NELNET INC, 10-K filed on 2/27/2018
Annual Report
Document and Entity Information Document (USD $)
12 Months Ended
Dec. 31, 2017
Jun. 30, 2017
Jan. 31, 2018
Common Class A [Member]
Jan. 31, 2018
Common Class B [Member]
Document Information [Line Items]
 
 
 
 
Entity Registrant Name
NELNET INC 
 
 
 
Document Type
10-K 
 
 
 
Current Fiscal Year End Date
--12-31 
 
 
 
Entity Common Stock, Shares Outstanding
 
 
29,343,603 
11,468,587 
Entity Public Float
 
$ 1,027,524,695 
 
 
Amendment Flag
false 
 
 
 
Entity Central Index Key
0001258602 
 
 
 
Entity Current Reporting Status
Yes 
 
 
 
Entity Voluntary Filers
No 
 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
 
Document Period End Date
Dec. 31, 2017 
 
 
 
Document Fiscal Year Focus
2017 
 
 
 
Document Fiscal Period Focus
Q4 
 
 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Assets:
 
 
Loans receivable (net of allowance for loan losses of $54,590 and $51,842, respectively)
$ 21,814,507 
$ 24,903,724 
Cash and cash equivalents:
 
 
Cash and cash equivalents - not held at a related party
6,982 
7,841 
Cash and cash equivalents - held at a related party
59,770 
61,813 
Total cash and cash equivalents
66,752 
69,654 
Investments and notes receivable
240,538 
254,144 
Restricted cash
688,193 
980,961 
Restricted cash - due to customers
187,121 
119,702 
Loan accrued interest receivable
430,385 
391,264 
Accounts receivable (net of allowance for doubtful accounts of $1,436 and $1,549, respectively)
54,410 
43,972 
Goodwill
138,759 
147,312 
Intangible assets, net
38,427 
47,813 
Property and equipment, net
248,051 
123,786 
Other assets
56,474 
23,232 
Fair value of derivative instruments
818 
87,531 
Total assets
23,964,435 
27,193,095 
Liabilities:
 
 
Bonds and notes payable
21,356,573 
24,668,490 
Accrued interest payable
50,039 
45,677 
Other liabilities
198,252 
210,475 
Due to customers
187,121 
119,702 
Fair value of derivative instruments
7,063 
77,826 
Total liabilities
21,799,048 
25,122,170 
Commitments and contingencies
   
   
Nelnet, Inc. shareholders' equity:
 
 
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no shares issued or outstanding
0 
0 
Common stock:
 
 
Additional paid-in capital
521 
420 
Retained earnings
2,143,983 
2,056,084 
Accumulated other comprehensive earnings
4,617 
4,730 
Total Nelnet, Inc. shareholders' equity
2,149,529 
2,061,655 
Noncontrolling interests
15,858 
9,270 
Total equity
2,165,387 
2,070,925 
Total liabilities and equity
23,964,435 
27,193,095 
Common Class A [Member]
 
 
Common stock:
 
 
Common stock
293 
306 
Common Class B [Member]
 
 
Common stock:
 
 
Common stock
115 
115 
Variable Interest Entity, Primary Beneficiary [Member]
 
 
Assets:
 
 
Loans receivable (net of allowance for loan losses of $54,590 and $51,842, respectively)
21,909,476 
25,090,530 
Cash and cash equivalents:
 
 
Restricted cash
641,994 
970,306 
Other assets
431,934 
390,504 
Liabilities:
 
 
Bonds and notes payable
21,702,298 
25,105,704 
Other liabilities
168,637 
290,996 
Fair value of derivative instruments
0 
66,453 
Common stock:
 
 
Net assets of consolidated education lending variable interest entities
$ 1,112,469 
$ 988,187 
Consolidated Balance Sheets (Parentheticals) (USD $)
In Thousands, except Share data, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Allowance for loan losses
$ 54,590 
$ 51,842 
Allowance for doubtful accounts
$ 1,436 
$ 1,549 
Preferred stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, authorized shares (in shares)
50,000,000 
50,000,000 
Preferred stock, issued shares (in shares)
0 
0 
Preferred stock, outstanding shares (in shares)
0 
0 
Common Class A [Member]
 
 
Par value (in dollars per share)
$ 0.01 
$ 0.01 
Shares authorized (in shares)
600,000,000 
600,000,000 
Shares issued (in shares)
29,341,517 
30,628,112 
Shares outstanding (in shares)
29,341,517 
30,628,112 
Common Class B [Member]
 
 
Par value (in dollars per share)
$ 0.01 
$ 0.01 
Shares authorized (in shares)
60,000,000 
60,000,000 
Shares issued (in shares)
11,468,587 
11,476,932 
Shares outstanding (in shares)
11,468,587 
11,476,932 
Consolidated Statements of Income (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Interest income:
 
 
 
Loan interest
$ 757,731 
$ 751,280 
$ 726,258 
Investment interest
12,695 
9,466 
7,851 
Total interest income
770,426 
760,746 
734,109 
Interest expense:
 
 
 
Interest on bonds and notes payable
465,188 
388,183 
302,210 
Net interest income
305,238 
372,563 
431,899 
Less provision for loan losses
14,450 
13,500 
10,150 
Net interest income after provision for loan losses
290,788 
359,063 
421,749 
Other income:
 
 
 
Loan systems and servicing revenue
223,000 
214,846 
239,858 
Tuition payment processing, school information, and campus commerce revenue
145,751 
132,730 
120,365 
Communications revenue
25,700 
17,659 
0 
Enrollment services revenue
0 
4,326 
51,073 
Other income
52,826 
53,929 
47,262 
Gain on sale of loans and debt repurchases, net
2,902 
7,981 
5,153 
Derivative market value and foreign currency transaction adjustments and derivative settlements, net
(18,554)
49,795 
4,401 
Total other income
431,625 
481,266 
468,112 
Operating expenses:
 
 
 
Salaries and benefits
301,885 
255,924 
247,914 
Depreciation and amortization
39,541 
33,933 
26,343 
Loan servicing fees
22,734 
25,750 
30,213 
Cost to provide communications services
9,950 
6,866 
0 
Cost to provide enrollment services
0 
3,623 
41,733 
Other expenses
121,619 
115,419 
123,014 
Total operating expenses
495,729 
441,515 
469,217 
Income before income taxes
226,684 
398,814 
420,644 
Income tax expense
64,863 
141,313 
152,380 
Net income
161,821 
257,501 
268,264 
Net loss (income) attributable to noncontrolling interests
11,345 
(750)
(285)
Net income attributable to Nelnet, Inc.
$ 173,166 
$ 256,751 
$ 267,979 
Earnings per common share:
 
 
 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted (in dollars per share)
$ 4.14 
$ 6.02 
$ 5.89 
Weighted average common shares outstanding - basic and diluted (in shares)
41,791,941 
42,669,070 
45,529,340 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net income
$ 45,714 
$ 43,535 
$ 24,651 
$ 47,920 
$ 98,931 
$ 84,363 
$ 26,178 
$ 48,029 
$ 161,821 
$ 257,501 
$ 268,264 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized holding gains (losses) arising during period, net
 
 
 
 
 
 
 
 
2,349 
5,789 
(1,570)
Reclassification adjustment for gains recognized in net income, net of losses
 
