6,186)
Payments to terminate and/or amend derivative instruments
(6,469)
(6,430)
Gain on sale of loans
(34)
(80)
Gain from debt repurchases
(10,866)
(1,050)
Gain from sales of available-for-sale securities, net
(2,246)
(4,848)
Payments for Origination and Purchases of Loans Held-for-sale
(28,480)
Deferred income tax expense (benefit)
13,279 
(29,141)
Other
2,557 
763 
Decrease in accrued interest receivable
4,168 
40,545 
Increase in accounts receivable
687 
(7,745)
(Increase) decrease in other assets
(2,445)
2,330 
Decrease in accrued interest payable
(552)
(2,998)
Decrease in other liabilities
598 
14,636 
Net cash provided by operating activities
202,606 
260,597 
Cash flows from investing activities:
 
 
Purchases of student loans
(1,696,253)
(875,556)
Purchases Of Student Loans From Related Party
(466,941)
(299)
Net proceeds from student loan repayments, claims, capitalized interest, participations, and other
2,269,253 
2,500,005 
Proceeds from sale of student loans
11,287 
92,149 
Purchases of available-for-sale securities
(196,657)
(155,057)
Proceeds from sales of available-for-sale securities
52,733 
112,854 
Payments to Acquire Other Investments
(8,316)
Purchases of property and equipment, net
(11,720)
(7,370)
Decrease (increase) in restricted cash
140,536 
(291,239)
Net cash provided by investing activities
93,922 
1,375,487 
Cash flows from financing activities:
 
 
Payments on bonds and notes payable
(4,159,079)
(2,795,019)
Proceeds from issuance of bonds and notes payable
3,888,772 
1,232,250 
Payments of debt issuance costs
(13,295)
(7,630)
Dividends paid
(13,932)
(14,186)
Repurchases of common stock
(13,015)
(1,521)
Proceeds from issuance of common stock
437 
349 
Payments received on employee stock notes receivable
772 
Issuance of noncontrolling interest
Distribution to noncontrolling interest
(1,061)
Net cash used in financing activities
(311,168)
(1,584,980)
Net increase in cash and cash equivalents
(14,640)
51,104 
Cash and cash equivalents, beginning of period
66,031 
 
Cash and cash equivalents, end of period
51,391 
93,674 
Supplemental disclosures of cash flow information:
 
 
Interest paid
148,482 
179,007 
Income taxes paid, net of refunds
$ 114,744 
$ 86,798 
Basis of Financial Reporting
Basis of Financial Reporting
Basis of Financial Reporting

The accompanying unaudited consolidated financial statements of Nelnet, Inc. and subsidiaries (the “Company”) as of September 30, 2013 and for the three and nine months ended September 30, 2013 and 2012 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2012 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 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, 2013 are not necessarily indicative of the results for the year ending December 31, 2013. 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, 2012 (the "2012 Annual Report").

Student Loans Receivable and Allowance for Loan Losses
Financing Receivables [Text Block]
Student Loans Receivable and Allowance for Loan Losses

Student loans receivable consisted of the following:
 
As of
 
As of
 
September 30, 2013
 
December 31, 2012
 
Held for investment
 
Held for sale
 
Held for investment
Federally insured loans
 
 
 
 
 
Stafford and other
$
6,884,348

 

 
7,261,114

Consolidation
17,908,229

 

 
17,708,732

Total
24,792,577

 

 
24,969,846

Non-federally insured loans
66,283

 
28,480

 
26,034

 
24,858,860


28,480

 
24,995,880

Loan discount, net of unamortized loan premiums and deferred origination costs
(103,551
)
 

 
(113,357
)
Allowance for loan losses – federally insured loans
(42,406
)
 

 
(40,120
)
Allowance for loan losses – non-federally insured loans
(11,791
)
 

 
(11,782
)
 
$
24,701,112

 
28,480

 
24,830,621

Allowance for federally insured loans as a percentage of such loans
0.17
%
 
 
 
0.16
%
Allowance for non-federally insured loans as a percentage of such loans
17.79
%
 
 
 
45.26
%


Activity in the Allowance for Loan Losses

The provision for loan losses represents the periodic expense of maintaining an allowance appropriate to absorb losses, net of recoveries, inherent in the portfolio of student loans. Activity in the allowance for loan losses is shown below.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Balance at beginning of period
$
51,611

 
49,657

 
51,902

 
48,482

Provision for loan losses:
 
 
 
 
 

 
 

Federally insured loans
5,000

 
5,000

 
16,000

 
18,000

Non-federally insured loans

 

 
(1,000
)
 

Total provision for loan losses
5,000

 
5,000

 
15,000

 
18,000

Charge-offs:
 

 
 

 
 

 
 

Federally insured loans
(3,142
)
 
(5,449
)
 
(12,472
)
 
(16,943
)
Non-federally insured loans
(906
)
 
(1,058
)
 
(2,270
)
 
(2,355
)
Total charge-offs
(4,048
)
 
(6,507
)
 
(14,742
)
 
(19,298
)
Recoveries - non-federally insured loans
363

 
399

 
1,173

 
1,104

Purchase (sale) of federally insured loans, net
700

 
(928
)
 
(1,243
)
 
(2,647
)
Transfer from repurchase obligation related to non-federally insured loans repurchased, net
571

 
588

 
2,107

 
2,568

Balance at end of period
$
54,197

 
48,209

 
54,197

 
48,209

 
 
 
 
 
 
 
 
Allocation of the allowance for loan losses:
 
 
 

 
 

 
 

Federally insured loans
$
42,406

 
35,614

 
42,406

 
35,614

Non-federally insured loans
11,791

 
12,595

 
11,791

 
12,595

Total allowance for loan losses
$
54,197

 
48,209

 
54,197

 
48,209


Repurchase Obligations

As of September 30, 2013, the Company had participated a cumulative amount of $98.5 million (par value) of non-federally insured loans to third parties. Loans participated under these agreements have been accounted for by the Company as loan sales. Accordingly, the participation interests sold are not included in the Company’s consolidated balance sheets. Per the terms of the servicing agreements, the Company’s servicing operations are obligated to repurchase loans subject to the participation interests in the event such loans become 60 or 90 days delinquent.

In addition, in 2011, the Company sold a portfolio of non-federally insured loans for proceeds of $91.3 million (100% of par value).  The Company retained credit risk related to this portfolio and will pay cash to purchase back any loans which become 60 days delinquent. As of September 30, 2013, the balance of this portfolio was $66.0 million (par value).

The Company’s estimate related to its obligation to repurchase these loans is included in “other liabilities” in the Company’s consolidated balance sheets. The activity related to this accrual is detailed below.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Beginning balance
$
14,594

 
17,243

 
16,130

 
19,223

Repurchase obligation transferred to the allowance for loan losses related to loans repurchased, net
(571
)
 
(588
)
 
(2,107
)
 
(2,568
)
Ending balance
$
14,023

 
16,655

 
14,023

 
16,655


Student Loan Status and Delinquencies

Delinquencies have the potential to adversely impact the Company’s earnings through increased servicing and collection costs and account charge-offs.  The percent of non-federally insured loans held for investment that were delinquent 31 days or greater as of September 30, 2013, December 31, 2012, and September 30, 2012 was 13.4 percent, 28.6 percent, and 26.0 percent, respectively. The table below shows the Company’s federally insured student loan delinquency amounts.

Rehabilitation Loans and Delinquent Loans Funded in FFELP Warehouse Facilities

Rehabilitation loans are student loans that have previously defaulted, but for which the borrower has made a specified number of on-time payments.  Although rehabilitation loans benefit from the same guarantees as other federally insured student loans, rehabilitation loans have generally experienced re-default rates that are higher than default rates for federally insured student loans that have not previously defaulted.  The Company has purchased a significant amount of rehabilitation loans during 2012 and 2013.  Upon purchase, these loans are recorded at fair value, which generally approximates the federal guarantee rate under the Federal Family Education Loan Program ("FFEL Program" or "FFELP").  As such, there is minimal credit risk related to rehabilitation loans purchased; therefore, these loans are presented separately in the following delinquency tables.

In addition, the Company has purchased delinquent federally insured loans that are funded in the Company's FFELP warehouse facilities. Upon purchase, these loans are recorded at fair value, which generally approximates the federal guarantee rate. As such, there is minimal credit risk related to these loans. Loans delinquent 121 days or greater and funded in the Company's FFELP warehouse facilities are included with rehabilitated loans purchased in the following delinquency tables.

 
As of September 30, 2013
 
As of December 31, 2012
 
As of September 30, 2012
Federally insured loans, excluding rehabilitation loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
2,780,442

 
 
 
$
2,949,320

 
 
 
$
3,163,918

 
 
Loans in forbearance
2,953,119

 
 
 
2,992,023

 
 
 
2,868,168

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
14,157,330

 
87.2
%
 
14,583,044

 
87.6
%
 
13,673,217

 
87.2
%
Loans delinquent 31-60 days
662,814

 
4.1

 
652,351

 
3.9

 
586,021

 
3.7

Loans delinquent 61-90 days
354,975

 
2.2

 
330,885

 
2.0

 
308,377

 
2.0

Loans delinquent 91-120 days
235,681

 
1.5

 
247,381

 
1.5

 
237,941

 
1.5

Loans delinquent 121-270 days
624,042

 
3.8

 
603,942

 
3.6

 
628,697

 
4.0

Loans delinquent 271 days or greater
195,853

 
1.2

 
220,798

 
1.4

 
253,438

 
1.6

Total loans in repayment
16,230,695

 
100.0
%
 
16,638,401

 
100.0
%
 
15,687,691

 
100.0
%
Total federally insured loans, excluding rehabilitation loans
$
21,964,256

 
 

 
$
22,579,744

 
 

 
$
21,719,777

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rehabilitation loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
259,377

 
 
 
$
150,317

 
 
 
$
90,836

 
 
Loans in forbearance
443,629

 
 
 
330,278

 
 
 
129,257

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
1,078,730

 
50.7
%
 
670,205

 
35.1
%
 
418,584

 
61.9
%
Loans delinquent 31-60 days
188,583

 
8.9

 
113,795

 
6.0

 
52,053

 
7.7

Loans delinquent 61-90 days
125,310

 
5.9

 
79,691

 
4.2

 
35,104

 
5.2

Loans delinquent 91-120 days
137,016

 
6.4

 
186,278

 
9.8

 
33,931

 
5.0

Loans delinquent 121-270 days
354,192

 
16.7

 
633,001

 
33.1

 
99,041

 
14.7

Loans delinquent 271 days or greater
241,484

 
11.4

 
226,537

 
11.8

 
37,025

 
5.5

Total loans in repayment
2,125,315

 
100.0
%
 
1,909,507

 
100.0
%
 
675,738

 
100.0
%
Total rehabilitation loans
2,828,321

 
 
 
2,390,102

 
 
 
895,831

 
 
Total federally insured loans
$
24,792,577

 
 
 
$
24,969,846

 
 
 
$
22,615,608

 
 
Bonds and Notes Payable
Bonds and Notes Payable
 Bonds and Notes Payable

The following tables summarize the Company’s outstanding debt obligations by type of instrument:
 
As of September 30, 2013
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
22,632,522

 
0.27% - 6.90%
 
11/25/15 - 8/26/52
Bonds and notes based on auction or remarketing
890,500

 
0.08% - 2.13%
 
5/1/28 - 5/25/42
Total variable-rate bonds and notes
23,523,022

 
 
 
 
FFELP warehouse facilities
1,277,650

 
0.18% - 0.28%
 
1/17/16 - 6/12/16
Unsecured line of credit
75,000

 
1.68%
 
3/28/18
Unsecured debt - Junior Subordinated Hybrid Securities
99,232

 
3.62%
 
9/15/61
Other borrowings
61,828

 
1.68% - 5.10%
 
11/14/13 - 11/11/15
 
25,036,732

 
 
 
 
Discount on bonds and notes payable
(178,277
)
 
 
 
 
Total
$
24,858,455

 
 
 
 
 
As of December 31, 2012
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
21,185,140

 
0.32% - 6.90%
 
11/25/15 - 8/26/52
Bonds and notes based on auction or remarketing
969,925

 
0.15% - 2.14%
 
5/1/28 - 5/25/42
Total variable-rate bonds and notes
22,155,065

 
 
 
 
FFELP warehouse facilities
1,554,151

 
0.21% - 0.29%
 
1/31/15 - 6/30/15
Department of Education Conduit
1,344,513

 
0.82%
 
1/19/14
Unsecured line of credit
55,000

 
1.71%
 
2/17/16
Unsecured debt - Junior Subordinated Hybrid Securities
99,232

 
3.68%
 
9/15/61
Other borrowings
62,904

 
1.50% - 5.10%
 
11/14/13 - 11/11/15
 
25,270,865

 
 
 
 
Discount on bonds and notes payable
(172,030
)
 
 
 
 
Total
$
25,098,835

 
 
 
 


FFELP Warehouse Facilities

The Company funds a portion of its FFELP loan acquisitions using its FFELP warehouse facilities. Student loan warehousing allows the Company to buy and manage student loans prior to transferring them into more permanent financing arrangements.

As of September 30, 2013, the Company had four FFELP warehouse facilities as summarized below.
 
 
NHELP-I (a)
 
NHELP-III (b)
 
NHELP-II (c)
 
NFSLW-I (d)
 
Total
Maximum financing amount
 
$
500,000

 
750,000

 
500,000

 
500,000

 
2,250,000

Amount outstanding
 

 
637,770

 
373,258

 
266,622

 
1,277,650

Amount available
 
$
500,000

 
112,230

 
126,742

 
233,378

 
972,350

Expiration of liquidity provisions
 


 
January 16, 2014

 
February 28, 2014

 
June 12, 2014

 
 
Final maturity date
 


 
January 17, 2016

 
February 28, 2016

 
June 12, 2016

 
 
Maximum advance rates
 
 
 
92.2 - 95%

 
84.5 - 94.5%

 
92 - 98%

 
 
Minimum advance rates
 
 
 
92.2 - 95%

 
84.5 - 94.5%

 
84 - 90%

 
 
Advanced as equity support
 
$

 
36,926

 
33,863

 
11,647

 
82,436


(a)
On October 1, 2013, the Company terminated this facility. All loans previously financed in this facility were financed in other warehouse facilities during the third quarter of 2013.
(b)
The Company entered into this facility on January 16, 2013. On September 16, 2013, the Company amended this facility to increase the maximum financing amount from $500 million to $750 million.
(c)
On June 3, 2013, the Company amended this facility to change the terms of the advance rates.

(d)
On June 13, 2013, the Company amended this facility to change the terms of the advance rates and extend the expiration of the liquidity provisions and its final maturity date.

Each FFELP warehouse facility is supported by 364-day liquidity provisions, which are subject to the respective expiration date shown in the previous table. In the event the Company is unable to renew the liquidity provisions by such date, the facility would become a term facility at a stepped-up cost, with no additional student loans being eligible for financing, and the Company would be required to refinance the existing loans in the facility by the facility's final maturity date. The NFSLW-I warehouse facility provides for formula-based advance rates, depending on FFELP loan type, up to a maximum of the principal and interest of loans financed as shown in the table above. The advance rates for collateral may increase or decrease based on market conditions, but they are subject to minimums as disclosed above. The NHELP-III and NHELP-II warehouse facilities have static advance rates that require initial equity for loan funding, but do not require increased equity based on market movements.

The FFELP warehouse facilities contain financial covenants relating to levels of the Company’s consolidated net worth, ratio of recourse indebtedness to adjusted EBITDA, and unencumbered cash. Any noncompliance with these covenants could result in a requirement for the immediate repayment of any outstanding borrowings under the facilities.

Asset-backed Securitizations

The following table summarizes the asset-backed securitization transactions completed during the nine months ended September 30, 2013.
 
 
2013-1
 
2013-2 (a)
 
2013-3
 
2013-4
 
2013-5 (a)
 
Total
Date securities issued
 
1/31/13
 
2/28/13
 
4/30/13
 
6/21/13
 
9/30/13
 
 
Total original principal amount
 
$
437,500

 
1,122,000

 
765,000

 
453,000

 
399,000

 
$
3,176,500

 
 
 
 
 
 
 
 
 
 
 
 
 
Class A senior notes:
 
 
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
$
428,000

 
1,122,000

 
745,000

 
440,000

 
399,000

 
3,134,000

Bond discount
 

 
(3,325
)
 

 
(1,690
)
 
(4,881
)
 
(9,896
)
Issue price
 
$
428,000

 
1,118,675

 
745,000

 
438,310

 
394,119

 
3,124,104

Cost of funds (1-month LIBOR plus:)
 
0.60
%
 
0.50
%
 
0.50
%
 
0.50
%
 
0.63
%
 
 
Final maturity date
 
6/25/41

 
7/25/40

 
2/25/37

 
12/26/42

 
1/25/37

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class B subordinated notes:
 
 
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
$
9,500

 
 
 
20,000

 
13,000

 
 
 
42,500

Bond discount
 
(1,525
)
 
 
 
(1,762
)
 
(1,804
)
 
 
 
(5,091
)
Issue price
 
$
7,975

 
 
 
18,238

 
11,196

 
 
 
37,409

Cost of funds (1-month LIBOR plus:)
 
1.50
%
 
 
 
1.50
%
 
1.50
%
 
 
 
 
Final maturity date
 
3/25/48

 
 
 
7/25/47

 
1/25/47

 
 
 
 

(a)
Total original principal amount excludes the Class B subordinated tranches for the 2013-2 and 2013-5 transactions totaling $34.0 million and $9.0 million, respectively, that were retained at issuance. As of September 30, 2013, the Company has a total of $85.5 million (face amount) of its own Class B subordinated notes remaining from prior completed asset-backed securitizations that are not included in the Company's consolidated balance sheet.

Department of Education Conduit

In May 2009, the U.S. Department of Education (the "Department") implemented a program under which it financed eligible FFELP loans in a conduit vehicle established to provide funding for student lenders (the "Conduit Program").  As of December 31, 2012, the Company had $1.3 billion borrowed under this facility. On February 28, 2013, all student loans funded in the Conduit Program were refinanced in the 2013-2 asset-backed securitization and the Company's FFELP warehouse facilities. After these transactions, no loans remained financed by the Company in the Conduit Program and the facility was paid down in full. No additional loans can be financed in this facility, and the Conduit Program has expired for future use by the Company.

Unsecured Line of Credit

On February 17, 2012, the Company entered into a $250.0 million unsecured line of credit. On March 28, 2013, the facility was amended to increase the line of credit to $275.0 million and extend the maturity date from February 17, 2016 to March 28, 2018. There were no significant financial covenant changes made as part of this amendment. As of September 30, 2013, $75.0 million was outstanding on the unsecured line of credit and $200.0 million was available for future use.

Debt Repurchases

The Company repurchased $15.4 million (face amount) and $4.1 million (face amount) of its own asset-backed debt securities during the three months ended September 30, 2013 and 2012, respectively, and recognized gains on such purchases of $2.1 million and $0.2 million, respectively. During the nine months ended September 30, 2013 and 2012, the Company repurchased $84.7 million (face amount) and $21.7 million (face amount) of its own asset-backed debt securities and recognized gains of $10.9 million and $1.1 million, respectively.
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments

The Company uses derivative financial instruments primarily to manage interest rate risk and foreign currency exchange risk.