 
 
 
 
 
 
 
(2,528)
(1,907)
(2,955)
Income tax effect
 
 
 
 
 
 
 
 
66 
(1,436)
1,674 
Total other comprehensive (loss) income
 
 
 
 
 
 
 
 
(113)
2,446 
(2,851)
Comprehensive income
 
 
 
 
 
 
 
 
161,708 
259,947 
265,413 
Comprehensive loss (income) attributable to noncontrolling interests
 
 
 
 
 
 
 
 
11,345 
(750)
(285)
Comprehensive income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
$ 173,053 
$ 259,197 
$ 265,128 
Consolidated Statements of Shareholders' Equity (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Preferred Stock [Member]
Common Stock [Member]
Common Class A [Member]
Common Stock [Member]
Common Class B [Member]
Additional paid-in capital [Member]
Retained earnings [Member]
Accumulated other comprehensive earnings [Member]
Noncontrolling interest [Member]
Beginning balance at Dec. 31, 2014
$ 1,725,678 
$ 0 
$ 348 
$ 115 
$ 17,290 
$ 1,702,560 
$ 5,135 
$ 230 
Beginning balance (in shares) at Dec. 31, 2014
 
0 
34,756,384 
11,486,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interests
7,443 
 
 
 
 
 
 
7,443 
Net income
268,264 
 
 
 
 
267,979 
 
285 
Other comprehensive income (loss)
(2,851)
 
 
 
 
 
(2,851)
 
Distribution to noncontrolling interests
(232)
 
 
 
 
 
 
(232)
Cash dividends on Class A and Class B common stock
(19,025)
 
 
 
 
(19,025)
 
 
Issuance of common stock, net of forfeitures (in shares)
 
 
159,303 
 
 
 
 
 
Issuance of common stock, net of forfeitures
3,862 
 
2 
 
3,860 
 
 
 
Compensation expense for stock based awards
5,188 
 
 
 
5,188 
 
 
 
Repurchase of common stock (in shares)
 
 
(2,449,159)
 
 
 
 
 
Repurchase of common stock
(96,169)
 
(25)
 
(26,338)
(69,806)
 
 
Conversion of of common stock (in shares)
 
 
10,000 
(10,000)
 
 
 
 
Ending balance at Dec. 31, 2015
1,892,158 
0 
325 
115 
0 
1,881,708 
2,284 
7,726 
Ending balance (in shares) at Dec. 31, 2015
 
0 
32,476,528 
11,476,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interests
1,366 
 
 
 
 
 
 
1,366 
Net income
257,501 
 
 
 
 
256,751 
 
750 
Other comprehensive income (loss)
2,446 
 
 
 
 
 
2,446 
 
Distribution to noncontrolling interests
(572)
 
 
 
 
 
 
(572)
Cash dividends on Class A and Class B common stock
(21,188)
 
 
 
 
(21,188)
 
 
Issuance of common stock, net of forfeitures (in shares)
 
 
189,952 
 
 
 
 
 
Issuance of common stock, net of forfeitures
4,219 
 
1 
 
4,218 
 
 
 
Compensation expense for stock based awards
4,086 
 
 
 
4,086 
 
 
 
Repurchase of common stock (in shares)
 
 
(2,038,368)
 
 
 
 
 
Repurchase of common stock
(69,091)
 
(20)
 
(7,884)
(61,187)
 
 
Ending balance at Dec. 31, 2016
2,070,925 
0 
306 
115 
420 
2,056,084 
4,730 
9,270 
Ending balance (in shares) at Dec. 31, 2016
 
0 
30,628,112 
11,476,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interests
19,578 
 
 
 
 
 
 
19,578 
Net income
161,821 
 
 
 
 
173,166 
 
(11,345)
Other comprehensive income (loss)
(113)
 
 
 
 
 
(113)
 
Distribution to noncontrolling interests
(1,645)
 
 
 
 
 
 
(1,645)
Cash dividends on Class A and Class B common stock
(24,097)
 
 
 
 
(24,097)
 
 
Issuance of common stock, net of forfeitures (in shares)
 
 
178,114 
 
 
 
 
 
Issuance of common stock, net of forfeitures
3,621 
 
2 
 
3,619 
 
 
 
Compensation expense for stock based awards
4,193 
 
 
 
4,193 
 
 
 
Repurchase of common stock (in shares)
 
 
(1,473,054)
 
 
 
 
 
Repurchase of common stock
(68,896)
 
(15)
 
(7,711)
(61,170)
 
 
Conversion of of common stock (in shares)
 
 
8,345 
(8,345)
 
 
 
 
Ending balance at Dec. 31, 2017
$ 2,165,387 
$ 0 
$ 293 
$ 115 
$ 521 
$ 2,143,983 
$ 4,617 
$ 15,858 
Ending balance (in shares) at Dec. 31, 2017
 
0 
29,341,517 
11,468,587 
 
 
 
 
Consolidated Statements of Shareholders' Equity (Parentheticals)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Common Class B [Member]
 
 
 
Cash dividend on Class A and Class B common stock - per share
$ 0.58 
$ 0.50 
$ 0.42 
Common Class A [Member]
 
 
 
Cash dividend on Class A and Class B common stock - per share
$ 0.58 
$ 0.50 
$ 0.42 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Statement of Cash Flows [Abstract]
 
 
 
Net income attributable to Nelnet, Inc.
$ 173,166 
$ 256,751 
$ 267,979 
Net (loss) income attributable to noncontrolling interests
11,345 
(750)
(285)
Net income
161,821 
257,501 
268,264 
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisitions:
 
 
 
Depreciation and amortization, including debt discounts and loan premiums and deferred origination costs
137,823 
122,547 
123,736 
Loan discount accretion
(44,812)
(40,617)
(43,766)
Provision for loan losses
14,450 
13,500 
10,150 
Derivative market value adjustment
(26,379)
(59,895)
15,150 
Unrealized foreign currency transaction adjustment
45,600 
(11,849)
(43,801)
(Payments) proceeds from termination of derivative instruments, net
(30,382)
3,999 
65,527 
Payments to enter into derivative instruments
(929)
0 
(2,936)
Proceeds from clearinghouse to settle variation margin, net
48,985 
0 
0 
Gain on sale of loans, net
0 
0 
(351)
Gain from debt repurchases, net
(2,902)
(7,981)
(4,802)
Gain from sales of available-for-sale securities, net of losses
(2,528)
(1,907)
(2,955)
Deferred income tax (benefit) expense
(1,544)
27,005 
7,049 
Non-cash compensation expense
4,416 
4,348 
5,347 
Impairment expense
3,626 
0 
0 
Other
3,948 
4,215 
755 
Increase in loan accrued interest receivable
(39,203)
(7,439)
(3,819)
(Increase) decrease in accounts receivable
(12,046)
7,454 
1,061 
(Increase) decrease in other assets
(34,457)
(2,203)
375 
Increase in accrued interest payable
4,362 
14,170 
5,117 
(Decrease) increase in other liabilities
(2,341)
2,409 
(8,736)
Net cash provided by operating activities
227,508 
325,257 
391,365 
Cash flows from investing activities, net of acquisitions:
 
 
 