Interest Rate Risk

The Company is exposed to interest rate risk in the form of basis risk and repricing risk because the interest rate characteristics of the Company's assets do not match the interest rate characteristics of the funding for those assets. The Company has adopted a policy of periodically reviewing the mismatch related to the interest rate characteristics of its assets and liabilities together with the Company's outlook as to current and future market conditions. Based on those factors, the Company uses derivative instruments as part of its overall risk management strategy. Derivative instruments used as part of the Company's interest rate risk management strategy currently include basis swaps and interest rate swaps.

Basis Swaps

Interest earned on the majority of the Company's FFELP student loan assets is indexed to the one-month LIBOR rate.  Meanwhile, the Company funds the majority of its assets with three-month LIBOR indexed floating rate securities.  The different interest rate characteristics of the Company's loan assets and liabilities funding these assets results in basis risk.

The Company also faces repricing risk due to the timing of the interest rate resets on its liabilities, which may occur as infrequently as once a quarter, in contrast to the timing of the interest rate resets on its assets, which generally occur daily. As of September 30, 2013, the Company had $23.7 billion and $1.0 billion of FFELP loans indexed to the one-month LIBOR rate and the three-month treasury bill rate, respectively, the indices for which reset daily, and $15.2 billion of debt indexed to three-month LIBOR, the indices for which reset quarterly, and $8.1 billion of debt indexed to one-month LIBOR, the indices for which reset monthly.

The Company has used derivative instruments to economically hedge its basis and repricing risk.  The Company has entered into basis swaps in which the Company receives three-month LIBOR set discretely in advance and pays one-month LIBOR plus or minus a spread as defined in the agreements (the 1:3 Basis Swaps).

The following table summarizes the Company’s 1:3 Basis Swaps outstanding:
 
 
 
 
 
As of September 30, 2013
 
As of December 31, 2012
 
 
Maturity
 
Notional amount
 
Notional amount
 
 
2021
 
 
$
250,000

 
250,000

 
 
2022
 
 
1,900,000

 
1,900,000

 
 
2023
 
 
3,650,000

 
3,150,000

 
 
2024
 
 
250,000

 
250,000

 
 
2026
 
 
800,000

 
800,000

 
 
2028
 
 
100,000

 
100,000

 
 
2036
 
 
700,000

 
700,000

 
 
2039
(a)
 
150,000

 
150,000

 
 
2040
(b)
 
200,000

 
200,000

 
 
 
 
 
$
8,000,000

(c)
7,500,000

(c)
(a)This derivative has a forward effective start date in 2015.
(b)This derivative has a forward effective start date in 2020.
(c)
The weighted average rate paid by the Company on the 1:3 Basis Swaps as of September 30, 2013 and December 31, 2012, was one-month LIBOR plus 3.5 basis points and one-month LIBOR plus 3.3 basis points, respectively.
Interest Rate Swaps – Floor Income Hedges

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 Payments ("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 student loan portfolio with variable rate debt. In low and/or certain declining interest rate environments, when the fixed borrower rate is higher than the SAP rate, these 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.

Absent the use of derivative instruments, a rise in interest rates may reduce the amount of floor income received and this may have 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.

As of September 30, 2013 and December 31, 2012, the Company had $11.2 billion and $11.3 billion, respectively, of student loan assets that were earning fixed rate floor income. The weighted average estimated variable conversion rate for these loans, which is the estimated short-term interest rate at which the loans would convert to a variable rate, was 1.82%.

The following table summarizes the outstanding derivative instruments used by the Company to economically hedge loans earning fixed rate floor income.
 
 
As of September 30, 2013
 
As of December 31, 2012
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
 
 
 
2013
 
$

 
%
 
$
3,150,000

 
0.71
%
2014
 
1,750,000

 
0.71

 
1,750,000

 
0.71

2015
 
1,100,000

 
0.89

 
1,100,000

 
0.89

2016
 
750,000

 
0.85

 
750,000

 
0.85

2017
 
1,250,000

 
0.86

 
750,000

 
0.99

 
 
$
4,850,000

 
0.81
%
 
$
7,500,000

 
0.78
%

(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.
Interest Rate Swaps – Unsecured Debt Hedges

As of both September 30, 2013 and December 31, 2012, the Company had $99.2 million of unsecured Junior Subordinated Hybrid Securities debt outstanding. The interest rate on the Hybrid Securities through September 29, 2036 is equal to three-month LIBOR plus 3.375%, payable quarterly. The Company had the following derivatives outstanding that are used to effectively convert the variable interest rate on a portion of the Hybrid Securities to a fixed rate of 7.7%.
 
 
 
As of September 30, 2013
 
As of December 31, 2012
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
2036
 
$
25,000

 
4.28
%
 
$
75,000

 
4.28
%
(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.

Foreign Currency Exchange Risk

In 2006, the Company issued €420.5 million and €352.7 million of student loan asset-backed Euro Notes with interest rates based on a spread to the EURIBOR index. As a result of these transactions, the Company is exposed to market risk related to fluctuations in foreign currency exchange rates between the U.S. dollar and Euro. The principal and accrued interest on these notes are re-measured at each reporting period and recorded in the Company’s consolidated balance sheet in U.S. dollars based on the foreign currency exchange rate on that date. Changes in the principal and accrued interest amounts as a result of foreign currency exchange rate fluctuations are included in the Company’s consolidated statements of income.

The Company entered into cross-currency interest rate swaps in connection with the issuance of the Euro Notes. Under the terms of these derivative instrument agreements, the Company receives from a counterparty a spread to the EURIBOR index based on notional amounts of €420.5 million and €352.7 million and pays a spread to the LIBOR index based on notional amounts of $500.0 million and $450.0 million, respectively. In addition, under the terms of these agreements, all principal payments on the Euro Notes will effectively be paid at the exchange rate between the U.S. dollar and Euro in effect as of the issuance of the notes.

The following table shows the income statement impact as a result of the re-measurement of the Euro Notes and the change in the fair value of the related derivative instruments.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Re-measurement of Euro Notes
$
(39,974
)
 
(20,799
)
 
(25,902
)
 
6,186

Change in fair value of cross-currency interest rate swaps
39,074

 
24,586

 
18,978

 
(24,934
)
Total impact to consolidated statements of income - income (expense) (a)
$
(900
)
 
3,787

 
(6,924
)
 
(18,748
)
(a)
The financial statement impact of the above items is included in "Derivative market value and foreign currency adjustments and derivative settlements, net" in the Company's consolidated statements of income.
The re-measurement of the Euro-denominated bonds generally correlates with the change in fair value of the cross-currency interest rate swaps. However, the Company will experience unrealized gains or losses related to the cross-currency interest rate swaps if the two underlying indices (and related forward curve) do not move in parallel.

Consolidated Financial Statement Impact Related to Derivatives

The following table summarizes the fair value of the Company’s derivatives as reflected in the consolidated balance sheets:
 
Fair value of asset derivatives
 
Fair value of liability derivatives
 
As of
 
As of
 
As of
 
As of
 
September 30,
2013
 
December 31,
2012
 
September 30,
2013
 
December 31,
2012
1:3 basis swaps
$
20,425

 
12,239

 

 
1,215

Interest rate swaps - floor income hedges
6,032

 

 
18,186

 
45,913

Interest rate swaps - hybrid debt hedges

 

 
3,327

 
23,762

Cross-currency interest rate swaps
101,819


82,841

 

 

Other

 
2,361

 

 

Total
$
128,276

 
97,441

 
21,513

 
70,890



During the three and nine months ended September 30, 2013, the Company terminated certain derivatives for net payments of $2.7 million and $6.5 million, respectively. During the three and nine months ended September 30, 2012, the Company paid $6.4 million to terminate certain derivatives. Any proceeds received or payments made to terminate a derivative in advance of its expiration date are accounted for as a change in fair value of such derivative.

Offsetting of Derivative Assets/Liabilities

The Company records derivative instruments in the consolidated balance sheets on a gross basis as either an asset or liability measured at its fair value. Certain of the Company's derivative instruments are subject to right of offset provisions with counterparties. The following tables include the gross amounts related to the Company's derivative portfolio recognized in the consolidated balance sheets, reconciled to the net amount when excluding derivatives subject to enforceable master netting arrangements and cash collateral received/pledged:
 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative assets
 
Gross amounts of recognized assets presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral received (a)
 
Net asset (liability)
Balance as of September 30, 2013
 
$
128,276

 
(17,991
)
 
(73,734
)
 
36,551

Balance as of December 31, 2012
 
97,441

 
(13,234
)
 
(19,993
)
 
64,214


 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative liabilities
 
Gross amounts of recognized liabilities presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral pledged (b)
 
Net asset (liability)
Balance as of September 30, 2013
 
$
(21,513
)
 
17,991

 
4,000

 
478

Balance as of December 31, 2012
 
(70,890
)
 
13,234

 
63,128

 
5,472



(a)
As of September 30, 2013 and December 31, 2012, the trustee for certain of the Company's asset-backed securitization transactions held $73.7 million and $20.0 million, respectively, of collateral from the counterparty on the cross-currency interest rate swaps.

(b)
As of September 30, 2013 and December 31, 2012, the Company had $4.0 million and $63.1 million, respectively, posted as collateral to derivative counterparties, which is included in “restricted cash and investments” in the Company's consolidated balance sheet.

The following table summarizes the effect of derivative instruments in the consolidated statements of income.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Settlements:
 

 
 

 
 

 
 

1:3 basis swaps
$
781

 
1,100

 
2,474

 
3,651

Interest rate swaps - floor income hedges
(7,178
)
 
(5,595
)
 
(24,017
)
 
(12,237
)
Interest rate swaps - hybrid debt hedges
(256
)
 
(733
)
 
(1,413
)
 
(1,479
)
Cross-currency interest rate swaps
(35
)
 
227

 
(273
)
 
3,390

Other

 
(50
)
 

 
(235
)
Total settlements - income (expense)
(6,688
)
 
(5,051
)
 
(23,229
)
 
(6,910
)
Change in fair value:
 

 
 

 
 

 
 

1:3 basis swaps
(2,161
)
 
(4,578
)
 
9,402

 
(2,005
)
Interest rate swaps - floor income hedges
(9,599
)
 
(29,903
)
 
33,231

 
(41,681
)
Interest rate swaps - hybrid debt hedges
2,700

 
1,695

 
11,790

 
(890
)
Cross-currency interest rate swaps
39,074

 
24,586

 
18,978

 
(24,934
)
Other

 
2,775

 
342

 
2,161

Total change in fair value - income (expense)
30,014

 
(5,425
)
 
73,743

 
(67,349
)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
(39,974
)
 
(20,799
)
 
(25,902
)
 
6,186

Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense)
$
(16,648
)
 
(31,275
)
 
24,612

 
(68,073
)
Investments
Investments
Investments

A summary of the Company's investments and restricted investments follows:
 
As of September 30, 2013
 
As of December 31, 2012
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses (a)
 
Fair value
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
 
 
 
 
 
 
 
 
Investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities (b)
$
211,548

 
8,535

 
(968
)
 
219,115

 
64,970

 
3,187

 
(179
)
 
67,978

Equity securities
1,550

 
1,519

 
(5
)
 
3,064

 
3,449

 
1,604

 
(180
)
 
4,873

Total available-for-sale investments
$
213,098

 
10,054

 
(973
)
 
222,179

 
68,419

 
4,791

 
(359
)
 
72,851

Trading investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities
 
 
 
 
 
 
10,484

 
 
 
 
 
 
 
10,461

Total available-for-sale and trading investments

 

 

 
$
232,663

 
 
 
 
 


 
83,312

Restricted Investments (c):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guaranteed investment contracts - held-to-maturity
 
 
 
 
 
 
$
6,724

 
 
 
 
 
 
 
8,830


    
(a)
As of September 30, 2013, the Company considered the decline in market value of its available-for-sale investments to be temporary in nature and did not consider any of its investments other-than-temporarily impaired.

(b)
As of September 30, 2013, the stated maturities of the majority of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years.

(c)
Restricted investments are included in "restricted cash and investments" in the Company's consolidated balance sheets.

The amounts reclassified from accumulated other comprehensive income related to the realized gains and losses on available-for-sale-securities is summarized below.
 
 
Three months ended September 30,
 
Nine months ended September 30,
Affected line item in the consolidated statements of income - income (expense):
 
2013
 
2012
 
2013
 
2012
Other income
 
$
730

 
2,618

 
2,246

 
4,848

Income tax expense
 
(270
)
 
(969
)
 
(831
)
 
(1,794
)
Net
 
$
460

 
1,649

 
1,415

 
3,054

Income Taxes
Income Tax Disclosure [Text Block]
6.   Income Taxes

The effective tax rate for the three months ended September 30, 2013 and 2012 was 32.6% and 37.2%, respectively, and was 34.8% and 33.0% for the nine months ended September 30, 2013 and 2012, respectively. During the third quarter of 2013, income tax expense was reduced by $4.1 million due to the resolution of various uncertain tax positions relating primarily to prior years resulting from examination closings and lapse of applicable statute of limitations. In addition, the Company reversed $1.3 million ($0.8 million after tax) of interest expense during the third quarter of 2013 related to the resolution of certain tax positions. The reversal of interest expense reduced "interest on bonds and notes payable" in the accompanying consolidated statement of income. During the second quarter of 2012, state income tax laws were enacted that reduced the Company's income tax expense during the second quarter by $4.6 million.
Earnings per Common Share
Earnings Per Common Share
Earnings per Common Share

Presented below is a summary of 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.
 
Three months ended September 30,
 
2013
 
2012
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
62,277

 
553

 
62,830

 
36,538

 
290

 
36,828

 
 
 
 
 


 
 
 
 
 
 
Denominator:


 


 


 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
46,086,743

 
409,869

 
46,496,612

 
47,086,182

 
374,126

 
47,460,308

Earnings per share - basic and diluted
$
1.35

 
1.35

 
1.35

 
0.78

 
0.78

 
0.78



 
Nine months ended September 30,
 
2013
 
2012
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
230,141

 
2,011

 
232,152

 
120,452

 
911

 
121,363

 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
46,189,200

 
404,041

 
46,593,241

 
47,042,062

 
357,145

 
47,399,207

Earnings per share - basic and diluted
$
4.98

 
4.98

 
4.98

 
2.56

 
2.56

 
2.56



Unvested restricted stock awards are the Company's only potential common shares and, accordingly, there were no awards that were antidilutive and not included in average shares outstanding for the diluted earnings per share calculation.

As of September 30, 2013, a cumulative amount of 127,129 shares have been deferred by non-employee directors under the Directors Stock Compensation Plan and will become issuable upon the termination of service by the respective non-employee director on the board of directors. These shares are included in the Company's weighted average shares outstanding calculation.
Segment Reporting
Segment Reporting
Segment Reporting

The Company earns fee-based revenue through its Student Loan and Guaranty Servicing, Tuition Payment Processing and Campus Commerce, and Enrollment Services operating segments. In addition, the Company earns net interest income on its student loan portfolio in its Asset Generation and Management operating segment. The Company’s operating segments are defined by the products and services they offer and the types of customers they serve, and they reflect the manner in which financial information is currently evaluated by management. See note 1 of the notes to the consolidated financial statements included in the 2012 Annual Report for a description of each operating segment, including the primary products and services offered.

The management reporting process measures the performance of the Company’s operating segments based on the management structure of the Company, as well as the methodology used by management to evaluate performance and allocate resources. Executive management (the "chief operating decision maker") evaluates the performance of the Company’s operating segments based on their financial results prepared in conformity with U.S. generally accepted accounting principles.  

The accounting policies of the Company’s operating segments are the same as those described in note 2 of the notes to the consolidated financial statements included in the 2012 Annual Report. Intersegment revenues are charged by the segment that provides a product or service to another segment.  Intersegment revenues and expenses are included within each segment consistent with the income statement presentation provided to management.  Changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial information. Income taxes are allocated based on 38% of income (loss) before taxes for each individual operating segment. The difference between the consolidated income tax expense and the sum of taxes calculated for each operating segment is included in income taxes in Corporate Activity and Overhead.

Corporate Activity and Overhead

Corporate Activity and Overhead includes the following items:

The operating results of Whitetail Rock Capital Management, LLC ("WRCM"), the Company's SEC-registered investment advisory subsidiary
Income earned on certain investment activities
Interest expense incurred on unsecured debt transactions
Other product and service offerings that are not considered operating segments

Corporate Activity and Overhead also includes certain corporate activities and overhead functions related to executive management, human resources, accounting, legal, occupancy, and marketing. These costs are allocated to each operating segment based on estimated use of such activities and services.

Segment Results of Operations

The following tables include the results of each of the Company's operating segments reconciled to the consolidated financial statements.
 
Three months ended September 30, 2013
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
10

 

 

 
10

 
158,793

 
2,201

 
(767
)
 
160,237

Interest expense

 

 

 

 
56,100

 
(18
)
 
(767
)
 
55,315

Net interest income (loss)
10

 

 

 
10

 
102,693

 
2,219

 

 
104,922

Less provision for loan losses

 

 

 

 
5,000

 

 

 
5,000

Net interest income (loss) after provision for loan losses
10

 

 

 
10

 
97,693

 
2,219

 

 
99,922

Other income (expense):
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
64,582

 

 

 
64,582

 

 

 

 
64,582

Intersegment servicing revenue
13,519

 

 

 
13,519

 

 

 
(13,519
)
 

Tuition payment processing and campus commerce revenue

 
19,927

 

 
19,927

 

 

 

 
19,927

Enrollment services revenue

 

 
22,563

 
22,563

 

 

 

 
22,563

Other income

 

 

 

 
3,981

 
4,632

 

 
8,613

Gain on sale of loans and debt repurchases

 

 

 

 
2,138

 

 

 
2,138

Derivative market value and foreign currency adjustments, net

 

 

 

 
(12,660
)
 
2,700

 

 
(9,960
)
Derivative settlements, net

 

 

 

 
(6,432
)
 
(256
)
 

 
(6,688
)
Total other income (expense)
78,101

 
19,927

 
22,563

 
120,591

 
(12,973
)
 
7,076

 
(13,519
)
 
101,175

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
29,719

 
9,229

 
4,491

 
43,439

 
555

 
4,718

 

 
48,712

Cost to provide enrollment services

 

 
14,668

 
14,668

 

 

 

 
14,668

Depreciation and amortization
2,677

 
1,117

 
57

 
3,851

 

 
489

 

 
4,340

Other
19,752

 
1,908

 
1,556

 
23,216

 
7,939

 
8,732

 

 
39,887

Intersegment expenses, net
1,457

 
1,431

 
1,139

 
4,027

 
13,705

 
(4,213
)
 
(13,519
)
 

Total operating expenses
53,605

 
13,685

 
21,911

 
89,201

 
22,199

 
9,726

 
(13,519
)
 
107,607

Income (loss) before income taxes and corporate overhead allocation
24,506

 
6,242

 
652

 
31,400

 
62,521

 
(431
)
 

 
93,490

Corporate overhead allocation
(1,822
)
 
(607
)
 
(607
)
 
(3,036
)
 
(1,302
)
 
4,338

 

 

Income (loss) before income taxes
22,684

 
5,635

 
45

 
28,364

 
61,219

 
3,907

 

 
93,490

Income tax (expense) benefit
(8,620
)
 
(2,141
)
 
(17
)
 
(10,778
)
 
(23,263
)
 
3,597

 

 
(30,444
)
Net income (loss)
14,064

 
3,494

 
28

 
17,586

 
37,956

 
7,504

 

 
63,046

  Net income attributable to noncontrolling interest

 

 

 

 

 
216

 

 
216

Net income (loss) attributable to Nelnet, Inc.
$
14,064

 
3,494

 
28

 
17,586

 
37,956

 
7,288

 

 
62,830

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended September 30, 2012
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
12

 
3

 

 
15

 
150,661

 
1,891

 
(899
)
 
151,668

Interest expense

 

 

 

 
64,829

 
2,472

 
(899
)
 
66,402

Net interest income (loss)
12

 
3

 

 
15

 
85,832

 
(581
)
 

 
85,266

Less provision for loan losses

 

 

 

 
5,000

 

 

 
5,000

Net interest income (loss) after provision for loan losses
12

 
3

 

 
15

 
80,832

 
(581
)
 

 
80,266

Other income (expense):
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
53,285

 

 

 
53,285

 

 

 

 
53,285

Intersegment servicing revenue
15,855

 

 

 
15,855

 

 

 
(15,855
)
 

Tuition payment processing and campus commerce revenue

 
17,928

 

 
17,928

 

 

 

 
17,928

Enrollment services revenue

 

 
30,661

 
30,661

 

 

 

 
30,661

Other income

 

 

 

 
5,834

 
6,865

 

 
12,699

Gain on sale of loans and debt repurchases

 

 

 

 
195

 

 

 
195

Derivative market value and foreign currency adjustments, net

 

 

 

 
(30,694
)
 
4,470

 

 
(26,224
)
Derivative settlements, net

 

 

 

 
(4,319
)
 
(732
)
 

 
(5,051
)
Total other income (expense)
69,140

 
17,928

 
30,661

 
117,729

 
(28,984
)
 
10,603

 
(15,855
)
 
83,493

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
27,716

 
8,578

 
5,147

 
41,441

 
462

 
4,492

 

 
46,395

Cost to provide enrollment services

 

 
20,151

 
20,151

 

 

 

 
20,151

Depreciation and amortization
4,691

 
1,703

 
1,633

 
8,027

 

 
375

 

 
8,402

Other
16,775

 
2,285

 
1,782

 
20,842

 
3,451

 
5,696

 

 
29,989

Intersegment expenses, net
1,262

 
1,379

 
1,000

 
3,641

 
16,064

 
(3,850
)
 
(15,855
)
 

Total operating expenses
50,444

 
13,945

 
29,713

 
94,102

 
19,977

 
6,713

 
(15,855
)
 
104,937

Income (loss) before income taxes and corporate overhead allocation
18,708

 
3,986

 
948

 
23,642

 
31,871

 
3,309

 

 
58,822

Corporate overhead allocation
(1,337
)
 
(446
)
 
(446
)
 
(2,229
)
 
(909
)
 
3,138

 

 

Income (loss) before income taxes
17,371

 
3,540

 
502

 
21,413

 
30,962

 
6,447

 

 
58,822

Income tax (expense) benefit
(6,601
)
 
(1,345
)
 
(191
)
 
(8,137
)
 
(11,765
)
 
(1,968
)
 

 
(21,870
)
Net income (loss)
10,770

 
2,195

 
311

 
13,276

 
19,197

 
4,479

 

 
36,952

  Net income attributable to noncontrolling interest

 

 

 

 

 
124

 

 
124

Net income (loss) attributable to Nelnet, Inc.
$
10,770

 
2,195

 
311

 
13,276

 
19,197

 
4,355

 

 
36,828

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2013
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
29

 

 

 
29

 
472,622

 
6,708

 
(2,420
)
 
476,939

Interest expense

 

 

 

 
170,502

 
3,718

 
(2,420
)
 
171,800

Net interest income (loss)
29

 

 

 
29

 
302,120

 
2,990

 

 
305,139

Less provision for loan losses

 

 

 

 
15,000

 

 

 
15,000

Net interest income (loss) after provision for loan losses
29

 

 

 
29

 
287,120

 
2,990

 

 
290,139

Other income (expense):
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
180,261

 

 

 
180,261

 

 

 

 
180,261

Intersegment servicing revenue
42,375

 

 

 
42,375

 

 

 
(42,375
)
 

Tuition payment processing and campus commerce revenue

 
61,694

 

 
61,694

 

 

 

 
61,694

Enrollment services revenue

 

 
76,343

 
76,343

 

 

 

 
76,343

Other income

 

 

 

 
11,207

 
19,110

 

 
30,317

Gain on sale of loans and debt repurchases

 

 

 

 
10,900

 

 

 
10,900

Derivative market value and foreign currency adjustments, net

 

 

 

 
35,711

 
12,130

 

 
47,841

Derivative settlements, net

 

 

 

 
(21,816
)
 
(1,413
)
 

 
(23,229
)
Total other income (expense)
222,636

 
61,694

 
76,343

 
360,673

 
36,002

 
29,827

 
(42,375
)
 
384,127

Operating expenses:
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 

Salaries and benefits
86,254

 
28,015

 
15,067

 
129,336

 
1,709

 
13,004

 

 
144,049

Cost to provide enrollment services

 

 
51,097

 
51,097

 

 

 

 
51,097

Depreciation and amortization
8,197

 
3,387

 
179

 
11,763

 

 
1,274

 

 
13,037

Other
56,173

 
6,387

 
4,450

 
67,010

 
23,375

 
18,808

 

 
109,193

Intersegment expenses, net
3,243

 
4,350

 
3,418

 
11,011

 
42,955

 
(11,591
)
 
(42,375
)
 

Total operating expenses
153,867

 
42,139

 
74,211

 
270,217

 
68,039

 
21,495

 
(42,375
)
 
317,376

Income (loss) before income taxes and corporate overhead allocation
68,798

 
19,555

 
2,132

 
90,485

 
255,083

 
11,322

 

 
356,890

Corporate overhead allocation
(4,332
)
 
(1,443
)
 
(1,443
)
 
(7,218
)
 
(3,095
)
 
10,313

 

 

Income (loss) before income taxes
64,466

 
18,112

 
689

 
83,267

 
251,988

 
21,635

 

 
356,890

Income tax (expense) benefit
(24,498
)
 
(6,882
)
 
(261
)
 
(31,641
)
 
(95,755
)
 
3,759

 

 
(123,637
)
Net income (loss)
39,968

 
11,230

 
428

 
51,626

 
156,233

 
25,394

 

 
233,253

  Net income attributable to noncontrolling interest

 

 

 

 

 
1,101

 

 
1,101

Net income (loss) attributable to Nelnet, Inc.
$
39,968

 
11,230

 
428

 
51,626

 
156,233

 
24,293

 

 
232,152

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2012
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
44

 
8

 

 
52

 
455,413

 
5,226

 
(2,827
)
 
457,864

Interest expense

 

 

 

 
199,675

 
6,327

 
(2,827
)
 
203,175

Net interest income (loss)
44

 
8

 

 
52

 
255,738

 
(1,101
)
 

 
254,689

Less provision for loan losses

 

 

 

 
18,000

 

 

 
18,000

Net interest income (loss) after provision for loan losses
44

 
8

 

 
52

 
237,738

 
(1,101
)
 

 
236,689

Other income (expense):
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
155,164

 

 

 
155,164

 

 

 

 
155,164

Intersegment servicing revenue
49,210

 

 

 
49,210

 

 

 
(49,210
)
 

Tuition payment processing and campus commerce revenue

 
56,675

 

 
56,675

 

 

 

 
56,675

Enrollment services revenue

 

 
92,035

 
92,035

 

 

 

 
92,035

Other income

 

 

 

 
14,415

 
18,038

 

 
32,453

Gain on sale of loans and debt repurchases

 

 

 

 
1,130

 

 

 
1,130

Derivative market value and foreign currency adjustments, net

 

 

 

 
(62,351
)
 
1,188

 

 
(61,163
)
Derivative settlements, net

 

 

 

 
(5,431
)
 
(1,479
)
 

 
(6,910
)
Total other income (expense)
204,374

 
56,675

 
92,035

 
353,084

 
(52,237
)
 
17,747

 
(49,210
)
 
269,384

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
85,663

 
25,771

 
17,587

 
129,021

 
1,723

 
13,449

 

 
144,193

Cost to provide enrollment services

 

 
62,203

 
62,203

 

 

 

 
62,203

Depreciation and amortization
13,629

 
5,174

 
4,867

 
23,670

 

 
1,094

 

 
24,764

Other
52,980

 
7,557

 
5,483

 
66,020

 
10,203

 
16,937

 

 
93,160

Intersegment expenses, net
3,832

 
4,042

 
2,824

 
10,698

 
49,842

 
(11,330
)
 
(49,210
)
 

Total operating expenses
156,104

 
42,544

 
92,964

 
291,612

 
61,768

 
20,150

 
(49,210
)
 
324,320

Income (loss) before income taxes and corporate overhead allocation
48,314

 
14,139

 
(929
)
 
61,524

 
123,733

 
(3,504
)
 

 
181,753

Corporate overhead allocation
(4,115
)
 
(1,372
)
 
(1,372
)
 
(6,859
)
 
(3,701
)
 
10,560

 

 

Income (loss) before income taxes
44,199

 
12,767

 
(2,301
)
 
54,665

 
120,032

 
7,056

 

 
181,753

Income tax (expense) benefit
(16,796
)
 
(4,851
)
 
874

 
(20,773
)
 
(45,610
)
 
6,405

 

 
(59,978
)
Net income (loss)
27,403

 
7,916

 
(1,427
)
 
33,892

 
74,422

 
13,461

 

 
121,775

  Net income attributable to noncontrolling interest

 

 

 

 

 
412

 

 
412

Net income (loss) attributable to Nelnet, Inc.
$
27,403

 
7,916

 
(1,427
)
 
33,892

 
74,422

 
13,049

 

 
121,363

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Major Customer
Concentration Risk Disclosure [Text Block]
Major Customer

The Company earns loan servicing revenue from a servicing contract with the Department that spans five years (through June 2014).  Revenue earned by the Company's Student Loan and Guaranty Servicing operating segment related to this contract was $26.0 million and $19.1 million for the three months ended September 30, 2013 and 2012, respectively, and $68.4 million and $50.1 million for the nine months ended September 30, 2013 and 2012, respectively. The Department has the option to extend the contract for an additional five years. On October 25, 2013, the Company received a letter from the Department notifying the Company of the Department's intent to exercise its optional ordering period to extend the contract for an additional five years through June 16, 2019, with actual extension subject to the availability of government funds.
Related Party Transactions
Related Party Transactions
Related Party Transactions

The Company has entered into certain contractual arrangements with related parties as described in note 19 of the notes to the consolidated financial statements included in the Company's 2012 Annual Report.  The following provides an update for related party transactions that have occurred during the first nine months of 2013.

Investment Advisory Services

On February 1, 2013, WRCM established a third private investment fund (“SLABS Fund III”) for the primary purpose of investing and trading in student loan asset-backed securities, and engaging in financial transactions related thereto.  The initial amount invested in SLABS Fund III was $34.5 million, and Michael S. Dunlap, Chief Executive Officer, Chairman, and a significant shareholder of the Company, Angela L. Muhleisen (who is a sister of Mr. Dunlap, as well as Director, Chairperson, President, and Chief Executive Officer of Union Bank and Trust Company ("Union Bank"), an entity under common control with the Company), and WRCM made initial investments in the fund in the amounts of $3.0 million, $2.0 million, and $0.1 million, respectively.  The management agreement for the fund provides non-affiliated limited partners the ability to remove WRCM as manager of the fund without cause. WRCM earns 50 basis points (annually) from SLABS Fund III on the outstanding balance of the investments in the fund, of which WRCM pays approximately 50 percent of such amount to Union Bank as custodian.  In addition, WRCM earns up to 50 percent of the gains from the sale of securities from the fund.  As of September 30, 2013, the outstanding balance of investments in SLABS Fund III was $35.0 million.

Loan Purchases

During the third quarter of 2013, the Company purchased FFELP student loans of $478.3 million (face amount) from Union Bank and recorded a total discount of $11.4 million as a result of these purchases.

Mortgage Servicing Agreement

On May 1, 2013, the Company entered into an agreement with Union Bank under which the Company was engaged by Union Bank to assist in performing various duties in connection with the expansion of Union Bank's mortgage loan operations and the servicing of mortgage loans. Per the terms of the agreement, each party will be responsible for 50 percent of all costs incurred directly related to the expansion of the mortgage loan operations. Additionally, each party will be entitled to receive 50 percent of the net income resulting from the mortgage loan operations. Through September 30, 2013, the Company has paid Union Bank approximately $17,000 for its portion of costs incurred related to the expansion of the mortgage loan operations.

Aircraft Purchase

During the second quarter 2013, the Company purchased an aircraft for total consideration of $5.8 million and sold an interest in such aircraft to Union Financial Services, Inc. ("UFS") for $2.0 million. After the completion of this transaction, the Company and UFS own 65 percent and 35 percent of the aircraft, respectively. UFS is owned 50 percent by Mr. Dunlap and 50 percent by Stephen F. Butterfield, Vice Chairman and a member of the Board of Directors of the Company.
Fair Value
Fair Value
Fair Value

The following tables present the Company’s financial assets and liabilities that are measured at fair value on a recurring basis. There were no transfers into or out of level 1, level 2, or level 3 for the nine months ended September 30, 2013.
 
As of September 30, 2013
 
As of December 31, 2012
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
Investments:
 
 
 
 


 
 
 
 
 
 
Student loan asset-backed securities
$

 
229,095

 
229,095

 

 
77,652

 
77,652

Equity securities
3,064

 

 
3,064

 
4,873

 

 
4,873

Debt securities
504

 

 
504

 
787

 

 
787

Total investments
3,568

 
229,095

 
232,663

 
5,660

 
77,652

 
83,312

Fair value of derivative instruments

 
128,276

 
128,276

 

 
97,441

 
97,441

Total assets
$
3,568

 
357,371

 
360,939

 
5,660

 
175,093

 
180,753

Liabilities:
 

 
 

 
 

 
 
 
 
 
 
Fair value of derivative instruments
$

 
21,513

 
21,513

 

 
70,890

 
70,890

Total liabilities
$

 
21,513

 
21,513

 

 
70,890

 
70,890


The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:
 
As of September 30, 2013
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
25,287,320

 
24,701,112

 

 

 
25,287,320

Non-federally insured student loans receivable - held for sale
28,480

 
28,480

 

 

 
28,480

Cash and cash equivalents
51,391

 
51,391

 
51,391

 

 

Investments
232,663

 
232,663

 
3,568

 
229,095

 

Restricted cash
668,202

 
668,202

 
668,202

 

 

Restricted cash – due to customers
93,695

 
93,695

 
93,695

 

 

Restricted investments
6,724

 
6,724

 
6,724

 

 

Accrued interest receivable
303,350

 
303,350

 

 
303,350

 

Derivative instruments
128,276

 
128,276

 

 
128,276

 

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
24,376,185

 
24,858,455

 

 
24,376,185

 

Accrued interest payable
14,218

 
14,218

 

 
14,218

 

Due to customers
93,695

 
93,695

 
93,695

 

 

Derivative instruments
21,513

 
21,513

 

 
21,513

 

 
As of December 31, 2012
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
25,418,623

 
24,830,621

 

 

 
25,418,623

Cash and cash equivalents
66,031

 
66,031

 
66,031

 

 

Investments
83,312

 
83,312

 
5,660

 
77,652

 

Restricted cash
806,632

 
806,632

 
806,632

 

 

Restricted cash – due to customers
96,516

 
96,516

 
96,516

 

 

Restricted investments
8,830

 
8,830

 
8,830

 

 

Accrued interest receivable
307,518

 
307,518

 

 
307,518

 

Derivative instruments
97,441

 
97,441

 

 
97,441

 

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
24,486,008

 
25,098,835

 

 
24,486,008

 

Accrued interest payable
14,770

 
14,770

 

 
14,770

 

Due to customers
96,516

 
96,516

 
96,516

 

 

Derivative instruments
70,890

 
70,890

 

 
70,890

 


 
The methodologies for estimating the fair value of financial assets and liabilities are described in note 20 of the notes to the consolidated financial statements included in the 2012 Annual Report.
Legal Proceedings
Legal Proceedings
Legal Proceedings

General

The Company is subject to various legal proceedings that arise in the normal course of business, including the legal proceedings discussed below. These matters frequently involve claims by student loan borrowers disputing the manner in which their student loans have been serviced or the accuracy of reports to credit bureaus, claims by student loan borrowers or other consumers alleging that state or Federal consumer protection laws have been violated in the process of collecting loans or conducting other business activities, and disputes with other business entities. From time to time, lawsuits may be brought as, or subsequently amended to assert claims in the form of, putative class action cases.

In evaluating each of its legal proceedings, the Company considers many factors that involve significant risks and uncertainties inherent in the overall litigation process, including (i) the amount of damages and the nature of any other relief sought in the proceeding, if specified; (ii) whether the proceeding is at an early stage; (iii) the impact of discovery; (iv) whether novel or unsettled legal theories are at issue; (v) the outcome of pending motions or appeals; (vi) whether there are significant factual issues to be resolved; (vii) whether class action status is sought and the Company's views of the likelihood of a class being certified by the court and the ultimate size of the class; (viii) the jurisdiction in which the proceeding is pending; (ix) the Company's views of the merits of the claims and of the strength of the Company's defenses; and (x) the progress of any negotiations with opposing parties. In assessing whether a legal proceeding may be material, the Company considers these and other quantitative and qualitative factors, including whether disclosure of the proceeding might be important to a reader of the Company's financial statements in light of all of the information about the Company that is available to the reader.

Actions Requesting Certifications of Classes

Proceedings or complaints that involve or ask for certifications of classes generally expand the scope of legal defense costs, as well as alleged potential claim amounts. The Company is currently subject to three legal proceedings in which the plaintiffs have made allegations that one or more putative classes should be certified by the applicable court. It is significant to note that no putative class has actually been certified in any of these proceedings, the Company's position is that class certification would be inappropriate in each such proceeding described below, and the Company intends to vigorously contest such certification. The Company has accrued an immaterial amount related to the legal proceedings described below. However, due to the relatively early stage of these matters and the uncertainty and risks inherent in class determination and the overall litigation process, the Company believes that a meaningful estimate of its exposure to any reasonably possible losses or range of reasonably possible losses, in excess of the amount accrued, cannot currently be made.

Bais Yaakov of Spring Valley v. Peterson's Nelnet, LLC

On January 4, 2011, a complaint against Peterson's Nelnet, LLC (“Peterson's”), a subsidiary of Nelnet, Inc. ("Nelnet"), was filed in the U.S. federal District Court for the District of New Jersey (the “New Jersey District Court”). The complaint alleges that Peterson's sent six advertising faxes to the named plaintiff in 2008-2009 that were not the result of express invitation or permission granted by the plaintiff and did not include certain opt out language. The complaint also alleges that such faxes violated the federal Telephone Consumer Protection Act (the “TCPA”), purportedly entitling the plaintiff to $500 per violation, trebled for willful violations for each of the six faxes. The complaint further alleges that Peterson's had sent putative class members more than 10,000 faxes that violated the TCPA, amounting to more than $5 million in statutory penalty damages and more than $15 million if trebled for willful violations. The complaint seeks to establish a class action. On September 13, 2013, the named plaintiff filed a motion for class certification, and on October 7, 2013, Peterson's filed a motion to dismiss the named plaintiff's motion for class certification. As of the filing date of this report, the New Jersey District Court has not established, recognized, or certified a class. Peterson's intends to continue to contest the suit vigorously.

Than Zaw v. Nelnet, Inc.