Purchases of loans
(325,476)
(349,144)
(2,189,450)
Net proceeds from loan repayments, claims, capitalized interest, and other
3,363,526 
3,735,772 
3,668,302 
Proceeds from sale of loans
53,203 
44,760 
3,996 
Purchases of available-for-sale securities
(128,523)
(94,673)
(100,476)
Proceeds from sales of available-for-sale securities
156,540 
144,252 
95,758 
Purchases of investments and issuance of notes receivable
(29,339)
(22,361)
(93,948)
Proceeds from investments and notes receivable
11,545 
15,898 
29,799 
Purchases of property and equipment
(156,005)
(67,602)
(16,761)
Decrease (increase) in restricted cash, net
320,108 
(147,487)
67,108 
Business and asset acquisitions, net of cash acquired
0 
0 
(46,966)
Proceeds from sale of business, net
4,511 
0 
0 
Net cash provided by investing activities
3,270,090 
3,259,415 
1,417,362 
Cash flows from financing activities, net of borrowings assumed:
 
 
 
Payments on bonds and notes payable
(5,403,224)
(4,134,890)
(4,368,180)
Proceeds from issuance of bonds and notes payable
1,984,558 
650,909 
2,614,595 
Payments of debt issuance costs
(6,497)
(5,845)
(11,162)
Payment of contingent consideration
(850)
0 
0 
Dividends paid
(24,097)
(21,188)
(19,025)
Repurchases of common stock
(68,896)
(69,091)
(96,169)
Proceeds from issuance of common stock
678 
889 
801 
Issuance of noncontrolling interests
19,473 
1,241 
3,693 
Distribution to noncontrolling interests
(1,645)
(572)
(232)
Net cash used in financing activities
(3,500,500)
(3,578,547)
(1,875,679)
Net (decrease) increase in cash and cash equivalents
(2,902)
6,125 
(66,952)
Cash and cash equivalents, beginning of year
69,654 
63,529 
130,481 
Cash and cash equivalents, end of year
66,752 
69,654 
63,529 
Cash disbursements made for:
 
 
 
Interest
390,278 
301,118 
228,248 
Income taxes, net of refunds
96,721 
115,415 
147,235 
Noncash investing and financing activities:
 
 
 
Loans and other assets acquired
0 
0 
2,025,453 
Borrowings and other liabilities assumed in acquisition of loans
0 
0 
1,885,453 
Issuance of noncontrolling interest
$ 0 
$ 20 
$ 3,750 
Description of Business
Description of Business
Description of Business

Nelnet, Inc. and its subsidiaries (“Nelnet” or the “Company”) is a diverse company with a focus on delivering education-related products and services and loan asset management. The largest operating businesses engage in loan servicing, tuition payment processing and school information systems, and communications. A significant portion of the Company's revenue is net interest income earned on a portfolio of federally insured student loans. The Company also makes investments to further diversify the Company both within and outside of its historical core education-related businesses, including, but not limited to, investments in real estate and start-up ventures. Substantially all revenue from external customers is earned, and all long-lived assets are located, in the United States.

The Company was formed as a Nebraska corporation in 1978 to service federal student loans for two local banks. The Company built on this initial foundation as a servicer to become a leading originator, holder, and servicer of federal student loans, principally consisting of loans originated under the Federal Family Education Loan Program (“FFELP” or “FFEL Program”) of the U.S. Department of Education (the “Department”).

The Health Care and Education Reconciliation Act of 2010 (the "Reconciliation Act of 2010”) discontinued new loan originations under the FFEL Program, effective July 1, 2010, and requires that all new federal student loan originations be made directly by the Department through the Federal Direct Loan Program. This law does not alter or affect the terms and conditions of existing FFELP loans. As a result of this law, the Company no longer originates new FFELP loans. To reduce its reliance on interest income on student loans, the Company has expanded its services and products. This expansion has been accomplished through internal growth and innovation as well as business acquisitions.

The Company has four reportable operating segments. The Company's reportable operating segments include:

• Loan Systems and Servicing
• Tuition Payment Processing and Campus Commerce
• Communications
• Asset Generation and Management

A description of each reportable operating segment is included below. See note 15 for additional information on the Company's segment reporting.
Loan Systems and Servicing

The primary service offerings of the Loan Systems and Servicing operating segment include:

•
Servicing federally-owned student loans for the Department of Education
•
Servicing FFELP loans
•
Originating and servicing private education and consumer loans
•
Providing student loan servicing software and other information technology products and services
•
Providing outsourced services including call center, processing, and marketing services

In addition, this segment provided servicing and outsourcing services for FFELP guaranty agencies, including FFELP guaranty collection services, through June 30, 2016.

The Loan Systems and Servicing operating segment provides for the servicing of the Company's student loan portfolio and the portfolios of third parties. The loan servicing activities include loan conversion activities, application processing, borrower updates, customer service, payment processing, due diligence procedures, funds management reconciliations, and claim processing. These activities are performed internally for the Company's portfolio in addition to generating external fee revenue when performed for third-party clients.

The Company is one of four private sector companies (referred to as Title IV Additional Servicers, or "TIVAS") awarded a student loan servicing contract by the Department to provide additional servicing capacity for loans owned by the Department.

This operating segment also provides student loan servicing software, which is used internally by the Company and licensed to third-party student loan holders and servicers. These software systems have been adapted so that they can be offered as hosted servicing software solutions usable by third parties to service various types of student loans, including Federal Direct Loan Program and FFEL Program loans.

This segment also provides business process outsourcing specializing in contact center management. The contact center solutions and services include taking inbound calls, helping with outreach campaigns and sales, and interacting with customers through multi-channels.

In addition, this operating segment provided servicing activities for guaranty agencies, which serve as intermediaries between the Department and FFELP lenders, and are responsible for paying the claims made on defaulted loans. The services provided by the Company included providing software and data center services, borrower and loan updates, default aversion tracking services, claim processing services, and post-default collection services. The Company's guaranty servicing and collection revenue was earned from two guaranty servicing clients. A contract with one client expired on October 31, 2015, and was not renewed. The remaining guaranty servicing client exited the FFELP guaranty business at the end of their contract term on June 30, 2016, and after this date the Company has no remaining guaranty servicing and collection revenue.

Tuition Payment Processing and Campus Commerce

The Company's Tuition Payment Processing and Campus Commerce operating segment provides products and services to help students and families manage the payment of education costs at all levels (K-12 and higher education). In addition, this operating segment provides K-12 private and faith-based schools (i) school information system software that help schools automate administrative processes such as admissions, scheduling, student billing, attendance, and grade book management and (ii) professional development and educational instruction services. This segment also provides innovative education-focused technologies, services, and support solutions to help schools with the everyday challenges of collecting and processing commerce data.

In the K-12 market, the Company offers actively managed tuition payment plans and billing services, school information system and learning management software, professional development and educational instruction services, and assistance with financial needs assessment and donor management. In the higher education market, the Company primarily offers actively managed tuition payment plans and campus commerce technologies and payment processing.

Outside of the education market, the Company also offers payment services including electronic transfer and credit card processing, reporting, billing and invoicing, mobile and virtual terminal solutions, and specialized integrations to business software.