On January 18, 2013, a Third Amended Complaint was served on Nelnet in connection with a lawsuit by Than Zaw against Nelnet (erroneously referred to in the lawsuit as Nelnet Business Solutions, Inc.) in the Superior Court of the State of California, Contra Costa County (the “California State Court”). The lawsuit was originally instituted on December 30, 2010, and alleges that Nelnet violated the California Fair Debt Collection Practices Act in its interactions with the plaintiff, a California resident. The plaintiff's Third Amended Complaint added additional allegations claiming that Nelnet violated Section 632 of the California Penal Code by allegedly recording one or more telephone calls to the plaintiff without the plaintiff's consent, and sought $5,000 in statutory damages per alleged violation. The Third Amended Complaint further alleged that Nelnet improperly recorded telephone calls to other California residents without such persons' consent, and sought to establish a class action with respect to the California Section 632 claim. As of the filing date of this report, the Court has not established, recognized, or certified a class. On October 16, 2013, Nelnet and the named plaintiff reached an agreement in principle whereby Nelnet would, without admitting any wrongdoing or liability, settle all claims in the lawsuit, including potential class action claims, for payment of an immaterial amount. The settlement agreement in principle is subject to finalization and court approval.

Grant Keating v. Peterson's Nelnet, LLC et al

On August 6, 2012, an Amended Complaint was served on Peterson's, CUnet, LLC (“CUnet”), a subsidiary of Nelnet, and on Nelnet (collectively, the "Defendants"), in connection with a lawsuit by Grant Keating in the United States District Court for the Northern District of Ohio (the “Ohio District Court”). The lawsuit was originally instituted on August 24, 2011, and alleges that the Defendants sent an advertising text message to the named plaintiff in June 2011 using an automatic telephone dialing system, and without the plaintiff's express consent. The complaint also alleges that this text message violated the TCPA, purportedly entitling the plaintiff to $500, trebled for a willful violation. The complaint further alleges that the Defendants sent putative class members similar text messages using an automatic telephone dialing system, without such purported class members' consent. The complaint seeks to establish a class action. On August 29, 2013, the Defendants filed motions for summary judgment, and the named plaintiff filed a motion for class certification. As of the filing date of this report, the Ohio District Court has not established, recognized, or certified a class. The Defendants intend to defend themselves vigorously in this lawsuit.
Subsequent Events
Subsequent Events [Text Block]
13. Subsequent Events

On October 31, 2013, the Company purchased GCO Education Loan Funding Trust-II, giving the Company rights to the residual interest in $1.6 billion of FFEL Program loans. The trust includes FFELP loans funded to term with notes payable that carry interest rates on a spread to LIBOR or are set and periodically reset via a "dutch auction" ("Auction Rate Securities"). The student loans and debt within the trust will be included in the Company's consolidated financial statements.
Basis of Financial Reporting Significant Accounting Policies (Policies)
Basis of Financial Reporting
Basis of Financial Reporting

The accompanying unaudited consolidated financial statements of Nelnet, Inc. and subsidiaries (the “Company”) as of September 30, 2013 and for the three and nine months ended September 30, 2013 and 2012 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2012 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 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, 2013 are not necessarily indicative of the results for the year ending December 31, 2013. 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, 2012 (the "2012 Annual Report").
Student Loans Receivable and Allowance for Loan Losses (Tables)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2013
Receivables [Abstract]
 
 
Schedule of Accounts, Notes, Loans and Financing Receivable
 
Allowance for Credit Losses on Financing Receivables
 
Accrual Related to Repurchase Obligation Rollforward
 
Financing Receivable Credit Quality Indicators
 
Student loans receivable consisted of the following:
 
As of
 
As of
 
September 30, 2013
 
December 31, 2012
 
Held for investment
 
Held for sale
 
Held for investment
Federally insured loans
 
 
 
 
 
Stafford and other
$
6,884,348

 

 
7,261,114

Consolidation
17,908,229

 

 
17,708,732

Total
24,792,577

 

 
24,969,846

Non-federally insured loans
66,283

 
28,480

 
26,034

 
24,858,860


28,480

 
24,995,880

Loan discount, net of unamortized loan premiums and deferred origination costs
(103,551
)
 

 
(113,357
)
Allowance for loan losses – federally insured loans
(42,406
)
 

 
(40,120
)
Allowance for loan losses – non-federally insured loans
(11,791
)
 

 
(11,782
)
 
$
24,701,112

 
28,480

 
24,830,621

Allowance for federally insured loans as a percentage of such loans
0.17
%
 
 
 
0.16
%
Allowance for non-federally insured loans as a percentage of such loans
17.79
%
 
 
 
45.26
%
The provision for loan losses represents the periodic expense of maintaining an allowance appropriate to absorb losses, net of recoveries, inherent in the portfolio of student loans. Activity in the allowance for loan losses is shown below.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Balance at beginning of period
$
51,611

 
49,657

 
51,902

 
48,482

Provision for loan losses:
 
 
 
 
 

 
 

Federally insured loans
5,000

 
5,000

 
16,000

 
18,000

Non-federally insured loans

 

 
(1,000
)
 

Total provision for loan losses
5,000

 
5,000

 
15,000

 
18,000

Charge-offs:
 

 
 

 
 

 
 

Federally insured loans
(3,142
)
 
(5,449
)
 
(12,472
)
 
(16,943
)
Non-federally insured loans
(906
)
 
(1,058
)
 
(2,270
)
 
(2,355
)
Total charge-offs
(4,048
)
 
(6,507
)
 
(14,742
)
 
(19,298
)
Recoveries - non-federally insured loans
363

 
399

 
1,173

 
1,104

Purchase (sale) of federally insured loans, net
700

 
(928
)
 
(1,243
)
 
(2,647
)
Transfer from repurchase obligation related to non-federally insured loans repurchased, net
571

 
588

 
2,107

 
2,568

Balance at end of period
$
54,197

 
48,209

 
54,197

 
48,209

 
 
 
 
 
 
 
 
Allocation of the allowance for loan losses:
 
 
 

 
 

 
 

Federally insured loans
$
42,406

 
35,614

 
42,406

 
35,614

Non-federally insured loans
11,791

 
12,595

 
11,791

 
12,595

Total allowance for loan losses
$
54,197

 
48,209

 
54,197

 
48,209


As of September 30, 2013, the Company had participated a cumulative amount of $98.5 million (par value) of non-federally insured loans to third parties. Loans participated under these agreements have been accounted for by the Company as loan sales. Accordingly, the participation interests sold are not included in the Company’s consolidated balance sheets. Per the terms of the servicing agreements, the Company’s servicing operations are obligated to repurchase loans subject to the participation interests in the event such loans become 60 or 90 days delinquent.

In addition, in 2011, the Company sold a portfolio of non-federally insured loans for proceeds of $91.3 million (100% of par value).  The Company retained credit risk related to this portfolio and will pay cash to purchase back any loans which become 60 days delinquent. As of September 30, 2013, the balance of this portfolio was $66.0 million (par value).

The Company’s estimate related to its obligation to repurchase these loans is included in “other liabilities” in the Company’s consolidated balance sheets. The activity related to this accrual is detailed below.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Beginning balance
$
14,594

 
17,243

 
16,130

 
19,223

Repurchase obligation transferred to the allowance for loan losses related to loans repurchased, net
(571
)
 
(588
)
 
(2,107
)
 
(2,568
)
Ending balance
$
14,023

 
16,655

 
14,023

 
16,655


In addition, the Company has purchased delinquent federally insured loans that are funded in the Company's FFELP warehouse facilities. Upon purchase, these loans are recorded at fair value, which generally approximates the federal guarantee rate. As such, there is minimal credit risk related to these loans. Loans delinquent 121 days or greater and funded in the Company's FFELP warehouse facilities are included with rehabilitated loans purchased in the following delinquency tables.

 
As of September 30, 2013
 
As of December 31, 2012
 
As of September 30, 2012
Federally insured loans, excluding rehabilitation loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
2,780,442

 
 
 
$
2,949,320

 
 
 
$
3,163,918

 
 
Loans in forbearance
2,953,119

 
 
 
2,992,023

 
 
 
2,868,168

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
14,157,330

 
87.2
%
 
14,583,044

 
87.6
%
 
13,673,217

 
87.2
%
Loans delinquent 31-60 days
662,814

 
4.1

 
652,351

 
3.9

 
586,021

 
3.7

Loans delinquent 61-90 days
354,975

 
2.2

 
330,885

 
2.0

 
308,377

 
2.0

Loans delinquent 91-120 days
235,681

 
1.5

 
247,381

 
1.5

 
237,941

 
1.5

Loans delinquent 121-270 days
624,042

 
3.8

 
603,942

 
3.6

 
628,697

 
4.0

Loans delinquent 271 days or greater
195,853

 
1.2

 
220,798

 
1.4

 
253,438

 
1.6

Total loans in repayment
16,230,695

 
100.0
%
 
16,638,401

 
100.0
%
 
15,687,691

 
100.0
%
Total federally insured loans, excluding rehabilitation loans
$
21,964,256

 
 

 
$
22,579,744

 
 

 
$
21,719,777

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rehabilitation loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
259,377

 
 
 
$
150,317

 
 
 
$
90,836

 
 
Loans in forbearance
443,629

 
 
 
330,278

 
 
 
129,257

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
1,078,730

 
50.7
%
 
670,205

 
35.1
%
 
418,584

 
61.9
%
Loans delinquent 31-60 days
188,583

 
8.9

 
113,795

 
6.0

 
52,053

 
7.7

Loans delinquent 61-90 days
125,310

 
5.9

 
79,691

 
4.2

 
35,104

 
5.2

Loans delinquent 91-120 days
137,016

 
6.4

 
186,278

 
9.8

 
33,931

 
5.0

Loans delinquent 121-270 days
354,192

 
16.7

 
633,001

 
33.1

 
99,041

 
14.7

Loans delinquent 271 days or greater
241,484

 
11.4

 
226,537

 
11.8

 
37,025

 
5.5

Total loans in repayment
2,125,315

 
100.0
%
 
1,909,507

 
100.0
%
 
675,738

 
100.0
%
Total rehabilitation loans
2,828,321

 
 
 
2,390,102

 
 
 
895,831

 
 
Total federally insured loans
$
24,792,577

 
 
 
$
24,969,846

 
 
 
$
22,615,608

 
 


Bonds and Notes payable (Tables)
The following tables summarize the Company’s outstanding debt obligations by type of instrument:
 
As of September 30, 2013
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
22,632,522

 
0.27% - 6.90%
 
11/25/15 - 8/26/52
Bonds and notes based on auction or remarketing
890,500

 
0.08% - 2.13%
 
5/1/28 - 5/25/42
Total variable-rate bonds and notes
23,523,022

 
 
 
 
FFELP warehouse facilities
1,277,650

 
0.18% - 0.28%
 
1/17/16 - 6/12/16
Unsecured line of credit
75,000

 
1.68%
 
3/28/18
Unsecured debt - Junior Subordinated Hybrid Securities
99,232

 
3.62%
 
9/15/61
Other borrowings
61,828

 
1.68% - 5.10%
 
11/14/13 - 11/11/15
 
25,036,732

 
 
 
 
Discount on bonds and notes payable
(178,277
)
 
 
 
 
Total
$
24,858,455

 
 
 
 
 
As of December 31, 2012
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
21,185,140

 
0.32% - 6.90%
 
11/25/15 - 8/26/52
Bonds and notes based on auction or remarketing
969,925

 
0.15% - 2.14%
 
5/1/28 - 5/25/42
Total variable-rate bonds and notes
22,155,065

 
 
 
 
FFELP warehouse facilities
1,554,151

 
0.21% - 0.29%
 
1/31/15 - 6/30/15
Department of Education Conduit
1,344,513

 
0.82%
 
1/19/14
Unsecured line of credit
55,000

 
1.71%
 
2/17/16
Unsecured debt - Junior Subordinated Hybrid Securities
99,232

 
3.68%
 
9/15/61
Other borrowings
62,904

 
1.50% - 5.10%
 
11/14/13 - 11/11/15
 
25,270,865

 
 
 
 
Discount on bonds and notes payable
(172,030
)
 
 
 
 
Total
$
25,098,835

 
 
 
 
As of September 30, 2013, the Company had four FFELP warehouse facilities as summarized below.
 
 
NHELP-I (a)
 
NHELP-III (b)
 
NHELP-II (c)
 
NFSLW-I (d)
 
Total
Maximum financing amount
 
$
500,000

 
750,000

 
500,000

 
500,000

 
2,250,000

Amount outstanding
 

 
637,770

 
373,258

 
266,622

 
1,277,650

Amount available
 
$
500,000

 
112,230

 
126,742

 
233,378

 
972,350

Expiration of liquidity provisions
 


 
January 16, 2014

 
February 28, 2014

 
June 12, 2014

 
 
Final maturity date
 


 
January 17, 2016

 
February 28, 2016

 
June 12, 2016

 
 
Maximum advance rates
 
 
 
92.2 - 95%

 
84.5 - 94.5%

 
92 - 98%

 
 
Minimum advance rates
 
 
 
92.2 - 95%

 
84.5 - 94.5%

 
84 - 90%

 
 
Advanced as equity support
 
$

 
36,926

 
33,863

 
11,647

 
82,436


(a)
On October 1, 2013, the Company terminated this facility. All loans previously financed in this facility were financed in other warehouse facilities during the third quarter of 2013.
(b)
The Company entered into this facility on January 16, 2013. On September 16, 2013, the Company amended this facility to increase the maximum financing amount from $500 million to $750 million.
(c)
On June 3, 2013, the Company amended this facility to change the terms of the advance rates.

(d)
On June 13, 2013, the Company amended this facility to change the terms of the advance rates and extend the expiration of the liquidity provisions and its final maturity date.

The following table summarizes the asset-backed securitization transactions completed during the nine months ended September 30, 2013.
 
 
2013-1
 
2013-2 (a)
 
2013-3
 
2013-4
 
2013-5 (a)
 
Total
Date securities issued
 
1/31/13
 
2/28/13
 
4/30/13
 
6/21/13
 
9/30/13
 
 
Total original principal amount
 
$
437,500

 
1,122,000

 
765,000

 
453,000

 
399,000

 
$
3,176,500

 
 
 
 
 
 
 
 
 
 
 
 
 
Class A senior notes:
 
 
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
$
428,000

 
1,122,000

 
745,000

 
440,000

 
399,000

 
3,134,000

Bond discount
 

 
(3,325
)
 

 
(1,690
)
 
(4,881
)
 
(9,896
)
Issue price
 
$
428,000

 
1,118,675

 
745,000

 
438,310

 
394,119

 
3,124,104

Cost of funds (1-month LIBOR plus:)
 
0.60
%
 
0.50
%
 
0.50
%
 
0.50
%
 
0.63
%
 
 
Final maturity date
 
6/25/41

 
7/25/40

 
2/25/37

 
12/26/42

 
1/25/37

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class B subordinated notes:
 
 
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
$
9,500

 
 
 
20,000

 
13,000

 
 
 
42,500

Bond discount
 
(1,525
)
 
 
 
(1,762
)
 
(1,804
)
 
 
 
(5,091
)
Issue price
 
$
7,975

 
 
 
18,238

 
11,196

 
 
 
37,409

Cost of funds (1-month LIBOR plus:)
 
1.50
%
 
 
 
1.50
%
 
1.50
%
 
 
 
 
Final maturity date
 
3/25/48

 
 
 
7/25/47

 
1/25/47

 
 
 
 

(a)
Total original principal amount excludes the Class B subordinated tranches for the 2013-2 and 2013-5 transactions totaling $34.0 million and $9.0 million, respectively, that were retained at issuance. As of September 30, 2013, the Company has a total of $85.5 million (face amount) of its own Class B subordinated notes remaining from prior completed asset-backed securitizations that are not included in the Company's consolidated balance sheet.

Derivative Financial Instruments (Tables)
The following table summarizes the Company’s 1:3 Basis Swaps outstanding:
 
 
 
 
 
As of September 30, 2013
 
As of December 31, 2012
 
 
Maturity
 
Notional amount
 
Notional amount
 
 
2021
 
 
$
250,000

 
250,000

 
 
2022
 
 
1,900,000

 
1,900,000

 
 
2023
 
 
3,650,000

 
3,150,000

 
 
2024
 
 
250,000

 
250,000

 
 
2026
 
 
800,000

 
800,000

 
 
2028
 
 
100,000

 
100,000

 
 
2036
 
 
700,000

 
700,000

 
 
2039
(a)
 
150,000

 
150,000

 
 
2040
(b)
 
200,000

 
200,000

 
 
 
 
 
$
8,000,000

(c)
7,500,000

(c)
(a)This derivative has a forward effective start date in 2015.
(b)This derivative has a forward effective start date in 2020.
(c)
The weighted average rate paid by the Company on the 1:3 Basis Swaps as of September 30, 2013 and December 31, 2012, was one-month LIBOR plus 3.5 basis points and one-month LIBOR plus 3.3 basis points, respectively.
The following table summarizes the outstanding derivative instruments used by the Company to economically hedge loans earning fixed rate floor income.
 
 
As of September 30, 2013
 
As of December 31, 2012
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
 
 
 
2013
 
$

 
%
 
$
3,150,000

 
0.71
%
2014
 
1,750,000

 
0.71

 
1,750,000

 
0.71

2015
 
1,100,000

 
0.89

 
1,100,000

 
0.89

2016
 
750,000

 
0.85

 
750,000

 
0.85

2017
 
1,250,000

 
0.86

 
750,000

 
0.99

 
 
$
4,850,000

 
0.81
%
 
$
7,500,000

 
0.78
%

(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.
The Company had the following derivatives outstanding that are used to effectively convert the variable interest rate on a portion of the Hybrid Securities to a fixed rate of 7.7%.
 