Communications

On December 31, 2015, the Company purchased the majority of the ownership interests of ALLO Communications LLC (“ALLO”).  ALLO provides pure fiber optic service to homes and businesses for internet, broadband, television, and telephone services.  The acquisition of ALLO provides additional diversification of the Company's revenues and cash flows outside of education.  In addition, the acquisition leverages the Company's existing infrastructure, customer service capabilities and call centers, and financial strength and liquidity for continued growth.  For financial reporting purposes, the Company provides the operating results of ALLO as a separate reportable operating segment.  The ALLO assets acquired and liabilities assumed were recorded by the Company at their respective estimated fair values at the date of acquisition.  As such, ALLO’s assets and liabilities as of December 31, 2015 are included in the Company’s consolidated balance sheet.  However, ALLO had no impact on the consolidated statement of income for 2015.  Beginning January 1, 2016, the Company began to reflect the operations of ALLO in the consolidated statements of income. 

ALLO derives its revenue primarily from the sale of communication services to residential and business customers in Nebraska. Internet, broadband, and television services include revenue from residential and business customers for subscriptions to ALLO's video and data products.  ALLO data services provide high-speed internet access over ALLO's all-fiber network at various symmetrical speeds of up to 1 gigabit per second for residential customers and is capable of providing symmetrical speeds of over 1 gigabit per second for business customers. Local calling services include fiber telephone service and other basic services.  Long-distance services include traditional domestic and international long distance which enables customers to make calls that terminate outside their local calling area. 

Asset Generation and Management

The Company's Asset Generation and Management operating segment includes the acquisition, management, and ownership of the Company's loan assets. Substantially all loan assets included in this segment are student loans originated under the FFEL Program, including the Stafford Loan Program, the PLUS Loan program, and loans that reflect the consolidation into a single loan of certain previously separate borrower obligations (“Consolidation” loans). The Company also acquires private education and consumer loans. The Company generates a substantial portion of its earnings from the spread, referred to as the Company's loan spread, between the yield it receives on its loan portfolio and the associated costs to finance such portfolio. The student loan assets are held in a series of education lending subsidiaries and associated securitization trusts designed specifically for this purpose. In addition to the loan spread earned on its portfolio, all costs and activity associated with managing the portfolio, such as servicing of the assets and debt maintenance, are included in this segment.

Corporate and Other Activities

Other business activities and operating segments that are not reportable are combined and included in Corporate and Other Activities. Corporate and Other Activities include the following items:

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

Corporate and Other Activities also include certain corporate activities and overhead functions related to executive management, human resources, accounting, legal, enterprise risk management, information technology, occupancy, and marketing. These costs are allocated to each operating segment based on estimated use of such activities and services.
Recent Developments
Recent Developments
Recent Developments

On February 7, 2018, the Company acquired 100 percent of the outstanding stock of Great Lakes Educational Loan Services, Inc. (“Great Lakes”) for a purchase price of $150.0 million in cash. The Company and Great Lakes are two of the four large private sector companies, or TIVAS, that have student loan servicing contracts with the Department of Education to provide servicing for loans owned by the Department. The operating results of Great Lakes will be included in the Company's Loan Systems and Servicing operating segment beginning February 7, 2018.
Summary of Significant Accounting Policies and Practices
Summary of Significant Accounting Policies and Practices
Summary of Significant Accounting Policies and Practices

Consolidation

The consolidated financial statements include the accounts of Nelnet, Inc. and its consolidated subsidiaries. In addition, the accounts of all variable interest entities (“VIEs”) of which the Company has determined that it is the primary beneficiary are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.
Variable Interest Entities

The following entities are VIEs of which the Company has determined that it is the primary beneficiary. The primary beneficiary is the entity which has both: (1) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance, and (2) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.
The Company's education lending subsidiaries are engaged in the securitization of education finance assets. These education lending subsidiaries hold beneficial interests in eligible loans, subject to creditors with specific interests. The liabilities of the Company's education lending subsidiaries are not the direct obligations of Nelnet, Inc. or any of its other subsidiaries. Each education lending subsidiary is structured to be bankruptcy remote, meaning that it should not be consolidated in the event of bankruptcy of the parent company or any other subsidiary. The Company is generally the administrator and master servicer of the securitized assets held in its education lending subsidiaries and owns the residual interest of the securitization trusts. As a result, for accounting purposes, the transfers of student loans to the securitization trusts do not qualify as sales. Accordingly, all the financial activities and related assets and liabilities, including debt, of the securitizations are reflected in the Company's consolidated financial statements and are summarized as supplemental information on the balance sheet.
The Company owns 91.5 percent of the economic rights of ALLO Communications LLC and has a disproportional 80 percent of the voting rights related to all operating decisions for ALLO's business. See note 1, “Description of Business,” for a description of ALLO, including the primary services offered. ALLO's management, as current minority members, has the opportunity to earn an additional 11.5 percent of the total ownership interests based on the financial performance of ALLO. In addition to the Company’s equity investment, Nelnet, Inc. (the parent) has issued a $270.0 million line of credit to ALLO. As of December 31, 2017 and 2016, the outstanding balance, including accrued interest, on the line of credit was $193.1 million and $58.0 million, respectively. Nelnet, Inc.’s maximum exposure to loss as a result of its involvement with ALLO is equal to its equity investment and the outstanding balance and accrued interest on the line of credit. The amounts owed by ALLO to Nelnet, Inc., including the interest costs incurred by ALLO and interest earnings recognized by Nelnet, Inc., are not reflected in the Company’s consolidated balance sheet as they were eliminated in consolidation. All of ALLO’s financial activities and related assets and liabilities, excluding the line of credit, are reflected in the Company’s consolidated financial statements. See note 15, “Segment Reporting,” for disclosure of ALLO’s total assets and results of operations (included in the "Communications" operating segment), note 10, "Goodwill," for disclosure of ALLO's goodwill, and note 11, “Property and Equipment,” for disclosure of ALLO’s fixed assets. ALLO's goodwill and property and equipment comprise the majority of its assets. The assets recognized as a result of consolidating ALLO are the property of ALLO and are not available for any other purpose, other than to Nelnet, Inc. as a secured lender under ALLO's line of credit.
Noncontrolling Interests

Amounts for noncontrolling interests reflect the proportionate share of membership interest (equity) and net income attributable to the holders of minority membership interests in the following entities:
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Whitetail Rock Capital Management, LLC - WRCM is the Company’s SEC-registered investment advisor subsidiary.  WRCM issued 10 percent minority membership interests on January 1, 2012.

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ALLO Communications LLC - On December 31, 2015, the Company purchased 92.5 percent of the ownership interests of ALLO. On January 1, 2016, the Company sold a 1.0 percent ownership interest in ALLO to a non-related third-party. The remaining 7.5 percent of the ownership interests of ALLO is owned by ALLO management, who has the opportunity to earn an additional 11.5 percent (up to 19 percent) of the total ownership interests based on the financial performance of ALLO.

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401 Building, LLC (“401 Building”) - 401 Building is an entity established on October 19, 2015 for the sole purpose of acquiring, developing, and operating a commercial building. The Company owns 50 percent of 401 Building.

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TDP Phase Three, LLC (“TDP”) and TDP Phase Three-NMTC ("TDP-NMTC") - TDP and TDP-NMTC are entities that were established in October 2015 for the sole purpose of developing and operating the new headquarters of Hudl. The Company owns 25 percent of each TDP and TDP-NMTC.

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330-333 Building, LLC ("330-333 Building") - 330-333 Building is an entity established on January 14, 2016 for the sole purpose of acquiring, developing, and operating a commercial building. The Company owns 50 percent of 330-333 Building.

The Company is a tenant in the 401 Building, the headquarters of Hudl, and the 330-333 Building. Because the Company, as lessee, was involved in the asset construction, 401 Building, TDP, TDP-NMTC, and 330-333 Building are included in the Company's consolidated financial statements.

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GreatNet Solutions, LLC ("GreatNet") - GreatNet is a joint venture created to respond to an initiative by the Department for the procurement of a contract for federal student loan servicing.  As of December 31, 2017, Nelnet Servicing, LLC ("Nelnet Servicing"), a subsidiary of the Company, and Great Lakes each owned 50 percent of the ownership interests in GreatNet.  For financial reporting purposes, the balance sheet and operating results of GreatNet are included in the Company's consolidated financial statements and presented in the Company's Loan Systems and Servicing operating segment.  On February 7, 2018, the Company purchased 100 percent of the outstanding stock of Great Lakes.  See note 2, “Recent Developments” for additional information on this business acquisition.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities, reported amounts of revenues and expenses, and other disclosures. Actual results may differ from those estimates.

Loans Receivable

Loans consist of federally insured student loans, private education loans, and consumer loans. If the Company has the ability and intent to hold loans for the foreseeable future, such loans are held for investment and carried at amortized cost. Amortized cost includes the unamortized premium or discount and capitalized origination costs and fees, all of which are amortized to interest income. Loans which are held-for-investment also have an allowance for loan loss as needed. Any loans the Company has the ability and intent to sell are classified as held for sale and are carried at the lower of cost or fair value. Loans which are held for sale do not have the associated premium or discount and origination costs and fees amortized into interest income and there is also no related allowance for loan losses. There were no loans classified as held for sale as of December 31, 2017 and 2016.

Federally insured loans were originated under the FFEL Program by certain eligible lenders as defined by the Higher Education Act of 1965, as amended (the “Higher Education Act”). These loans, including related accrued interest, are guaranteed at their maximum level permitted under the Higher Education Act by an authorized guaranty agency, which has a contract of reinsurance with the Department. The terms of the loans, which vary on an individual basis, generally provide for repayment in monthly installments of principal and interest. Generally, Stafford and PLUS loans have repayment periods between five and ten years. Consolidation loans have repayment periods of twelve to thirty years. FFELP loans do not require repayment while the borrower is in-school, and during the grace period immediately upon leaving school. The borrower may also be granted a deferment or forbearance for a period of time based on need, during which time the borrower is not considered to be in repayment. Interest continues to accrue on loans in the in-school, deferment, and forbearance program periods. In addition, eligible borrowers may qualify for income-driven repayment plans offered by the Department. These plans determine the borrower's payment amount based on their discretionary income and may extend their repayment period. Interest rates on federally insured student loans may be fixed or variable, dependent upon the type of loan, terms of the loan agreements, and date of origination.

Substantially all FFELP loan principal and related accrued interest is guaranteed as provided by the Higher Education Act. These guarantees are subject to the performance of certain loan servicing due diligence procedures stipulated by applicable Department regulations. If these due diligence requirements are not met, affected student loans may not be covered by the guarantees in the event of borrower default. Such student loans are subject to “cure” procedures and reinstatement of the guarantee under certain circumstances.

Loans also include private education and consumer loans. Private education loans are loans to students or their families that are non-federal loans and loans not insured or guaranteed under the FFEL Program. These loans are used primarily to bridge the gap between the cost of higher education and the amount funded through financial aid, federal loans, or borrowers' personal resources. The terms of the private education loans, which vary on an individual basis, generally provide for repayment in monthly installments of principal and interest over a period of up to 30 years. The private education loans are not covered by a guarantee or collateral in the event of borrower default. Consumer loans are unsecured loans to an individual for personal, family, or household purposes. The terms of the consumer loans, which vary on an individual basis, generally provide for repayment in weekly or monthly installments of principal and interest over a period of up to 6 years.

Allowance for Loan Losses

The allowance for loan losses represents management's estimate of probable losses on loans. The provision for loan losses reflects the activity for the applicable period and provides an allowance at a level that the Company's management believes is appropriate to cover probable losses inherent in the loan portfolio. The Company evaluates the adequacy of the allowance for loan losses on its federally insured loan portfolio separately from its private education and consumer loan portfolios. These evaluation processes are subject to numerous judgments and uncertainties.

The allowance for the federally insured loan portfolio is based on periodic evaluations of the Company's loan portfolios considering loans in repayment versus those in a nonpaying status, delinquency status, trends in defaults in the portfolio based on Company and industry data, past experience, trends in student loan claims rejected for payment by guarantors, changes to federal student loan programs, current economic conditions, and other relevant factors. The federal government guarantees 97 percent of the principal of and the interest on federally insured student loans disbursed on and after July 1, 2006 (and 98 percent for those loans disbursed on and after October 1, 1993 and prior to July 1, 2006), which limits the Company's loss exposure on the outstanding balance of the Company's federally insured portfolio. Student loans disbursed prior to October 1, 1993 are fully insured.

In determining the appropriate allowance for loan losses on the private education and consumer loans, the Company considers several factors, including: loans in repayment versus those in a nonpaying status, delinquency status, type of program, trends in defaults in the portfolio based on Company and industry data, past experience, current economic conditions, and other relevant factors. The Company places private education and consumer loans on nonaccrual status when the collection of principal and interest is 90 days past due, and charges off the loan when the collection of principal and interest is 120 days past due. Collections, if any, are reflected as a recovery through the allowance for loan losses.

Management has determined that each of the federally insured loan portfolio, private education loan portfolio, and consumer loan portfolio meets the definition of a portfolio segment, which is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses.  Accordingly, the portfolio segment disclosures are presented on this basis in note 4 for each of these portfolios.  The Company does not disaggregate its portfolio segment loan portfolios into classes of financing receivables. The Company collectively evaluates loans for impairment and as of December 31, 2017 and 2016, the Company did not have any impaired loans as defined in the Receivables Topic of the FASB Accounting Standards Codification.

For loans purchased where there is evidence of credit deterioration since the origination of the loan, the Company records a credit discount, separate from the allowance for loan losses, which is non-accretable to interest income. Remaining discounts and premiums for purchased loans are recognized in interest income over the remaining estimated lives of the loans. The Company continues to evaluate credit losses associated with purchased loans based on current information and changes in expectations to determine the need for any additional allowance for loan losses.

Cash and Cash Equivalents and Statement of Cash Flows

For purposes of the consolidated statements of cash flows, the Company considers all investments with original maturities of three months or less to be cash equivalents.

Accrued interest on loans purchased and sold is included in cash flows from operating activities in the respective period. Net purchased loan accrued interest was $71.4 million in 2015. Net purchased loan accrued interest in 2017 and 2016 was insignificant.