 
 
As of September 30, 2013
 
As of December 31, 2012
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
2036
 
$
25,000

 
4.28
%
 
$
75,000

 
4.28
%
(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.
The following table shows the income statement impact as a result of the re-measurement of the Euro Notes and the change in the fair value of the related derivative instruments.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Re-measurement of Euro Notes
$
(39,974
)
 
(20,799
)
 
(25,902
)
 
6,186

Change in fair value of cross-currency interest rate swaps
39,074

 
24,586

 
18,978

 
(24,934
)
Total impact to consolidated statements of income - income (expense) (a)
$
(900
)
 
3,787

 
(6,924
)
 
(18,748
)
(a)
The financial statement impact of the above items is included in "Derivative market value and foreign currency adjustments and derivative settlements, net" in the Company's consolidated statements of income.
The following table summarizes the fair value of the Company’s derivatives as reflected in the consolidated balance sheets:
 
Fair value of asset derivatives
 
Fair value of liability derivatives
 
As of
 
As of
 
As of
 
As of
 
September 30,
2013
 
December 31,
2012
 
September 30,
2013
 
December 31,
2012
1:3 basis swaps
$
20,425

 
12,239

 

 
1,215

Interest rate swaps - floor income hedges
6,032

 

 
18,186

 
45,913

Interest rate swaps - hybrid debt hedges

 

 
3,327

 
23,762

Cross-currency interest rate swaps
101,819


82,841

 

 

Other

 
2,361

 

 

Total
$
128,276

 
97,441

 
21,513

 
70,890



The following tables include the gross amounts related to the Company's derivative portfolio recognized in the consolidated balance sheets, reconciled to the net amount when excluding derivatives subject to enforceable master netting arrangements and cash collateral received/pledged:
 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative assets
 
Gross amounts of recognized assets presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral received (a)
 
Net asset (liability)
Balance as of September 30, 2013
 
$
128,276

 
(17,991
)
 
(73,734
)
 
36,551

Balance as of December 31, 2012
 
97,441

 
(13,234
)
 
(19,993
)
 
64,214


 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative liabilities
 
Gross amounts of recognized liabilities presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral pledged (b)
 
Net asset (liability)
Balance as of September 30, 2013
 
$
(21,513
)
 
17,991

 
4,000

 
478

Balance as of December 31, 2012
 
(70,890
)
 
13,234

 
63,128

 
5,472


The following table summarizes the effect of derivative instruments in the consolidated statements of income.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2013
 
2012
 
2013
 
2012
Settlements:
 

 
 

 
 

 
 

1:3 basis swaps
$
781

 
1,100

 
2,474

 
3,651

Interest rate swaps - floor income hedges
(7,178
)
 
(5,595
)
 
(24,017
)
 
(12,237
)
Interest rate swaps - hybrid debt hedges
(256
)
 
(733
)
 
(1,413
)
 
(1,479
)
Cross-currency interest rate swaps
(35
)
 
227

 
(273
)
 
3,390

Other

 
(50
)
 

 
(235
)
Total settlements - income (expense)
(6,688
)
 
(5,051
)
 
(23,229
)
 
(6,910
)
Change in fair value:
 

 
 

 
 

 
 

1:3 basis swaps
(2,161
)
 
(4,578
)
 
9,402

 
(2,005
)
Interest rate swaps - floor income hedges
(9,599
)
 
(29,903
)
 
33,231

 
(41,681
)
Interest rate swaps - hybrid debt hedges
2,700

 
1,695

 
11,790

 
(890
)
Cross-currency interest rate swaps
39,074

 
24,586

 
18,978

 
(24,934
)
Other

 
2,775

 
342

 
2,161

Total change in fair value - income (expense)
30,014

 
(5,425
)
 
73,743

 
(67,349
)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
(39,974
)
 
(20,799
)
 
(25,902
)
 
6,186

Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense)
$
(16,648
)
 
(31,275
)
 
24,612

 
(68,073
)

Investments (Tables)
A summary of the Company's investments and restricted investments follows:
 
As of September 30, 2013
 
As of December 31, 2012
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses (a)
 
Fair value
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
 
 
 
 
 
 
 
 
Investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities (b)
$
211,548

 
8,535

 
(968
)
 
219,115

 
64,970

 
3,187

 
(179
)
 
67,978

Equity securities
1,550

 
1,519

 
(5
)
 
3,064

 
3,449

 
1,604

 
(180
)
 
4,873

Total available-for-sale investments
$
213,098

 
10,054

 
(973
)
 
222,179

 
68,419

 
4,791

 
(359
)
 
72,851

Trading investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities
 
 
 
 
 
 
10,484

 
 
 
 
 
 
 
10,461

Total available-for-sale and trading investments

 

 

 
$
232,663

 
 
 
 
 


 
83,312

Restricted Investments (c):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guaranteed investment contracts - held-to-maturity
 
 
 
 
 
 
$
6,724

 
 
 
 
 
 
 
8,830


    
(a)
As of September 30, 2013, the Company considered the decline in market value of its available-for-sale investments to be temporary in nature and did not consider any of its investments other-than-temporarily impaired.

(b)
As of September 30, 2013, the stated maturities of the majority of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years.

(c)
Restricted investments are included in "restricted cash and investments" in the Company's consolidated balance sheets.

The amounts reclassified from accumulated other comprehensive income related to the realized gains and losses on available-for-sale-securities is summarized below.
 
 
Three months ended September 30,
 
Nine months ended September 30,
Affected line item in the consolidated statements of income - income (expense):
 
2013
 
2012
 
2013
 
2012
Other income
 
$
730

 
2,618

 
2,246

 
4,848

Income tax expense
 
(270
)
 
(969
)
 
(831
)
 
(1,794
)
Net
 
$
460

 
1,649

 
1,415

 
3,054

Earnings per Common Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted
 
Three months ended September 30,
 
2013
 
2012
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
62,277

 
553

 
62,830

 
36,538

 
290

 
36,828

 
 
 
 
 


 
 
 
 
 
 
Denominator:


 


 


 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
46,086,743

 
409,869

 
46,496,612

 
47,086,182

 
374,126

 
47,460,308

Earnings per share - basic and diluted
$
1.35

 
1.35

 
1.35

 
0.78

 
0.78

 
0.78



 
Nine months ended September 30,
 
2013
 
2012
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
230,141

 
2,011

 
232,152

 
120,452

 
911

 
121,363

 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
46,189,200

 
404,041

 
46,593,241

 
47,042,062

 
357,145

 
47,399,207

Earnings per share - basic and diluted
$
4.98

 
4.98

 
4.98

 
2.56

 
2.56

 
2.56

Segment Reporting (Tables)
Schedule of Segment Reporting Information, by Segment
Segment Results of Operations

The following tables include the results of each of the Company's operating segments reconciled to the consolidated financial statements.
 
Three months ended September 30, 2013
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
10

 

 

 
10

 
158,793

 
2,201

 
(767
)
 
160,237

Interest expense

 

 

 

 
56,100

 
(18
)
 
(767
)
 
55,315

Net interest income (loss)
10

 

 

 
10

 
102,693

 
2,219

 

 
104,922

Less provision for loan losses

 

 

 

 
5,000

 

 

 
5,000

Net interest income (loss) after provision for loan losses
10

 

 

 
10

 
97,693

 
2,219

 

 
99,922

Other income (expense):
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
64,582

 

 

 
64,582

 

 

 

 
64,582

Intersegment servicing revenue
13,519

 

 

 
13,519

 

 

 
(13,519
)
 

Tuition payment processing and campus commerce revenue

 
19,927

 

 
19,927

 

 

 

 
19,927

Enrollment services revenue

 

 
22,563

 
22,563

 

 

 

 
22,563

Other income

 

 

 

 
3,981

 
4,632

 

 
8,613

Gain on sale of loans and debt repurchases

 

 

 

 
2,138

 

 

 
2,138

Derivative market value and foreign currency adjustments, net

 

 

 

 
(12,660
)
 
2,700

 

 
(9,960
)
Derivative settlements, net

 

 

 

 
(6,432
)
 
(256
)
 

 
(6,688
)
Total other income (expense)
78,101

 
19,927

 
22,563

 
120,591

 
(12,973
)
 
7,076

 
(13,519
)
 
101,175

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
29,719

 
9,229

 
4,491

 
43,439

 
555

 
4,718

 

 
48,712

Cost to provide enrollment services

 

 
14,668

 
14,668

 

 

 

 
14,668

Depreciation and amortization
2,677

 
1,117

 
57

 
3,851

 

 
489

 

 
4,340

Other
19,752

 
1,908

 
1,556

 
23,216

 
7,939

 
8,732

 

 
39,887

Intersegment expenses, net
1,457

 
1,431

 
1,139

 
4,027

 
13,705

 
(4,213
)
 
(13,519
)
 

Total operating expenses
53,605

 
13,685

 
21,911

 
89,201

 
22,199

 
9,726

 
(13,519
)
 
107,607

Income (loss) before income taxes and corporate overhead allocation
24,506

 
6,242

 
652

 
31,400

 
62,521

 
(431
)
 

 
93,490

Corporate overhead allocation
(1,822
)
 
(607
)
 
(607
)
 
(3,036
)
 
(1,302
)
 
4,338

 

 

Income (loss) before income taxes
22,684

 
5,635

 
45

 
28,364

 
61,219

 
3,907

 

 
93,490

Income tax (expense) benefit
(8,620
)
 
(2,141
)
 
(17
)
 
(10,778
)
 
(23,263
)
 
3,597

 

 
(30,444
)
Net income (loss)
14,064

 
3,494

 
28

 
17,586

 
37,956

 
7,504

 

 
63,046

  Net income attributable to noncontrolling interest

 

 

 

 

 
216

 

 
216

Net income (loss) attributable to Nelnet, Inc.
$
14,064

 
3,494

 
28

 
17,586

 
37,956

 
7,288

 

 
62,830

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended September 30, 2012
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
12

 
3

 

 
15

 
150,661

 
1,891

 
(899
)
 
151,668

Interest expense

 

 

 

 
64,829

 
2,472

 
(899
)
 
66,402

Net interest income (loss)
12

 
3

 

 
15

 
85,832

 
(581
)
 

 
85,266

Less provision for loan losses

 

 

 

 
5,000

 

 

 
5,000

Net interest income (loss) after provision for loan losses
12

 
3

 

 
15

 
80,832

 
(581
)
 

 
80,266

Other income (expense):
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
53,285

 

 

 
53,285

 

 

 

 
53,285

Intersegment servicing revenue
15,855

 

 

 
15,855

 

 

 
(15,855
)
 

Tuition payment processing and campus commerce revenue

 
17,928

 

 
17,928

 

 

 

 
17,928

Enrollment services revenue

 

 
30,661

 
30,661

 

 

 

 
30,661

Other income

 

 

 

 
5,834

 
6,865

 

 
12,699

Gain on sale of loans and debt repurchases

 

 

 

 
195

 

 

 
195

Derivative market value and foreign currency adjustments, net

 

 

 

 
(30,694
)
 
4,470

 

 
(26,224
)
Derivative settlements, net

 

 

 

 
(4,319
)
 
(732
)
 

 
(5,051
)
Total other income (expense)
69,140

 
17,928

 
30,661

 
117,729

 
(28,984
)
 
10,603

 
(15,855
)
 
83,493

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
27,716

 
8,578

 
5,147

 
41,441

 
462

 
4,492

 

 
46,395

Cost to provide enrollment services

 

 
20,151

 
20,151

 

 

 

 
20,151

Depreciation and amortization
4,691

 
1,703

 
1,633

 
8,027

 

 
375

 

 
8,402

Other
16,775

 
2,285

 
1,782

 
20,842

 
3,451

 
5,696

 

 
29,989

Intersegment expenses, net
1,262

 
1,379

 
1,000

 
3,641

 
16,064

 
(3,850
)
 
(15,855
)
 

Total operating expenses
50,444

 
13,945

 
29,713

 
94,102

 
19,977

 
6,713

 
(15,855
)
 
104,937

Income (loss) before income taxes and corporate overhead allocation
18,708

 
3,986

 
948

 
23,642

 
31,871

 
3,309

 

 
58,822

Corporate overhead allocation
(1,337
)
 
(446
)
 
(446
)
 
(2,229
)
 
(909
)
 
3,138

 

 

Income (loss) before income taxes
17,371

 
3,540

 
502

 
21,413

 
30,962

 
6,447

 

 
58,822

Income tax (expense) benefit
(6,601
)
 
(1,345
)
 
(191
)
 
(8,137
)
 
(11,765
)
 
(1,968
)
 

 
(21,870
)
Net income (loss)
10,770

 
2,195

 
311

 
13,276

 
19,197

 
4,479

 

 
36,952

  Net income attributable to noncontrolling interest

 

 

 

 

 
124

 

 
124

Net income (loss) attributable to Nelnet, Inc.
$
10,770

 
2,195

 
311

 
13,276

 
19,197

 
4,355

 

 
36,828

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2013
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
29

 

 

 
29

 
472,622

 
6,708

 
(2,420
)
 
476,939

Interest expense

 

 

 

 
170,502

 
3,718

 
(2,420
)
 
171,800

Net interest income (loss)
29

 

 

 
29

 
302,120

 
2,990

 

 
305,139

Less provision for loan losses

 

 

 

 
15,000

 

 

 
15,000

Net interest income (loss) after provision for loan losses
29

 

 

 
29

 
287,120

 
2,990

 

 
290,139

Other income (expense):
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
180,261

 

 

 
180,261

 

 

 

 
180,261

Intersegment servicing revenue
42,375

 

 

 
42,375

 

 

 
(42,375
)
 

Tuition payment processing and campus commerce revenue

 
61,694

 

 
61,694

 

 

 

 
61,694

Enrollment services revenue

 

 
76,343

 
76,343

 

 

 

 
76,343

Other income

 

 

 

 
11,207

 
19,110

 

 
30,317

Gain on sale of loans and debt repurchases

 

 

 

 
10,900

 

 

 
10,900

Derivative market value and foreign currency adjustments, net

 

 

 

 
35,711

 
12,130

 

 
47,841

Derivative settlements, net

 

 

 

 
(21,816
)
 
(1,413
)
 

 
(23,229
)
Total other income (expense)
222,636

 
61,694

 
76,343

 
360,673

 
36,002

 
29,827

 
(42,375
)
 
384,127

Operating expenses:
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 

Salaries and benefits
86,254

 
28,015

 
15,067

 
129,336

 
1,709

 
13,004

 

 
144,049

Cost to provide enrollment services

 

 
51,097

 
51,097

 

 

 

 
51,097

Depreciation and amortization
8,197

 
3,387

 
179

 
11,763

 

 
1,274

 

 
13,037

Other
56,173

 
6,387

 
4,450

 
67,010

 
23,375

 
18,808

 

 
109,193

Intersegment expenses, net
3,243

 
4,350

 
3,418

 
11,011

 
42,955

 
(11,591
)
 
(42,375
)
 

Total operating expenses
153,867

 
42,139

 
74,211

 
270,217

 
68,039

 
21,495

 
(42,375
)
 
317,376

Income (loss) before income taxes and corporate overhead allocation
68,798

 
19,555

 
2,132

 
90,485

 
255,083

 
11,322

 

 
356,890

Corporate overhead allocation
(4,332
)
 
(1,443
)
 
(1,443
)
 
(7,218
)
 
(3,095
)
 
10,313

 

 

Income (loss) before income taxes
64,466

 
18,112

 
689

 
83,267

 
251,988

 
21,635

 

 
356,890

Income tax (expense) benefit
(24,498
)
 
(6,882
)
 
(261
)
 
(31,641
)
 
(95,755
)
 
3,759

 

 
(123,637
)
Net income (loss)
39,968

 
11,230

 
428

 
51,626

 
156,233

 
25,394

 

 
233,253

  Net income attributable to noncontrolling interest

 

 

 

 

 
1,101

 

 
1,101

Net income (loss) attributable to Nelnet, Inc.
$
39,968

 
11,230

 
428

 
51,626

 
156,233

 
24,293

 

 
232,152

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2012
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
44

 
8

 

 
52

 
455,413

 
5,226

 
(2,827
)
 
457,864

Interest expense

 

 

 

 
199,675

 
6,327

 
(2,827
)
 
203,175

Net interest income (loss)
44

 
8

 

 
52

 
255,738

 
(1,101
)
 

 
254,689

Less provision for loan losses

 

 

 

 
18,000

 

 

 
18,000

Net interest income (loss) after provision for loan losses
44

 
8

 

 
52

 
237,738

 
(1,101
)
 

 
236,689

Other income (expense):
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
155,164

 

 

 
155,164

 

 

 

 
155,164

Intersegment servicing revenue
49,210

 

 

 
49,210

 

 

 
(49,210
)
 

Tuition payment processing and campus commerce revenue

 
56,675

 

 
56,675

 

 

 

 
56,675

Enrollment services revenue

 

 
92,035

 
92,035

 

 

 

 
92,035

Other income

 

 

 

 
14,415

 
18,038

 

 
32,453

Gain on sale of loans and debt repurchases

 

 

 

 
1,130

 

 

 
1,130

Derivative market value and foreign currency adjustments, net

 

 

 

 
(62,351
)
 
1,188

 

 
(61,163
)
Derivative settlements, net

 

 

 

 
(5,431
)
 
(1,479
)
 

 
(6,910
)
Total other income (expense)
204,374

 
56,675

 
92,035

 
353,084

 
(52,237
)
 
17,747

 
(49,210
)
 
269,384

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
85,663

 
25,771

 
17,587

 
129,021

 
1,723

 
13,449

 

 
144,193

Cost to provide enrollment services

 

 
62,203

 
62,203

 

 

 

 
62,203

Depreciation and amortization
13,629

 
5,174

 
4,867

 
23,670

 

 
1,094

 

 
24,764

Other
52,980

 
7,557

 
5,483

 
66,020

 
10,203

 
16,937

 

 
93,160

Intersegment expenses, net
3,832

 
4,042

 
2,824

 
10,698

 
49,842

 
(11,330
)
 
(49,210
)
 

Total operating expenses
156,104

 
42,544

 
92,964

 
291,612

 
61,768

 
20,150

 
(49,210
)
 
324,320

Income (loss) before income taxes and corporate overhead allocation
48,314

 
14,139

 
(929
)
 
61,524

 
123,733

 
(3,504
)
 

 
181,753

Corporate overhead allocation
(4,115
)
 
(1,372
)
 
(1,372
)
 
(6,859
)
 
(3,701
)
 
10,560

 

 

Income (loss) before income taxes
44,199

 
12,767

 
(2,301
)
 
54,665

 
120,032

 
7,056

 

 
181,753

Income tax (expense) benefit
(16,796
)
 
(4,851
)
 
874

 
(20,773
)
 
(45,610
)
 
6,405

 

 
(59,978
)
Net income (loss)
27,403

 
7,916

 
(1,427
)
 
33,892

 
74,422

 
13,461

 

 
121,775

  Net income attributable to noncontrolling interest

 

 

 

 

 
412

 

 
412

Net income (loss) attributable to Nelnet, Inc.
$
27,403

 
7,916

 
(1,427
)
 
33,892

 
74,422

 
13,049

 

 
121,363

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value (Tables)
The following tables present the Company’s financial assets and liabilities that are measured at fair value on a recurring basis. There were no transfers into or out of level 1, level 2, or level 3 for the nine months ended September 30, 2013.
 
As of September 30, 2013
 
As of December 31, 2012
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
Investments:
 
 
 
 


 
 
 
 
 
 
Student loan asset-backed securities
$

 
229,095

 
229,095

 

 
77,652

 
77,652

Equity securities
3,064

 

 
3,064

 
4,873

 

 
4,873

Debt securities
504

 

 
504

 
787

 

 
787

Total investments
3,568

 
229,095

 
232,663

 
5,660

 
77,652

 
83,312

Fair value of derivative instruments

 
128,276

 
128,276

 

 
97,441

 
97,441

Total assets
$
3,568

 
357,371

 
360,939

 
5,660

 
175,093

 
180,753

Liabilities:
 

 
 

 
 

 
 
 
 
 
 
Fair value of derivative instruments
$

 
21,513

 
21,513

 

 
70,890

 
70,890

Total liabilities
$

 
21,513

 
21,513

 

 
70,890

 
70,890


The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:
 
As of September 30, 2013
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
25,287,320

 
24,701,112

 

 

 
25,287,320

Non-federally insured student loans receivable - held for sale
28,480

 
28,480

 

 

 
28,480

Cash and cash equivalents
51,391

 
51,391

 
51,391

 

 

Investments
232,663

 
232,663

 
3,568

 
229,095

 

Restricted cash
668,202

 
668,202

 
668,202

 

 

Restricted cash – due to customers
93,695

 
93,695

 
93,695

 

 

Restricted investments
6,724

 
6,724

 
6,724

 

 

Accrued interest receivable
303,350

 
303,350

 

 
303,350

 

Derivative instruments
128,276

 
128,276

 

 
128,276

 

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
24,376,185

 
24,858,455

 

 
24,376,185

 

Accrued interest payable
14,218

 
14,218

 

 
14,218

 

Due to customers
93,695

 
93,695

 
93,695

 

 

Derivative instruments
21,513

 
21,513

 

 
21,513

 

 
As of December 31, 2012
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
25,418,623

 
24,830,621

 

 

 
25,418,623

Cash and cash equivalents
66,031

 
66,031

 
66,031

 

 

Investments
83,312

 
83,312

 
5,660

 
77,652

 

Restricted cash
806,632

 
806,632

 
806,632

 

 

Restricted cash – due to customers
96,516

 
96,516

 
96,516

 

 

Restricted investments
8,830

 
8,830

 
8,830

 

 

Accrued interest receivable
307,518

 
307,518

 

 
307,518

 

Derivative instruments
97,441

 
97,441

 

 
97,441

 

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
24,486,008

 
25,098,835

 

 
24,486,008

 

Accrued interest payable
14,770

 
14,770

 

 
14,770

 

Due to customers
96,516

 
96,516

 
96,516

 

 

Derivative instruments
70,890

 
70,890

 

 
70,890

 

Student Loans Receivable (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Jun. 30, 2013
Dec. 31, 2012
Sep. 30, 2012
Jun. 30, 2012
Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Non-federally insured student loans receivable - held for sale
$ 28,480 
 
$ 0 
 
 
 
Allowance for loan losses
54,197 
51,611 
51,902 
48,209 
49,657 
48,482 
Student loans receivable
24,701,112 
 
24,830,621 
 
 
 
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Allowance for loan losses
42,406 
 
 
35,614 
 
 
Allowance for student loans receivable as a percentage
0.17% 
 
0.16% 
 
 
 
Non-federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Non-federally insured student loans receivable - held for sale
28,480 
 
 
 
 
 
Allowance for loan losses
11,791 
 
 
12,595 
 
 
Allowance for student loans receivable as a percentage
17.79% 
 
45.26% 
 
 
 
Stafford and Other [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Non-federally insured student loans receivable - held for sale
 
 
 
 
 
Consolidation Loans [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Non-federally insured student loans receivable - held for sale
 
 
 
 
 
held for investment [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
24,858,860 
 
24,995,880 
 
 
 
Loan discount, net of unamortized loan premiums and deferred origination costs
(103,551)
 
(113,357)
 
 
 
Student loans receivable
24,701,112 
 
24,830,621 
 
 
 
held for investment [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
24,792,577 
 
24,969,846 
 
 
 
Allowance for loan losses
42,406 
 
40,120 
 
 
 
held for investment [Member] |
Non-federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
66,283 
 
26,034 
 
 
 
Allowance for loan losses
11,791 
 
11,782 
 
 
 
held for investment [Member] |
Stafford and Other [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
6,884,348 
 
7,261,114 
 
 
 
held for investment [Member] |
Consolidation Loans [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
17,908,229 
 
17,708,732 
 
 
 
held for sale [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Loan discount, net of unamortized loan premiums and deferred origination costs
 
 
 
 
 
Student loans receivable
28,480 
 
 
 
 
 
held for sale [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Allowance for loan losses
 
 
 
 
 
held for sale [Member] |
Non-federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Allowance for loan losses
$ 0 
 
 
 
 
 
Student Loans Receivable and Allowance for Loan Losses Allowance for Loan Losses (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
 
 
Allowance for loan losses - balance
$ 51,611 
$ 49,657 
$ 51,902 
$ 48,482 
$ 54,197 
$ 48,209 
Provision for loan losses
5,000 
5,000 
15,000 
18,000 
 
 
Charge-offs
(4,048)
(6,507)
(14,742)
(19,298)
 
 
Federally insured loans [Member]
 
 
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
 
 
Allowance for loan losses - balance
 
 
 
 
42,406 
35,614 
Provision for loan losses
5,000 
5,000 
16,000 
18,000 
 
 
Charge-offs
(3,142)
(5,449)
(12,472)
(16,943)
 
 
Purchase (sale) of federally insured loans and other, net
700 
(928)
(1,243)
(2,647)
 
 
Non-federally insured loans [Member]
 
 
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
 
 
Allowance for loan losses - balance
 
 
 
 
11,791 
12,595 
Provision for loan losses
(1,000)
 
 
Charge-offs
(906)
(1,058)
(2,270)
(2,355)
 
 
Recoveries - non-federally insured loans
363 
399 
1,173 
1,104 
 
 
Transfer from repurchase obligation related to non-federally insured loans purchased, net
$ 571 
$ 588 
$ 2,107 
$ 2,568 
 
 
Student Loans Receivable and Allowance for Loan Losses Repurchase Obligations (Details) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Dec. 31, 2012
Sep. 30, 2013
Cumulative non-federally insured loans participated subject to repurchase agreement [Member]
Dec. 31, 2011
Non-federally insured loans sold subject to repurchase agreement [Member]
Sep. 30, 2013
Non-federally insured loans sold subject to repurchase agreement [Member]
Repurchase Obligation [Line Items]
 
 
 
 
 
 
 
 
Cumulative amount of participated non-federally insured student loans
 
 
 
 
 
$ 98,500,000 
 
 
Days delinquent to trigger repurchase range, minimum
 
 
 
 
 
60 
 
 
Days delinquent to trigger repurchase range, maximum
 
 
 
 
 
90 
 
 
Proceeds from sale of non-federally insured student loans subject to repurchase agreements
 
 
 
 
 
 
91,300,000 
 
Percent of par value of non-federally insured student loans subject to repurchase agreements
 
 
 
 
 
 
100.00% 
 
Days delinquent to trigger repurchase
 
 
 
 
 
 
60 
 
Change in Repurchase Obligation [Roll Forward]
 
 
 
 
 
 
 
 
Beginning balance
14,594,000 
17,243,000 
16,130,000 
19,223,000 
 
 
 
 
Transfer to the allowance for loan losses related to loans sold, net
(571,000)
(588,000)
(2,107,000)
(2,568,000)
 
 
 
 
Ending balance
14,023,000 
16,655,000 
14,023,000 
16,655,000 
 
 
 
 
Student loans receivable
$ 24,701,112,000 
 
$ 24,701,112,000 
 
$ 24,830,621,000 
 
 
$ 66,000,000 
Student Loans Receivable and Allowance for Loan Losses Student Loan Status and Delinquency (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2012
Federally insured loans, excluding rehabiliation loans [Member]
 
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
 
Loans in-school/grace/deferment
$ 2,780,442 
$ 2,949,320 
$ 3,163,918 
Loans in forbearance
2,953,119 
2,992,023 
2,868,168 
Student loans receivable, gross
21,964,256 
22,579,744 
21,719,777 
Loans in repayment status:
 
 
 
Loans current
14,157,330 
14,583,044 
13,673,217 
Loans current, percentage
87.20% 
87.60% 
87.20% 
Loans delinquent 31-60 days
662,814 
652,351 
586,021 
Loans delinquent 31-60 days, percentage
4.10% 
3.90% 
3.70% 
Loans delinquent 61-90 days
354,975 
330,885 
308,377 
Loans delinquent 61-90 days, percentage
2.20% 
2.00% 
2.00% 
Loans delinquent 91-120 days
235,681 
247,381 
237,941 
Loans delinquent 91-120 days, percentage
1.50% 
1.50% 
1.50% 
Loans delinquent 121-270 days
624,042 
603,942 
628,697 
Loans delinquent 121-270 days, percentage
3.80% 
3.60% 
4.00% 
Loans delinquent 271 days or greater
195,853 
220,798 
253,438 
Loans delinquent 271 days or greater, percentage
1.20% 
1.40% 
1.60% 
Total loans in repayment
16,230,695 
16,638,401 
15,687,691 
Total loans in repayment, percentage
100.00% 
100.00% 
100.00% 
Rehabilitation loans [Member]
 
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
 
Loans in-school/grace/deferment
259,377 
150,317 
90,836 
Loans in forbearance
443,629 
330,278 
129,257 
Student loans receivable, gross
2,828,321 
2,390,102 
895,831 
Loans in repayment status:
 
 
 
Loans current
1,078,730 
670,205 
418,584 
Loans current, percentage
50.70% 
35.10% 
61.90% 
Loans delinquent 31-60 days
188,583 
113,795 
52,053 
Loans delinquent 31-60 days, percentage
8.90% 
6.00% 
7.70% 
Loans delinquent 61-90 days
125,310 
79,691 
35,104 
Loans delinquent 61-90 days, percentage
5.90% 
4.20% 
5.20% 
Loans delinquent 91-120 days
137,016 
186,278 
33,931 
Loans delinquent 91-120 days, percentage
6.40% 
9.80% 
5.00% 
Loans delinquent 121-270 days
354,192 
633,001 
99,041 
Loans delinquent 121-270 days, percentage
16.70% 
33.10% 
14.70% 
Loans delinquent 271 days or greater
241,484 
226,537 
37,025 
Loans delinquent 271 days or greater, percentage
11.40% 
11.80% 
5.50% 
Total loans in repayment
2,125,315 
1,909,507 
675,738 
Total loans in repayment, percentage
100.00% 
100.00% 
100.00% 
Federally insured loans [Member]
 
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
 
Student loans receivable, gross
$ 24,792,577 
$ 24,969,846 
$ 22,615,608 
Non-federally insured loans [Member]
 
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
 
Loans Delinquent 31 Days or Greater in Percentage
13.40% 
28.60% 
26.00% 
Outstanding Debt Obligations (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2012
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
$ 24,858,455 
$ 25,098,835 
 
Variable-rate bonds and notes [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
23,523,022 
22,155,065 
 
Bonds and notes based on indices [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
22,632,522 
21,185,140 
 
Interest rate range - minimum
0.27% 
0.32% 
 
Interest rate range - maximum
6.90% 
6.90% 
 
Final maturity, start
Nov. 25, 2015 
Nov. 25, 2015 
 
Final maturity, end
Aug. 26, 2052 
Aug. 26, 2052 
 
Bonds and notes based on auction or remarketing [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
890,500 
969,925 
 
Interest rate range - minimum
0.08% 
0.15% 
 
Interest rate range - maximum
2.13% 
2.14% 
 
Final maturity, start
May 01, 2028 
May 01, 2028 
 
Final maturity, end
May 25, 2042 
May 25, 2042 
 
FFELP warehouse facilities [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
1,277,650 
1,554,151 
 
Interest rate range - minimum
0.18% 
0.21% 
 
Interest rate range - maximum
0.28% 
0.29% 
 
Final maturity, start
Jan. 17, 2016 
Jan. 31, 2015 
 
Final maturity, end
Jun. 12, 2016 
Jun. 30, 2015 
 
Department of Education Conduit [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
 
1,344,513 
 
Interest rate range - minimum
 
0.82% 
 
Interest rate range - maximum
 
0.82% 
 
Final maturity, start
 
Jan. 19, 2014 
 
Final maturity, end
 
Jan. 19, 2014 
 
Line of Credit [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
 
55,000 
 
Interest rate range - minimum
1.68% 
1.71% 
 
Interest rate range - maximum
1.68% 
1.71% 
 
Final maturity, start
Mar. 28, 2018 
Feb. 17, 2016 
 
Final maturity, end
Mar. 28, 2018 
Feb. 17, 2016 
 
Unsecured debt - Junior Subordinated Hybrid Securities [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
99,232 
99,232 
100,697 
Interest rate range - minimum
3.62% 
3.68% 
 
Interest rate range - maximum
3.62% 
3.68% 
 
Final maturity, start
Sep. 15, 2061 
Sep. 15, 2061 
 
Final maturity, end
Sep. 15, 2061 
Sep. 15, 2061 
 
Other borrowings [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
61,828 
62,904 
 
Interest rate range - minimum
1.68% 
1.50% 
 
Interest rate range - maximum
5.10% 
5.10% 
 
Final maturity, start
Nov. 14, 2013 
Nov. 14, 2013 
 
Final maturity, end
Nov. 11, 2015 
Nov. 11, 2015 
 
Bonds and notes payable, gross [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
25,036,732 
25,270,865 
 
Discount on bonds and notes payable [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
(178,277)
(172,030)
 
Line of Credit [Member] |
Line of Credit [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Bonds and notes payable
$ 75,000 
 
 
Bonds and Notes Payable Outstanding Lines of Credit (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 3 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 3 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2013
Line of Credit [Member]
Sep. 30, 2013
NHELP-II Warehouse [Member]
Dec. 31, 2013
NHELP-I Warehouse [Member]
Sep. 30, 2013
NHELP-I Warehouse [Member]
Sep. 30, 2013
NFSLW-I Warehouse [Member]
Sep. 30, 2013
NHELP-III Warehouse [Member]
Sep. 30, 2013
FFELP Warehouse Total [Member]
Sep. 30, 2013
Department of education conduit [Member]
Sep. 30, 2013
Line of Credit [Member]
Dec. 31, 2012
Line of Credit [Member]
Sep. 30, 2013
Line of Credit [Member]
Sep. 30, 2013
February 17, 2012 [Member]
Line of Credit [Member]
Sep. 30, 2013
February 17, 2012 [Member]
Line of Credit [Member]
Sep. 30, 2013
September 16, 2013 [Member]
NHELP-III Warehouse [Member]
Jun. 30, 2013
June 3, 2013 [Member]
NHELP-II Warehouse [Member]
Jun. 30, 2013
June 13, 2013 [Member]
NFSLW-I Warehouse [Member]
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line of credit facility, termination date
 
 
 
 
Oct. 01, 2013 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum financing amount
 
 
 
$ 500,000 1
 
$ 500,000 2
$ 500,000 3
$ 750,000 4
$ 2,250,000 
 
 
 
 
$ 250,000 
$ 275,000 
 
 
 
Debt Instrument, Maturity Date Range, End
 
 
 
Feb. 28, 2016 1
 
 
Jun. 12, 2016 3
Jan. 17, 2016 4
 
 
Mar. 28, 2018 
Feb. 17, 2016 
 
 
 
 
 
 
Debt and Capital Lease Obligations
24,858,455 
25,098,835 
 
 
 
 
 
 
 
 
 
55,000 
75,000 
 
 
 
 
 
Amount outstanding
 
 
 
373,258 1
 
2
266,622 3
637,770 4
1,277,650 
1,300,000 
 
 
 
 
 
 
 
 
Amount available
 
 
200,000 
126,742 1
 
500,000 2
233,378 3
112,230 4
972,350 
 
 
 
 
 
 
 
 
 
Initiation date
 
 
Feb. 17, 2012 
 
 
 
 
Jan. 16, 2013 
 
 
 
 
 
 
 
 
 
 
Expiration of liquidity provisions
 
 
 
Feb. 28, 2014 1
 
 
Jun. 12, 2014 3
Jan. 16, 2014 4
 
 
 
 
 
 
 
 
 
 
Advanced as equity support
 
 
 
$ 33,863 1
 
$ 0 2
$ 11,647 3
$ 36,926 4
$ 82,436 
 
 
 
 
 
 
 
 
 
Minimum Advance Rates - range minimum
 
 
 
84.50% 1
 
 
84.00% 3
92.20% 4
 
 
 
 
 
 
 
 
 
 
Minimum advance rates - range maximum
 
 
 
94.50% 1
 
 
90.00% 3
95.00% 4
 
 
 
 
 
 
 
 
 
 
Maximum Advance Rates - range minimum
 
 
 
84.50% 1
 
 
92.00% 3
92.20% 4
 
 
 
 
 
 
 
 
 
 
Maximum advance rates - range maximum
 
 
 
94.50% 1
 
 
98.00% 3
95.00% 4
 
 
 
 
 
 
 
 
 
 
Line of credit facility, date of amendment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep. 16, 2013 
Jun. 03, 2013 
Jun. 13, 2013 
Bonds and Notes Payable Asset-backed Securitizations (Details) (USD $)
9 Months Ended 9 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2013
2013-5 Securitization [Member]
Sep. 30, 2013
2013-3 Securitization [Member]
Sep. 30, 2013
2013-1 Securitization [Member]
Sep. 30, 2013
2013-2 Securitization [Member]
Sep. 30, 2013
2013-4 Securitization [Member]
Sep. 30, 2013
2013 Securitization [Member]
Sep. 30, 2013
Class A [Member]
2013-5 Securitization [Member]
Sep. 30, 2013
Class A [Member]
2013-3 Securitization [Member]
Sep. 30, 2013
Class A [Member]
2013-1 Securitization [Member]
Sep. 30, 2013
Class A [Member]
2013-2 Securitization [Member]
Sep. 30, 2013
Class A [Member]
2013-4 Securitization [Member]
Sep. 30, 2013
Class A [Member]
2013 Securitization [Member]
Sep. 30, 2013
Class B [Member]
Sep. 30, 2013
Class B [Member]
2013-5 Securitization [Member]
Sep. 30, 2013
Class B [Member]
2013-3 Securitization [Member]
Sep. 30, 2013
Class B [Member]
2013-1 Securitization [Member]
Sep. 30, 2013
Class B [Member]
2013-2 Securitization [Member]
Sep. 30, 2013
Class B [Member]
2013-4 Securitization [Member]
Sep. 30, 2013
Class B [Member]
2013 Securitization [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset-backed securitization issuance, Unamortized Discount
 
 
 
 
 
 
 
 
$ (4,881,000)1
$ 0 
$ 0 
$ (3,325,000)1
$ (1,690,000)
$ (9,896,000)
 
 
$ (1,762,000)
$ (1,525,000)
 
$ (1,804,000)
$ (5,091,000)
Asset-backed securitization, issuance date
 
 
Sep. 30, 2013 1
Apr. 30, 2013 
Jan. 31, 2013 
Feb. 28, 2013 1
Jun. 21, 2013 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset-backed securitization issuance, Face Amount
 
 
399,000,000 1
765,000,000 
437,500,000 
1,122,000,000 1
453,000,000 
3,176,500,000 
399,000,000 1
745,000,000 
428,000,000 
1,122,000,000 1
440,000,000 
3,134,000,000 
 
 
20,000,000 
9,500,000 
 
13,000,000 
42,500,000 
Long-term Debt, Fair Value
 
 
 
 
 
 
 
 
394,119,000 1
745,000,000 
428,000,000 
1,118,675,000 1
438,310,000 
3,124,104,000 
 
 
18,238,000 
7,975,000 
 
11,196,000 
37,409,000 
Debt Instrument, Basis Spread on Variable Rate
 
 
 
 
 
 
 
 
0.00% 1
0.50% 
0.60% 
0.00% 1
0.50% 
 
 
 
1.50% 
1.50% 
 
1.50% 
 
Debt Instrument, Maturity Date Range, End
 
 
 
 
 
 
 
 
Jan. 25, 2037 1
Feb. 25, 2037 
Jun. 25, 2041 
Jul. 25, 2040 1
Dec. 26, 2042 
 
 
 
Jul. 25, 2047 
Mar. 25, 2048 
 
Jan. 25, 2047 
 
Class B subordinated notes purchased with issuance of asset-backed securitizations (off-balance sheet)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
85,500,000 
9,000,000 
 
 
34,000,000 
 
 
Debt and Capital Lease Obligations
$ 24,858,455,000 
$ 25,098,835,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bonds and Notes Payable Debt Repurchases (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Debt Instrument [Line Items]
 
 
 
 
Gain on sale of loans and debt repurchases net
$ 2,138,000 
$ 195,000 
$ 10,900,000 
$ 1,130,000 
Debt [Member] |
Asset-backed Securities [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Gain on sale of loans and debt repurchases net
2,100,000 
200,000 
10,900,000 
1,100,000 
Quarter to date [Member] |
Debt [Member] |
Asset-backed Securities [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt Instrument, Repurchased Face Amount
15,400,000 
4,100,000 
15,400,000 
4,100,000 
Year to date[Member] |
Debt [Member] |
Asset-backed Securities [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Debt Instrument, Repurchased Face Amount
$ 84,700,000 
$ 21,700,000 
$ 84,700,000 
$ 21,700,000 
Derivative Financial Instruments Outstanding (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Dec. 31, 2012
Derivative [Line Items]
 
 
 
Student loans receivable
$ 24,701,112 
 
$ 24,830,621 
Bonds and notes payable
24,858,455 
 
25,098,835 
Junior Subordinated Hybrid Securities [Member]
 