Investments

The Company's available-for-sale investment portfolio consists of student loan and other asset-backed securities and equity and debt securities. These securities are carried at fair value, with the temporary changes in fair value, net of taxes, carried as a separate component of shareholders’ equity. The amortized cost of debt securities in this category (including the student loan and other asset-backed securities) is adjusted for amortization of premiums and accretion of discounts, which are amortized using the effective interest rate method. Other-than-temporary impairment is evaluated by considering several factors, including the length of time and extent to which the fair value has been less than the amortized cost basis, the financial condition and near-term prospects of the issuer of the security (considering factors such as adverse conditions specific to the security and ratings agency actions), and the intent and ability of the Company to retain the investment to allow for any anticipated recovery in fair value. The entire fair value loss on a security that has experienced an other-than-temporary impairment is recorded in earnings if the Company intends to sell the security or if it is more likely than not that the Company will be required to sell the security before the expected recovery of the loss. However, if the impairment is other-than-temporary, and either of those two conditions does not exist, the portion of the impairment related to credit losses is recorded in earnings and the impairment related to other factors is recorded in other comprehensive income.

Securities classified as trading are accounted for at fair value, with unrealized gains and losses included in "other income" in the consolidated statements of income.

When an investment is sold, the cost basis is determined through specific identification of the security sold.

The Company accounts for investments in which it does not have significant influence or a controlling financial interest using the cost method of accounting.  Cost method investments are recorded at cost.  Cost method investments are evaluated for other-than-temporary impairment in the same manner as described above for available-for-sale investments.

The Company accounts for investments over which it has significant influence but not a controlling financial interest using the equity method of accounting.  Equity method investments are recorded at cost and subsequently increased or decreased by the amount of the Company’s proportionate share of the net earnings or losses and other comprehensive income of the investee.  Equity method investments are evaluated for other-than-temporary impairment using certain impairment indicators such as a series of operating losses of an investee or other factors.  These factors may indicate that a decrease in value of the investment has occurred that is other-than-temporary and shall be recognized.

Restricted Cash

Restricted cash primarily includes amounts for student loan securitizations and other secured borrowings. This cash must be used to make payments related to trust obligations. Amounts on deposit in these accounts are primarily the result of timing differences between when principal and interest is collected on the student loans held as trust assets and when principal and interest is paid on the trust's asset-backed debt securities. Restricted cash also includes collateral deposits with derivative counterparties and third-party clearinghouses.

Restricted Cash - Due to Customers

As a servicer of student loans, the Company collects student loan remittances and subsequently disburses these remittances to the appropriate lending entities. In addition, as part of the Company's Tuition Payment Processing and Campus Commerce operating segment, the Company collects tuition payments and subsequently remits these payments to the appropriate schools. Cash collected for customers and the related liability are included in the accompanying consolidated balance sheets.

Accounts Receivable

Accounts receivable are presented at their net realizable values, which include allowances for doubtful accounts. Allowance estimates are based upon individual customer experience, as well as the age of receivables and likelihood of collection.

Business Combinations

The Company uses the acquisition method in accounting for acquired businesses. Under the acquisition method, the financial statements reflect the operations of an acquired business starting from the completion of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. All contingent consideration is measured at fair value on the acquisition date and included in the consideration transferred in the acquisition. Contingent consideration classified as a liability is remeasured to fair value at each reporting date until the contingency is resolved, and changes in fair value are recognized in earnings.

Goodwill

The Company reviews goodwill for impairment annually (in the fourth quarter) and whenever triggering events or changes in circumstances indicate its carrying value may not be recoverable. Goodwill is tested for impairment using a fair value approach at the reporting unit level. A reporting unit is the operating segment, or a business one level below that operating segment if discrete financial information is prepared and regularly reviewed by segment management. However, components are aggregated as a single reporting unit if they have similar economic characteristics.
The Company tests goodwill for impairment in accordance with applicable accounting guidance. The guidance provides an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that the estimated fair value of a reporting unit is less than its carrying amount. If an entity elects to perform a qualitative assessment and determines that an impairment is more likely than not, the entity is then required to perform a quantitative impairment test (described below), otherwise no further analysis is required. An entity also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test.
If the Company elects to not perform a qualitative assessment or if the Company determines it is more likely than not that the fair value of a reporting unit is less than the carrying amount, then the Company performs a quantitative impairment test on goodwill. In the quantitative test, the Company compares the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is considered not impaired and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company would record an impairment loss equal to the difference.
Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and determination of appropriate market comparables. Actual future results may differ from those estimates.
See note 10 for information regarding the Company's annual goodwill impairment review.
Intangible Assets

Intangible assets with finite lives are amortized over their estimated lives. Such assets are amortized using a method of amortization that reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up. If that pattern cannot be reliably determined, the Company uses a straight-line amortization method.

The Company evaluates the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization.

Property and Equipment

Property and equipment are carried at cost, net of accumulated depreciation. Maintenance and repairs are charged to expense as incurred, and major improvements, including leasehold improvements, are capitalized. Gains and losses from the sale of property and equipment are included in determining net income. The Company uses the straight-line method for recording depreciation and amortization. Leasehold improvements are amortized straight-line over the shorter of the lease term or estimated useful life of the asset.

Impairment of Long‑Lived Assets

The Company reviews its long-lived assets, such as property and equipment and purchased intangibles subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company uses estimates to determine the fair value of long-lived assets. Such estimates are generally based on estimated future cash flows or cost savings associated with particular assets and are discounted to present value using an appropriate discount rate. The estimates of future cash flows associated with assets are generally prepared using a cost savings method, a lost income method, or an excess return method, as appropriate. In utilizing such methods, management must make certain assumptions about the amount and timing of estimated future cash flows and other economic benefits from the assets, the remaining economic useful life of the assets, and general economic factors concerning the selection of an appropriate discount rate. The Company may also use replacement cost or market comparison approaches to estimating fair value if such methods are determined to be more appropriate.

Assumptions and estimates about future values and remaining useful lives of the Company's intangible and other long-lived assets are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in the Company's business strategy and internal forecasts. Although the Company believes the historical assumptions and estimates used are reasonable and appropriate, different assumptions and estimates could materially impact the reported financial results.

Fair Value Measurements

The Company uses estimates of fair value in applying various accounting standards for its financial statements.

Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company's policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value, such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates, and credit spreads, relying first on observable data from active markets. Depending on current market conditions, additional adjustments to fair value may be based on factors such as liquidity, credit, and bid/offer spreads. In some cases fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Transaction costs are not included in the determination of fair value. When possible, the Company seeks to validate the model's output to market transactions. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the estimates of current or future values.

The Company categorizes its fair value estimates based on a hierarchical framework associated with three levels of price transparency utilized in measuring assets and liabilities at fair value. Classification is based on the lowest level of input that is significant to the fair value of the instrument. The three levels include:

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Level 1: Quoted prices for identical instruments in active markets. The types of financial instruments included in Level 1 are highly liquid instruments with quoted prices.

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Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose primary value drivers are observable.

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Level 3: Instruments whose primary value drivers are unobservable. Inputs are developed based on the best information available; however, significant judgment is required by management in developing the inputs.

The Company's accounting policy is to recognize transfers between levels of the fair value hierarchy at the end of the reporting period.

Revenue Recognition

The Company recognizes revenue when (i) persuasive evidence of an arrangement exists between the Company and the customer, (ii) delivery of the product to the customer has occurred or service has been provided to the customer, (iii) the price to the customer is fixed or determinable, and (iv) collectability of the sales price is reasonably assured. Additional information related to the Company's revenue recognition of specific items is further provided below.

Loan interest income - Loan interest on federally insured student loans is paid by the Department or the borrower, depending on the status of the loan at the time of the accrual. In addition, the Department makes quarterly interest subsidy payments on certain qualified FFELP loans until the student is required under the provisions of the Higher Education Act to begin repayment. Borrower repayment of FFELP loans normally begins within six months after completion of the borrower's course of study, leaving school, or ceasing to carry at least one-half the normal full-time academic load, as determined by the educational institution. Borrower repayment of PLUS and Consolidation loans normally begins within 60 days from the date of loan disbursement. Borrower repayment of private education loans typically begins six months following the borrower's graduation from a qualified institution, and the interest is either paid by the borrower or capitalized annually or at repayment. Repayment of consumer loans typically starts upon origination of the loan.

The Department provides a special allowance to lenders participating in the FFEL Program. The special allowance is accrued based upon the fiscal quarter average rate of 13-week Treasury Bill auctions (for loans originated prior to January 1, 2000), the fiscal quarter average rate of the daily three-month financial commercial paper rates (for loans originated on and after January 1, 2000) or the fiscal quarter average rate of daily one-month LIBOR rates (for loans originated on and after January 1, 2000, and for lenders which elected to change the special allowance index to one-month LIBOR effective April 1, 2012) relative to the yield of the student loan.

The Company recognizes loan interest income as earned, net of amortization of loan premiums and deferred origination costs and the accretion of loan discounts. Loan interest income is recognized based upon the expected yield of the loan after giving effect to interest rate reductions resulting from borrower utilization of incentives such as timely payments ("borrower benefits") and other yield adjustments. Loan premiums or discounts, deferred origination costs, and borrower benefits are amortized/accreted over the estimated life of the loans, which includes an estimate of forecasted payments in excess of contractually required payments. The Company periodically evaluates the assumptions used to estimate the life of the loans and prepayment rates. In instances where there are changes to the assumptions, amortization/accretion is adjusted on a cumulative basis to reflect the change since the acquisition of the loan.
  
In the third quarter of 2016, the Company revised its policy to correct for an error in its method of applying the interest method used to amortize premiums and deferred origination costs and accrete discounts on its loan portfolio. Previously, the Company amortized premiums and deferred origination costs and accreted discounts by including in its prepayment assumption forecasted payments in excess of contractually required payments as well as forecasted defaults. The Company has determined that only payments in excess of contractually required payments (excluding forecasted defaults) should be included in the prepayment assumption. Under the Company's revised policy, as of September 30, 2016, the constant prepayment rate used by the Company to amortize/accrete loan premiums/discounts was decreased. The constant prepayment rates under the Company's revised policy are 5 percent for Stafford loans and 3 percent for Consolidation loans. The constant prepayment rates under the Company's prior policy in effect before this correction were 6 percent and 4 percent, respectively. During the third quarter of 2016, the Company recorded an adjustment to reflect the cumulative net impact on prior periods for the correction of this error that resulted in an $8.2 million reduction to the Company's net loan discount balance and a corresponding pre-tax increase to interest income. The Company concluded this error had an immaterial impact on 2016 results as well as the results for prior periods.
The Company also pays the Department an annual 105 basis point rebate fee on Consolidation loans. These rebate fees are netted against loan interest income.
Loan systems and servicing revenue – Loan systems and servicing revenue consists of the following items:

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Loan and guaranty servicing fees – Loan servicing fees are determined according to individual agreements with customers and are calculated based on the dollar value of loans, number of loans, or number of borrowers serviced for each customer. Guaranty servicing fees were generally calculated based on the number of loans serviced, volume of loans serviced, or amounts collected. Revenue is recognized over the period in which services are provided to customers, and when ultimate collection is assured.

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Software services revenue – Software services revenue is determined from individual agreements with customers and includes license and maintenance fees associated with student loan software products.  Computer and software consulting and remote hosting revenues are recognized over the period in which services are provided to customers.

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Outsourced services revenue - Outsourced services revenue is determined from individual agreements with customers and generally recognized over the period in which services are provided to customers.

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Guaranty collections revenue – Guaranty collections revenue was earned when collected. Collection costs paid to third parties associated with this revenue was expensed upon successful collection.

Tuition payment processing, school information, and campus commerce revenue - Tuition payment processing, school information, and campus commerce revenue includes actively managed tuition payment solutions, remote hosted school information systems and learning management software, professional development and educational instruction services, assistance with financial needs assessment and donor management, and payment processing services. Fees for these services are recognized over the period in which services are provided to customers. Cash received in advance of the delivery of services is included in deferred revenue.

Communications revenue - Communications revenue based on a flat fee, derived principally from internet, television, and telephone services are billed in advance and recognized in subsequent periods when the services are provided. Revenues for usage-based services, such as access charges billed to other telephone carriers for originating and terminating long-distance calls on the Company's network, are billed in arrears. The Company recognizes revenue from these services in the period the services are rendered rather than billed. Earned but unbilled usage-based services are recorded in accounts receivable.

Costs to provide communication services is primarily associated with television programming costs.  The Company has various contracts to obtain video programming from programming vendors whose compensation is typically based on a flat fee per customer. The cost of the right to exhibit network programming under such arrangements is recorded in the month the programming is available for exhibition.  Programming costs are paid each month based on calculations performed by the Company and are subject to periodic audits performed by the programmers.  Other costs included in costs to provide communication services include connectivity, franchise, and other regulatory costs directly related to providing internet and voice services.

Enrollment services revenue - Enrollment services revenue was derived from fees which were earned through the delivery of qualified inquiries or clicks. Delivery was deemed to have occurred at the time a qualified inquiry or click was delivered to the customer, provided that no significant obligations remained.

For a portion of this revenue, the Company had agreements with providers of online media or traffic ("inquiry generation vendors") used in the generation of inquiries or clicks. The Company received a fee from its customers and paid a fee to the inquiry generation vendors either on a cost per inquiry, cost per click, or cost per number of impressions basis. The Company was the primary obligor in the transaction. As a result, the fees paid by the Company's customers were recognized as revenue and the fees paid to its inquiry generation vendors are included in "cost to provide enrollment services" in the Company's consolidated statements of income.

On February 1, 2016, the Company sold 100 percent of the membership interests in Sparkroom LLC, which included the Company's inquiry management products and services. After this sale, the Company no longer earns enrollment services revenue.

Other income - Other income consists primarily of the following items:

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Realized and unrealized gains and losses on investments

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Borrower late fee income - Late fee income is earned by the education lending subsidiaries and is recognized when payments are collected from the borrower.

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Investment advisory income - Investment advisory services are provided by the Company through an SEC-registered investment advisor subsidiary under various arrangements. The Company earns annual fees based on the outstanding balance of investments and certain performance measures, which are recognized monthly as earned.