 
 
Derivative [Line Items]
 
 
 
Unsecured debt scheduled interest rate change date
Sep. 29, 2036 
Sep. 29, 2036 
 
Bonds and notes payable
99,232 
100,697 
99,232 
Junior subordinated hybrid securities, description of variable rate basis
three-month LIBOR 
three-month LIBOR 
 
Weighted average basis spread on variable rate
3.375% 
3.375% 
 
Junior Subordinated Hybrid Securities [Member] |
Maturity 2036 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
25,000 
 
75,000 
Derivative, Average Fixed Interest Rate
4.28% 1
 
4.28% 1
1:3 basis swaps [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
8,000,000 2
5,600,000 
7,500,000 2
Derivative, Type of Interest Rate Paid on Swap
one-month LIBOR 
 
 
Weighted average basis spread on variable rate
3.50% 
 
3.30% 
1:3 basis swaps [Member] |
One-month LIBOR, Daily reset [Member]
 
 
 
Derivative [Line Items]
 
 
 
Student loans receivable
23,700,000 
 
 
Derivative, Description of Variable Rate Basis
one-month LIBOR 
 
 
1:3 basis swaps [Member] |
Three-month treasury bill, Daily reset [Member]
 
 
 
Derivative [Line Items]
 
 
 
Student loans receivable
1,000,000 
 
 
Derivative, Description of Variable Rate Basis
three-month treasury bill rate 
 
 
1:3 basis swaps [Member] |
Three-month LIBOR, Quarterly reset [Member]
 
 
 
Derivative [Line Items]
 
 
 
Bonds and notes payable
15,200,000 
 
 
Derivative, Description of Variable Rate Basis
three-month LIBOR 
 
 
1:3 basis swaps [Member] |
One-month LIBOR, Monthly reset [Member]
 
 
 
Derivative [Line Items]
 
 
 
Bonds and notes payable
8,100,000 
 
 
Derivative, Description of Variable Rate Basis
one-month LIBOR 
 
 
1:3 basis swaps [Member] |
Maturity 2021 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
250,000 
 
250,000 
1:3 basis swaps [Member] |
Maturity 2022 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
1,900,000 
 
1,900,000 
1:3 basis swaps [Member] |
Maturity 2023 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
3,650,000 
 
3,150,000 
1:3 basis swaps [Member] |
Maturity 2024 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
250,000 
 
250,000 
1:3 basis swaps [Member] |
Maturity 2026 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
800,000 
 
800,000 
1:3 basis swaps [Member] |
Maturity 2028 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
100,000 
 
100,000 
1:3 basis swaps [Member] |
Maturity 2036 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
700,000 
 
700,000 
1:3 basis swaps [Member] |
Maturity 2039 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
150,000 3
 
150,000 3
1:3 basis swaps [Member] |
Maturity 2040 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
200,000 4
 
200,000 4
Fixed Rate Floor Income Interest Rate Swap [Member]
 
 
 
Derivative [Line Items]
 
 
 
Student loans receivable
11,200,000 
 
11,300,000 
Notional amount
4,850,000 
 
7,500,000 
Derivative, Average Fixed Interest Rate
0.81% 5
 
0.78% 5
Weighted Average Variable Conversion Rate
1.82% 
 
 
Fixed Rate Floor Income Interest Rate Swap [Member] |
Maturity 2013 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
 
3,150,000 
Derivative, Average Fixed Interest Rate
0.00% 5
 
0.71% 5
Fixed Rate Floor Income Interest Rate Swap [Member] |
Maturity 2014 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
1,750,000 
 
1,750,000 
Derivative, Average Fixed Interest Rate
0.71% 5
 
0.71% 5
Fixed Rate Floor Income Interest Rate Swap [Member] |
Maturity 2015 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
1,100,000 
 
1,100,000 
Derivative, Average Fixed Interest Rate
0.89% 5
 
0.89% 5
Fixed Rate Floor Income Interest Rate Swap [Member] |
Maturity 2016 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
750,000 
 
750,000 
Derivative, Average Fixed Interest Rate
0.85% 5
 
0.85% 5
Fixed Rate Floor Income Interest Rate Swap [Member] |
Maturity 2017 [Member]
 
 
 
Derivative [Line Items]
 
 
 
Notional amount
$ 1,250,000 
 
$ 750,000 
Derivative, Average Fixed Interest Rate
0.86% 5
 
0.99% 5
Derivative Financial Instruments Cross-currency Interest Rate Swaps (Details)
3 Months Ended 9 Months Ended
Sep. 30, 2013
USD ($)
Sep. 30, 2012
USD ($)
Sep. 30, 2013
USD ($)
Sep. 30, 2012
USD ($)
Dec. 31, 2012
USD ($)
Sep. 30, 2013
Cross-currency interest rate swap 1 [Member]
USD ($)
Sep. 30, 2013
Cross-currency interest rate swap 1 [Member]
EUR (€)
Sep. 30, 2013
Cross currency interest rate swap 2 [Member]
USD ($)
Sep. 30, 2013
Cross currency interest rate swap 2 [Member]
EUR (€)
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
 
 
 
 
 
Bonds and notes payable
$ 24,858,455,000 
 
$ 24,858,455,000 
 
$ 25,098,835,000 
 
€ 420,500,000 
 
€ 352,700,000 
Notional Amount of Foreign Currency Derivative Instruments Not Designated as Hedging Instruments
 
 
 
 
 
500,000,000 
420,500,000 
450,000,000 
352,700,000 
Re-measurement of Euro Notes
(39,974,000)
(20,799,000)
(25,902,000)
6,186,000 
 
 
 
 
 
Change in fair value of cross currency interest rate swaps
39,074,000 
24,586,000 
18,978,000 
(24,934,000)
 
 
 
 
 
Total impact to statements of income - income (expense)
$ (900,000)1
$ 3,787,000 1
$ (6,924,000)1
$ (18,748,000)1
 
 
 
 
 
Derivative Financial Instruments Fair Value of Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2013
Sep. 30, 2012
Dec. 31, 2012
Derivatives, Fair Value [Line Items]
 
 
 
 
Fair value of derivative instruments, asset
$ 128,276 
$ 128,276 
 
$ 97,441 
Fair value of derivative instruments, liability
21,513 
21,513 
 
70,890 
Cash collateral received
73,734 1
73,734 1
 
19,993 1
Cash collateral pledged
4,000 2
4,000 2
 
63,128 2
Payments to terminate and/or amend derivative instruments
2,700 
6,469 
6,430 
 
1:3 basis swaps [Member]
 
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
 
Fair value of derivative instruments, asset
20,425 
20,425 
 
12,239 
Fair value of derivative instruments, liability
 
1,215 
Interest rate swaps - floor income hedges [Member]
 
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
 
Fair value of derivative instruments, asset
6,032 
6,032 
 
Fair value of derivative instruments, liability
18,186 
18,186 
 
45,913 
Interest rate swaps - hybrid debt hedges [Member]
 
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
 
Fair value of derivative instruments, asset
 
Fair value of derivative instruments, liability
3,327 
3,327 
 
23,762 
Cross-currency interest rate swaps [Member]
 
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
 
Fair value of derivative instruments, asset
101,819 
101,819 
 
82,841 
Fair value of derivative instruments, liability
 
Other [Member]
 
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
 
Fair value of derivative instruments, asset
 
2,361 
Fair value of derivative instruments, liability
$ 0 
$ 0 
 
$ 0 
Derivative Financial Instruments Gross/Net (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative instruments, asset
$ 128,276 
$ 97,441 
Fair value of derivative instruments, liability
(21,513)
(70,890)
Derivatives subject to enforceable master netting arrangement, asset
(17,991)
(13,234)
Derivatives subject to enforceable master netting arrangement, liability
17,991 
13,234 
Cash collateral received
(73,734)1
(19,993)1
Cash collateral pledged
4,000 2
63,128 2
Fair value of derivative instruments, asset, net
36,551 
64,214 
Fair value of derivative instruments, liability, net
$ (478)
$ (5,472)
Derivative Financial Instruments Income Statement Effect of Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
$ (6,688)
$ (5,051)
$ (23,229)
$ (6,910)
Change in fair value
30,014 
(5,425)
73,743 
(67,349)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
(39,974)
(20,799)
(25,902)
6,186 
Derivative market value and foreign currency adjustments and derivative settlements - income (expense)
(16,648)
(31,275)
24,612 
(68,073)
1:3 basis swaps [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
781 
1,100 
2,474 
3,651 
Change in fair value
(2,161)
(4,578)
9,402 
(2,005)
Interest rate swaps - floor income hedges [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(7,178)
(5,595)
(24,017)
(12,237)
Change in fair value
(9,599)
(29,903)
33,231 
(41,681)
Interest rate swaps - hybrid debt hedges [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(256)
(733)
(1,413)
(1,479)
Change in fair value
2,700 
1,695 
11,790 
(890)
Cross-currency interest rate swaps [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(35)
227 
(273)
3,390 
Change in fair value
39,074 
24,586 
18,978 
(24,934)
Other [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(50)
(235)
Change in fair value
$ 0 
$ 2,775 
$ 342 
$ 2,161 
Investments and Restricted Investments Summary (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Investment Holdings [Line Items]
 
 
Guaranteed investment contracts - held-to-maturity
 
$ 8,830 1
Investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Fair value
232,663 
83,312 
Investments [Member] |
Available-for-sale investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
213,098 
68,419 
Gross unrealized gains
10,054 
4,791 
Gross unrealized losses
(973)2
(359)
Fair value
222,179 
72,851 
Investments [Member] |
Available-for-sale investments [Member] |
Student Loan Asset-Backed and Other Debt Securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
211,548 3
64,970 3
Gross unrealized gains
8,535 3
3,187 3
Gross unrealized losses
(968)2 3
(179)3
Fair value
219,115 3
67,978 3
Investments [Member] |
Available-for-sale investments [Member] |
Equity securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
1,550 
3,449 
Gross unrealized gains
1,519 
1,604 
Gross unrealized losses
(5)2
(180)
Fair value
3,064 
4,873 
Investments [Member] |
Trading investments [Member] |
Student Loan Asset-Backed and Other Debt Securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Fair value
$ 10,484 
$ 10,461 
Investments Realized Gains (Losses) on Available-for-Sale Securities (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Gain (Loss) on Investments [Line Items]
 
 
 
 
Other income
$ 730 
$ 2,618 
$ 2,246 
$ 4,848 
Income tax expense
(270)
(969)
(831)
(1,794)
Net
$ 460 
$ 1,649 
$ 1,415 
$ 3,054 
Income Taxes (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Jun. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Income Tax Disclosure [Abstract]
 
 
 
 
 
Effective Income Tax Rate, Continuing Operations
32.60% 
37.20% 
 
34.80% 
33.00% 
Income tax benefit from resolution of uncertain tax positions
$ 4.1 
 
$ 4.6 
 
 
Reversal of Interest Expense
1.3 
 
 
1.3 
 
After Tax Reversal of Interest Expense
$ 0.8 
 
 
$ 0.8 
 
Earnings per Common Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Net income attributable to Nelnet, Inc.
$ 62,830 
$ 36,828 
$ 232,152 
$ 121,363 
Weighted average common shares outstanding - basic and diluted
46,496,612 
47,460,308 
46,593,241 
47,399,207 
Earnings per share - basic and diluted
$ 1.35 
$ 0.78 
$ 4.98 
$ 2.56 
Antidilutive securities excluded from computation of earnings per share
Common shareholders [Member]
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Net income attributable to Nelnet, Inc.
62,277 
36,538 
230,141 
120,452 
Weighted average common shares outstanding - basic and diluted
46,086,743 
47,086,182 
46,189,200 
47,042,062 
Earnings per share - basic and diluted
$ 1.35 
$ 0.78 
$ 4.98 
$ 2.56 
Unvested restricted stock shareholders [Member]
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Net income attributable to Nelnet, Inc.
$ 553 
$ 290 
$ 2,011 
$ 911 
Weighted average common shares outstanding - basic and diluted
409,869 
374,126 
404,041 
357,145 
Earnings per share - basic and diluted
$ 1.35 
$ 0.78 
$ 4.98 
$ 2.56 
Shares Issued - Deferred [Member]
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Non Employee Director Stock, Cumulative Deferred Shares
127,129 
 
127,129 
 
Segment Reporting (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
$ 160,237 
$ 151,668 
$ 476,939 
$ 457,864 
Interest expense
55,315 
66,402 
171,800 
203,175 
Net interest income
104,922 
85,266 
305,139 
254,689 
Less provision for loan losses
(5,000)
(5,000)
(15,000)
(18,000)
Net interest income after provision for loan losses
99,922 
80,266 
290,139 
236,689 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
64,582 
53,285 
180,261 
155,164 
Intersegment servicing revenue
Tuition payment processing and campus commerce revenue
19,927 
17,928 
61,694 
56,675 
Enrollment services revenue
22,563 
30,661 
76,343 
92,035 
Other income
8,613 
12,699 
30,317 
32,453 
Gain on sale of loans and debt repurchases
2,138 
195 
10,900 
1,130 
Derivative market value and foreign currency adjustments, net
(9,960)
(26,224)
47,841 
(61,163)
Derivative settlements, net
(6,688)
(5,051)
(23,229)
(6,910)
Total other income (expense)
101,175 
83,493 
384,127 
269,384 
Operating expenses:
 
 
 
 
Salaries and benefits
48,712 
46,395 
144,049 
144,193 
Cost to provide enrollment services
14,668 
20,151 
51,097 
62,203 
Depreciation and amortization
4,340 
8,402 
13,037 
24,764 
Other
39,887 
29,989 
109,193 
93,160 
Intersegment expenses, net
Total operating expenses
107,607 
104,937 
317,376 
324,320 
Income (loss) before income taxes and corporate overhead allocation
93,490 
58,822 
356,890 
181,753 
Corporate overhead allocation
Income (loss) before income taxes
93,490 
58,822 
356,890 
181,753 
Income tax (expense) benefit
(30,444)
(21,870)
(123,637)
(59,978)
Net income (loss)
63,046 
36,952 
233,253 
121,775 
Net income attributable to noncontrolling interest
216 
124 
1,101 
412 
Net income (loss) attributable to Nelnet, Inc.
62,830 
36,828 
232,152 
121,363 
Student Loan and Guaranty Servicing [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
10 
12 
29 
44 
Interest expense
Net interest income
10 
12 
29 
44 
Less provision for loan losses
Net interest income after provision for loan losses
10 
12 
29 
44 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
64,582 
53,285 
180,261 
155,164 
Intersegment servicing revenue
13,519 
15,855 
42,375 
49,210 
Tuition payment processing and campus commerce revenue
Enrollment services revenue
Other income
Gain on sale of loans and debt repurchases
Derivative market value and foreign currency adjustments, net
Derivative settlements, net
Total other income (expense)
78,101 
69,140 
222,636 
204,374 
Operating expenses:
 
 
 
 
Salaries and benefits
29,719 
27,716 
86,254 
85,663 
Cost to provide enrollment services
Depreciation and amortization
2,677 
4,691 
8,197 
13,629 
Other
19,752 
16,775 
56,173 
52,980 
Intersegment expenses, net
1,457 
1,262 
3,243 
3,832 
Total operating expenses
53,605 
50,444 
153,867 
156,104 
Income (loss) before income taxes and corporate overhead allocation
24,506 
18,708 
68,798 
48,314 
Corporate overhead allocation
(1,822)
(1,337)
(4,332)
(4,115)
Income (loss) before income taxes
22,684 
17,371 
64,466 
44,199 
Income tax (expense) benefit
(8,620)
(6,601)
(24,498)
(16,796)
Net income (loss)
14,064 
10,770 
39,968 
27,403 
Net income attributable to noncontrolling interest
Net income (loss) attributable to Nelnet, Inc.
14,064 
10,770 
39,968 
27,403 
Tuition Payment Processing and Campus Commerce [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
Interest expense
Net interest income
Less provision for loan losses
Net interest income after provision for loan losses
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
Intersegment servicing revenue
Tuition payment processing and campus commerce revenue
19,927 
17,928 
61,694 
56,675 
Enrollment services revenue
Other income
Gain on sale of loans and debt repurchases
Derivative market value and foreign currency adjustments, net
Derivative settlements, net
Total other income (expense)
19,927 
17,928 
61,694 
56,675 
Operating expenses:
 
 
 
 
Salaries and benefits
9,229 
8,578 
28,015 
25,771 
Cost to provide enrollment services
Depreciation and amortization
1,117 
1,703 
3,387 
5,174 
Other
1,908 
2,285 
6,387 
7,557 
Intersegment expenses, net
1,431 
1,379 
4,350 
4,042 
Total operating expenses
13,685 
13,945 
42,139 
42,544 
Income (loss) before income taxes and corporate overhead allocation
6,242 
3,986 
19,555 
14,139 
Corporate overhead allocation
(607)
(446)
(1,443)
(1,372)
Income (loss) before income taxes
5,635 
3,540 
18,112 
12,767 
Income tax (expense) benefit
(2,141)
(1,345)
(6,882)
(4,851)
Net income (loss)
3,494 
2,195 
11,230 
7,916 
Net income attributable to noncontrolling interest
Net income (loss) attributable to Nelnet, Inc.
3,494 
2,195 
11,230 
7,916 
Enrollment Services [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
Interest expense
Net interest income
Less provision for loan losses
Net interest income after provision for loan losses
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
Intersegment servicing revenue
Tuition payment processing and campus commerce revenue
Enrollment services revenue
22,563 
30,661 
76,343 
92,035 
Other income
Gain on sale of loans and debt repurchases
Derivative market value and foreign currency adjustments, net
Derivative settlements, net
Total other income (expense)
22,563 
30,661 
76,343 
92,035 
Operating expenses:
 
 
 
 
Salaries and benefits
4,491 
5,147 
15,067 
17,587 
Cost to provide enrollment services
14,668 
20,151 
51,097 
62,203 
Depreciation and amortization
57 
1,633 
179 
4,867 
Other
1,556 
1,782 
4,450 
5,483 
Intersegment expenses, net
1,139 
1,000 
3,418 
2,824 
Total operating expenses
21,911 
29,713 
74,211 
92,964 
Income (loss) before income taxes and corporate overhead allocation
652 
948 
2,132 
(929)
Corporate overhead allocation
(607)
(446)
(1,443)
(1,372)
Income (loss) before income taxes
45 
502 
689 
(2,301)
Income tax (expense) benefit
(17)
(191)
(261)
874 
Net income (loss)
28 
311 
428 
(1,427)
Net income attributable to noncontrolling interest
Net income (loss) attributable to Nelnet, Inc.
28 
311 
428 
(1,427)
Total Fee-Based [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
10 
15 
29 
52 
Interest expense
Net interest income
10 
15 
29 
52 
Less provision for loan losses
Net interest income after provision for loan losses
10 
15 
29 
52 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
64,582 
53,285 
180,261 
155,164 
Intersegment servicing revenue
13,519 
15,855 
42,375 
49,210 
Tuition payment processing and campus commerce revenue
19,927 
17,928 
61,694 
56,675 
Enrollment services revenue
22,563 
30,661 
76,343 
92,035 
Other income
Gain on sale of loans and debt repurchases
Derivative market value and foreign currency adjustments, net
Derivative settlements, net
Total other income (expense)
120,591 
117,729 
360,673 
353,084 
Operating expenses:
 
 
 
 
Salaries and benefits
43,439 
41,441 
129,336 
129,021 
Cost to provide enrollment services
14,668 
20,151 
51,097 
62,203 
Depreciation and amortization
3,851 
8,027 
11,763 
23,670 
Other
23,216 
20,842 
67,010 
66,020 
Intersegment expenses, net
4,027 
3,641 
11,011 
10,698 
Total operating expenses
89,201 
94,102 
270,217 
291,612 
Income (loss) before income taxes and corporate overhead allocation
31,400 
23,642 
90,485 
61,524 
Corporate overhead allocation
(3,036)
(2,229)
(7,218)
(6,859)
Income (loss) before income taxes
28,364 
21,413 
83,267 
54,665 
Income tax (expense) benefit
(10,778)
(8,137)
(31,641)
(20,773)
Net income (loss)
17,586 
13,276 
51,626 
33,892 
Net income attributable to noncontrolling interest
Net income (loss) attributable to Nelnet, Inc.
17,586 
13,276 
51,626 
33,892 
Asset Generation and Management [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
158,793 
150,661 
472,622 
455,413 
Interest expense
56,100 
64,829 
170,502 
199,675 
Net interest income
102,693 
85,832 
302,120 
255,738 
Less provision for loan losses
(5,000)
(5,000)
(15,000)
(18,000)
Net interest income after provision for loan losses
97,693 
80,832 
287,120 
237,738 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
Intersegment servicing revenue
Tuition payment processing and campus commerce revenue
Enrollment services revenue
Other income
3,981 
5,834 
11,207 
14,415 
Gain on sale of loans and debt repurchases
2,138 
195 
10,900 
1,130 
Derivative market value and foreign currency adjustments, net
(12,660)
(30,694)
35,711 
(62,351)
Derivative settlements, net
(6,432)
(4,319)
(21,816)
(5,431)
Total other income (expense)
(12,973)
(28,984)
36,002 
(52,237)
Operating expenses:
 
 
 
 
Salaries and benefits
555 
462 
1,709 
1,723 
Cost to provide enrollment services
Depreciation and amortization
Other
7,939 
3,451 
23,375 
10,203 
Intersegment expenses, net
13,705 
16,064 
42,955 
49,842 
Total operating expenses
22,199 
19,977 
68,039 
61,768 
Income (loss) before income taxes and corporate overhead allocation
62,521 
31,871 
255,083 
123,733 
Corporate overhead allocation
(1,302)
(909)
(3,095)
(3,701)
Income (loss) before income taxes
61,219 
30,962 
251,988 
120,032 
Income tax (expense) benefit
(23,263)
(11,765)
(95,755)
(45,610)
Net income (loss)
37,956 
19,197 
156,233 
74,422 
Net income attributable to noncontrolling interest
Net income (loss) attributable to Nelnet, Inc.
37,956 
19,197 
156,233 
74,422 
Corporate Activity and Overhead [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
2,201 
1,891 
6,708 
5,226 
Interest expense
(18)
2,472 
3,718 
6,327 
Net interest income
2,219 
(581)
2,990 
(1,101)
Less provision for loan losses
Net interest income after provision for loan losses
2,219 
(581)
2,990 
(1,101)
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
Intersegment servicing revenue
Tuition payment processing and campus commerce revenue
Enrollment services revenue
Other income
4,632 
6,865 
19,110 
18,038 
Gain on sale of loans and debt repurchases
Derivative market value and foreign currency adjustments, net
2,700 
4,470 
12,130 
1,188 
Derivative settlements, net
(256)
(732)
(1,413)
(1,479)
Total other income (expense)
7,076 
10,603 
29,827 
17,747 
Operating expenses:
 
 
 
 
Salaries and benefits
4,718 
4,492 
13,004 
13,449 
Cost to provide enrollment services
Depreciation and amortization
489 
375 
1,274 
1,094 
Other
8,732 
5,696 
18,808 
16,937 
Intersegment expenses, net
(4,213)
(3,850)
(11,591)
(11,330)
Total operating expenses
9,726 
6,713 
21,495 
20,150 
Income (loss) before income taxes and corporate overhead allocation
(431)
3,309 
11,322 
(3,504)
Corporate overhead allocation
4,338 
3,138 
10,313 
10,560 
Income (loss) before income taxes
3,907 
6,447 
21,635 
7,056 
Income tax (expense) benefit
3,597 
(1,968)
3,759 
6,405 
Net income (loss)
7,504 
4,479 
25,394 
13,461 
Net income attributable to noncontrolling interest
216 
124 
1,101 
412 
Net income (loss) attributable to Nelnet, Inc.
7,288 
4,355 
24,293 
13,049 
Eliminations [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
(767)
(899)
(2,420)
(2,827)
Interest expense
(767)
(899)
(2,420)
(2,827)
Net interest income
Less provision for loan losses
Net interest income after provision for loan losses
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
Intersegment servicing revenue
(13,519)
(15,855)
(42,375)
(49,210)
Tuition payment processing and campus commerce revenue
Enrollment services revenue
Other income
Gain on sale of loans and debt repurchases
Derivative market value and foreign currency adjustments, net
Derivative settlements, net
Total other income (expense)
(13,519)
(15,855)
(42,375)
(49,210)
Operating expenses:
 
 
 
 
Salaries and benefits
Cost to provide enrollment services
Depreciation and amortization
Other
Intersegment expenses, net
(13,519)
(15,855)
(42,375)
(49,210)
Total operating expenses
(13,519)
(15,855)
(42,375)
(49,210)
Income (loss) before income taxes and corporate overhead allocation
Corporate overhead allocation
Income (loss) before income taxes
Income tax (expense) benefit
Net income (loss)
Net income attributable to noncontrolling interest
Net income (loss) attributable to Nelnet, Inc.
$ 0 
$ 0 
$ 0 
$ 0 
Major Customer (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Sep. 30, 2012
Concentration Risk [Line Items]
 
 
 
 
Concentration Risk, Customer
 
 
Department 
 
Concentration Risk Dollar Value [Member]
 
 
 
 
Concentration Risk [Line Items]
 
 
 
 
Loan and guaranty servicing revenue
$ 26.0 
$ 19.1 
$ 68.4 
$ 50.1 
Related Party Transactions Transactions with Union Financial Services, Inc. (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Sep. 30, 2013
Nelnet, Inc. [Member]
 
Related Party Transaction [Line Items]
 
Aircraft purchase price
$ 5.8 
Percent of aircraft owned after the transaction
65.00% 
Union Financial Services Inc. [Member]
 
Related Party Transaction [Line Items]
 
Proceeds from sale of percentage of aircraft
$ 2.0 
Percent of aircraft owned after the transaction
35.00% 
Chief Executive Officer [Member]
 
Related Party Transaction [Line Items]
 
Percent ownership of Union Financial Services
50.00% 
Stephen Butterfield (who a member of the Board of Directors of the Company) [Member]
 
Related Party Transaction [Line Items]
 
Percent ownership of Union Financial Services
50.00% 
Related Party Transactions Investment Services (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Union Bank and Trust Company [Member]
Sep. 30, 2013
Union Bank and Trust Company [Member]
Sep. 30, 2013
February 14, 2013 Whitetail Rock Capital Management management agreement [Member] [Member]
Feb. 1, 2013
February 14, 2013 Whitetail Rock Capital Management management agreement [Member] [Member]
Chief Executive Officer [Member]
Sep. 30, 2013
February 14, 2013 Whitetail Rock Capital Management management agreement [Member] [Member]
Angela L. Muhleisen (who is Mr. Dunlap's sister, as well as Director, Chairperson, President, and Chief Executive Officer of Union Bank) [Member]
Sep. 30, 2013
February 14, 2013 Whitetail Rock Capital Management management agreement [Member] [Member]
Whitetail Rock Capital Management [Member]
Feb. 1, 2013
February 14, 2013 Whitetail Rock Capital Management management agreement [Member] [Member]
Whitetail Rock Capital Management [Member]
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
Basis points Whitetail Rock Capital Management earns from Union Bank on outstanding balance
 
 
50 
 
 
 
 
Amount invested in funds under Whitetail Rock Capital Management management agreement
 
 
 
$ 3,000,000 
$ 2,000,000 
$ 35,000,000 
$ 100,000 
Maximum percent of gains from the sale of securities managed by Whitetail Rock Capital Management paid to Whitetail Rock Capital Management as additional fees
 
 
 
 
 
50.00% 
 
Percent of basis points earned on outstanding balance paid to custodian
 
 
50.00% 
 
 
 
 
Amount invested in funds under Whitetail Rock Capital Management management as of the date the fund was established
 
 
 
 
 
 
34,500,000 
Financing Receivable, Significant Purchases
478,300,000 
 
 
 
 
 
 
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums, Other
11,400,000 
11,400,000 
 
 
 
 
 
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party
 
$ 17,000 
 
 
 
 
 
Related Party Transactions Transactions with Union Bank and Trust (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2013
Union Bank and Trust Company [Member]
 
 
Related Party Transaction [Line Items]
 
 
Financing Receivable, Significant Purchases
$ 478,300,000 
 
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums, Other
11,400,000 
11,400,000 
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party
 
$ 17,000 
expense [Member] |
Union Bank and Trust Company [Member]
 
 
Related Party Transaction [Line Items]
 
 
PercentOfNetIncomeResultingFromExpansionOfMortgageServicingOperations
 
50.00% 
expense [Member] |
Parent Company [Member]
 
 
Related Party Transaction [Line Items]
 
 
PercentOfNetIncomeResultingFromExpansionOfMortgageServicingOperations
 
50.00% 
Net Income [Member] |
Union Bank and Trust Company [Member]
 
 
Related Party Transaction [Line Items]
 
 
PercentOfNetIncomeResultingFromExpansionOfMortgageServicingOperations
 
50.00% 
Net Income [Member] |
Parent Company [Member]
 
 
Related Party Transaction [Line Items]
 
 
PercentOfNetIncomeResultingFromExpansionOfMortgageServicingOperations
 
50.00% 
Assets and Liabilities that are Measured at Fair Value (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2013
Sep. 30, 2012
Sep. 30, 2013
Fair Value, Measurements, Recurring [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Sep. 30, 2013
Fair Value, Measurements, Recurring [Member]
Student loan asset-backed securities [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Student loan asset-backed securities [Member]
Sep. 30, 2013
Fair Value, Measurements, Recurring [Member]
Equity securities [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Equity securities [Member]
Sep. 30, 2013
Fair Value, Measurements, Recurring [Member]
Debt securities [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Debt securities [Member]
Sep. 30, 2013
Fair Value, Measurements, Recurring [Member]
Level 1 [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Level 1 [Member]
Sep. 30, 2013
Fair Value, Measurements, Recurring [Member]
Level 1 [Member]
Student loan asset-backed securities [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Level 1 [Member]
Student loan asset-backed securities [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Level 1 [Member]
Equity securities [Member]
Sep. 30, 2013
Fair Value, Measurements, Recurring [Member]
Level 1 [Member]
Debt securities [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Level 1 [Member]
Debt securities [Member]
Sep. 30, 2013
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
Sep. 30, 2013
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
Student loan asset-backed securities [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
Student loan asset-backed securities [Member]
Sep. 30, 2013
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
Equity securities [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
Equity securities [Member]
Sep. 30, 2013
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
Debt securities [Member]
Dec. 31, 2012
Fair Value, Measurements, Recurring [Member]
Fair Value, Inputs, Level 2 [Member]
Debt securities [Member]
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments
 
 
$ 232,663 
$ 83,312 
$ 229,095 
$ 77,652 
$ 3,064 
$ 4,873 
$ 504 
$ 787 
$ 3,568 
$ 5,660 
$ 0 
$ 0 
$ 4,873 
$ 504 
$ 787 
$ 229,095 
$ 77,652 
$ 229,095 
$ 77,652 
$ 0 
$ 0 
$ 0 
$ 0 
Fair value of derivative instruments
 
 
128,276 
97,441 
 
 
 
 
 
 
 
 
 
 
 
128,276 
97,441 
 
 
 
 
 
 
Total assets
 
 
360,939 
180,753 
 
 
 
 
 
 
3,568 
5,660 
 
 
 
 
 
357,371 
175,093 
 
 
 
 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of derivative instruments
 
 
21,513 
70,890 
 
 
 
 
 
 
 
 
 
 
 
21,513 
70,890 
 
 
 
 
 
 
Total liabilities
 
 
21,513 
70,890 
 
 
 
 
 
 
 
 
 
 
 
21,513 
70,890 
 
 
 
 
 
 
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Transfers Into Level 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers out of Level 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Liability, Transfers Into Level 3
$ 0 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value of Financial Instruments (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2013
Dec. 31, 2012
Sep. 30, 2012
Mar. 31, 2012
Jun. 30, 2011
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Student loans receivable
$ 24,701,112 
$ 24,830,621 
 
 
 
Non-federally insured student loans receivable - held for sale
28,480 
 
 
 
Cash and cash equivalents
51,391 
66,031 
93,674 
66,031 
42,570 
Investments
232,663 
83,312 
 
 
 
Restricted cash - due to customers
93,695 
96,516 
 
 
 
Accrued interest receivable
303,350 
307,518 
 
 
 
Derivative instruments
128,276 
97,441 
 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
 
Bonds and notes payable
24,858,455 
25,098,835 
 
 
 
Accrued interest payable
14,218 
14,770 
 
 
 
Due to customers
93,695 
96,516 
 
 
 
Derivative instruments
21,513 
70,890 
 
 
 
Level 1 [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Non-federally insured student loans receivable - held for sale
 
 
 
 
Cash and cash equivalents
51,391 
66,031 
 
 
 
Investments
3,568 
5,660 
 
 
 
Restricted cash
668,202 
806,632 
 
 
 
Restricted cash - due to customers
93,695 
96,516 
 
 
 
Restricted investments
6,724 
8,830 
 
 
 
Accrued interest receivable
 
 
 
Derivative instruments
 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
 
Bonds and notes payable
 
 
 
Accrued interest payable
 
 
 
Due to customers
93,695 
96,516 
 
 
 
Derivative instruments
 
 
 
Fair Value, Inputs, Level 2 [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Non-federally insured student loans receivable - held for sale
 
 
 
 
Cash and cash equivalents
 
 
 
Investments
229,095 
77,652 
 
 
 
Restricted cash
 
 
 
Restricted cash - due to customers
 
 
 
Restricted investments
 
 
 
Accrued interest receivable
 
307,518 
 
 
 
Derivative instruments
128,276 
97,441 
 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
 
Bonds and notes payable
24,376,185 
24,486,008 
 
 
 
Accrued interest payable
14,218 
14,770 
 
 
 
Due to customers
 
 
 
Derivative instruments
21,513 
70,890 
 
 
 
Level 3 [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Cash and cash equivalents
 
 
 
Investments
 
 
 
Restricted cash
 
 
 
Restricted cash - due to customers
 
 
 
Restricted investments
 
 
 
Accrued interest receivable
 
 
 
Derivative instruments
 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
 
Bonds and notes payable
 
 
 
Accrued interest payable
 
 
 
Due to customers
 
 
 
Derivative instruments
 
 
 
Fair value [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Cash and cash equivalents
51,391 
66,031 
 
 
 
Investments
232,663 
83,312 
 
 
 
Restricted cash
668,202 
806,632 
 
 
 
Restricted cash - due to customers
93,695 
96,516 
 
 
 
Restricted investments
6,724 
8,830 
 
 
 
Accrued interest receivable
303,350 
307,518 
 
 
 
Derivative instruments
128,276 
97,441 
 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
 
Bonds and notes payable
24,376,185 
24,486,008 
 
 
 
Accrued interest payable
14,218 
14,770 
 
 
 
Due to customers
93,695 
96,516 
 
 
 
Derivative instruments
21,513 
70,890 
 
 
 
Carrying value [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Cash and cash equivalents
51,391 
66,031 
 
 
 
Investments
232,663 
83,312 
 
 
 
Restricted cash
668,202 
806,632 
 
 
 
Restricted cash - due to customers
93,695 
96,516 
 
 
 
Restricted investments
6,724 
8,830 
 
 
 
Accrued interest receivable
 
307,518 
 
 
 
Derivative instruments
128,276 
97,441 
 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
 
Bonds and notes payable
24,858,455 
25,098,835 
 
 
 
Accrued interest payable
14,218 
14,770 
 
 
 
Due to customers
93,695 
96,516 
 
 
 
Derivative instruments
21,513 
70,890 
 
 
 
Fair Value, Inputs, Level 2 [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Accrued interest receivable
303,350 
 
 
 
 
held for investment [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Student loans receivable
24,701,112 
24,830,621 
 
 
 
held for investment [Member] |
Level 1 [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Student loans receivable
 
 
 
held for investment [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Student loans receivable
 
 
 
held for investment [Member] |
Level 3 [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Student loans receivable
25,287,320 
25,418,623 
 
 
 
held for investment [Member] |
Fair value [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Student loans receivable
25,287,320 
25,418,623 
 
 
 
held for investment [Member] |
Carrying value [Member]
 
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
 
Student loans receivable
$ 24,701,112 
$ 24,830,621 
 
 
 
Legal Proceedings (Details) (Pending or Threatened Litigation [Member], USD $)
9 Months Ended
Sep. 30, 2013
Loss Contingencies [Line Items]
 
Loss contingency, inestimable loss
The Company has accrued an immaterial amount related to the legal proceedings described below. However, due to the relatively early stage of these matters and the uncertainty and risks inherent in class determination and the overall litigation process, the Company believes that a meaningful estimate of its exposure to any reasonably possible losses or range of reasonably possible losses, in excess of the amount accrued, cannot currently be made. 
Bais Yaakov of Spring Valley v. Peterson's Nelnet, LLC [Member]
 
Loss Contingencies [Line Items]
 
Loss contingency, actions taken by court, arbitrator or mediator
As of the filing date of this report, the New Jersey District Court has not established, recognized, or certified a class.  
Bais Yaakov of Spring Valley v. Peterson's Nelnet, LLC [Member] |
Named plaintiff [Member]
 
Loss Contingencies [Line Items]
 
Advertising faxes
Loss Contingency, Damages Sought, Value, Per Violation
$ 500 
Bais Yaakov of Spring Valley v. Peterson's Nelnet, LLC [Member] |
Class action members [Member]
 
Loss Contingencies [Line Items]
 
Advertising faxes
10,000 
Loss contingency, damages sought, value
5,000,000 
Loss contingency, damages sought, value if trebled
15,000,000 
Than Zaw v. Nelnet, Inc. [Member]
 
Loss Contingencies [Line Items]
 
Loss contingency, actions taken by court, arbitrator or mediator
As of the filing date of this report, the Court has not established, recognized, or certified a class.  
Than Zaw v. Nelnet, Inc. [Member] |
Named plaintiff [Member]
 
Loss Contingencies [Line Items]
 
Loss Contingency, Damages Sought, Value, Per Violation
5,000 
Grant Keating v. Peterson's Nelnet, LLC et al [Member]
 
Loss Contingencies [Line Items]
 
Loss contingency, actions taken by court, arbitrator or mediator
As of the filing date of this report, the Ohio District Court has not established, recognized, or certified a class. 
Grant Keating v. Peterson's Nelnet, LLC et al [Member] |
Named plaintiff [Member]
 
Loss Contingencies [Line Items]
 
Loss Contingency, Damages Sought, Value, Per Violation
$ 500 
Subsequent Events (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended
Sep. 30, 2013
Dec. 31, 2012
Oct. 31, 2013
Purchase of residual interest [Member]
Subsequent Event [Line Items]
 
 
 
Financing Receivable, Significant Purchases
 
 
$ 1,600,000 
Debt and Capital Lease Obligations
$ 24,858,455 
$ 25,098,835