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Digital marketing and content solutions - The Company earned revenue related to digital marketing and content solution products and services under the brand name Peterson's. These products and services included test preparation study guides, school directories and databases, career exploration guides, on-line courses and test preparation, scholarship search and selection data, career planning information and guides, and on-line information about colleges and universities. Several content solutions services included services to connect students to colleges and universities, and were sold based on subscriptions. Revenue from sales of subscription services was recognized ratably over the term of the contract as it was earned. Subscription revenue received or receivable in advance of the delivery of services was included in deferred revenue. Revenue from the sale of print products was generally earned and recognized, net of estimated returns, upon shipment or delivery. All other digital marketing and content solutions revenue was recognized over the period in which services were provided to customers. On December 31, 2017, the Company sold Peterson's. See note 10 for additional information regarding this sale.

Interest Expense

Interest expense is based upon contractual interest rates, adjusted for the amortization of debt issuance costs and the accretion of discounts. The amortization of debt issuance costs and accretion of discounts are recognized using the effective interest method.

Transfer of Financial Assets and Extinguishments of Liabilities

The Company accounts for loan sales and debt repurchases in accordance with applicable accounting guidance. If a transfer of loans qualifies as a sale, the Company derecognizes the loan and recognizes a gain or loss as the difference between the carrying basis of the loan sold and the consideration received. The Company from time to time repurchases its outstanding debt and records a gain or loss on the early extinguishment of debt based upon the difference between the carrying amount of the debt and the amount paid to the third party. The Company recognizes the results of a transfer of loans and the extinguishment of debt based upon the settlement date of the transaction.

Derivative Accounting

Effective June 10, 2013, all over-the-counter derivative contracts executed by the Company are cleared post-execution at the Chicago Mercantile Exchange (“CME”), a regulated clearinghouse.  Clearing is a process by which a third-party, the clearinghouse, steps in between the original counterparties and guarantees the performance of both, by requiring that each post liquid collateral on an initial (initial margin) and mark-to-market (variation margin) basis to cover the clearinghouse’s potential future exposure in the event of default. 

Prior to January 3, 2017, the Company accounted for variation margin payments to the CME as collateral against its derivative position.  As such, these payments were treated as a separate unit of account from the derivative instrument and reported as a liability for cash collateral received and an asset (restricted cash) for cash collateral paid.  Effective January 3, 2017, the CME amended its rulebooks to legally characterize variation margin payments for over-the-counter derivatives they clear as settlements of the derivatives’ exposure rather than collateral against the exposure.  Based on these rulebook changes, for accounting and presentation purposes, the Company considers variation margin and the corresponding derivative instrument as a single unit of account.  As such, effective January 3, 2017, the variation margin received or paid is no longer accounted for separately as a liability or asset ("collateralized-to-market").  Instead, these payments are considered in determining the fair value of the centrally cleared derivative portfolio ("settled-to-market").  The principal difference for accounting and presentation purposes is that prior to January 3, 2017, the Company recorded the fair value of collateralized-to-market derivative contracts on its balance sheet as "fair value of derivative instruments" with an equal amount of variation margin collateral accounted for separately as an asset or liability. Subsequent to January 3, 2017, the Company records settled-to-market derivative contracts on its balance sheet with a fair value of zero and no collateral posted due to the payment or receipt of variation margin between the Company and the CME settling the outstanding mark-to-market exposure on such derivatives to a balance of zero on a daily basis, and records the underlying daily changes in the market value of such derivative contracts that result in such receipts or payments on its income statement as realized derivative market value adjustments in "Derivative market value and foreign currency transaction adjustments and derivative settlements, net."

The new clearinghouse requirements did not alter or affect the accounting and presentation of the Company’s derivative instruments executed prior to June 10, 2013 and those derivatives that are not required to be cleared at a clearinghouse (non-centrally cleared derivatives). The Company records these derivative instruments in the consolidated balance sheets on a gross basis as either an asset or liability measured at its fair value. Certain non-centrally cleared derivatives are subject to right of offset provisions with counterparties.  For these derivatives, the Company does not offset fair value amounts executed with the same counterparty under a master netting arrangement. In addition, the Company does not offset fair value amounts recognized for derivative instruments with respect to the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable).

The Company determines the fair value for its derivative instruments using either (i) pricing models that consider current market conditions and the contractual terms of the derivative instrument or (ii) counterparty valuations. The factors that impact the fair value of the Company's derivatives include interest rates, time value, forward interest rate curve, and volatility factors, as well as foreign exchange rates. Pricing models and their underlying assumptions impact the amount and timing of realized and unrealized gains and losses recognized, and the use of different pricing models or assumptions could produce different financial results. Management has structured all of the Company's derivative transactions with the intent that each is economically effective; however, the Company's derivative instruments do not qualify for hedge accounting. As a result, the change in fair value of derivative instruments is reported in current period earnings. Changes or shifts in the forward yield curve and fluctuations in currency rates can significantly impact the valuation of the Company’s derivatives, and therefore impact the financial position and results of operations of the Company. Any proceeds received or payments made by the Company to terminate a derivative in advance of its expiration date, or to amend the terms of an existing derivative, are included in the Company's consolidated statements of income and are accounted for as a change in fair value of such derivative. The changes in fair value of derivative instruments, as well as the settlement payments made on such derivatives, are included in “derivative market value and foreign currency adjustments and derivative settlements, net” on the consolidated statements of income.

Foreign Currency

During 2006, the Company issued Euro-denominated bonds, which were included in “bonds and notes payable” on the consolidated balance sheets. Transaction gains and losses resulting from exchange rate changes when re-measuring these bonds to U.S. dollars at the balance sheet date were included in “derivative market value and foreign currency adjustments and derivative settlements, net” on the consolidated statements of income. On October 25, 2017, the Company completed a remarketing of its Euro notes which reset the principal amount outstanding on the notes to U.S. dollars.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
 
Income tax expense includes deferred tax expense, which represents the net change in the deferred tax asset or liability balance during the year, plus any change made in the valuation allowance, and current tax expense, which represents the amount of tax currently payable to or receivable from a tax authority plus amounts for expected tax deficiencies.

Compensation Expense for Stock Based Awards

The Company has a restricted stock plan that is intended to provide incentives to attract, retain, and motivate employees in order to achieve long term growth and profitability objectives. The restricted stock plan provides for the grant to eligible employees of awards of restricted shares of Class A common stock. The fair value of restricted stock awards is determined on the grant date based on the Company's stock price and is amortized to compensation cost over the related vesting periods, which range up to ten years. For those awards with only service conditions that have graded vesting schedules, the Company recognizes compensation expense on a straight-line basis over the requisite service period for each separately vesting portion of the award, as if the award was, in substance, multiple awards. Holders of restricted stock are entitled to receive dividends from the date of grant whether or not vested.

The Company also has a directors stock compensation plan pursuant to which non-employee directors can elect to receive their annual retainer fees in the form of fully vested shares of Class A common stock, and also elect to defer receipt of such shares until the termination of their service on the board of directors. The fair value of grants under this plan is determined on the grant date based on the Company's stock price, and is expensed over the board member's annual service period.

Stock Repurchases

In accordance with the corporate laws of the state in which the Company is incorporated, all shares repurchased by the Company are legally retired upon acquisition by the Company.
Loans Receivable and Allowance for Loan Losses
Loans Receivable and Allowance for Loan Losses
Loans Receivable and Allowance for Loan Losses

Loans receivable consisted of the following:
 
As of December 31,
 
2017
 
2016
Federally insured student loans:
 
 
 
Stafford and other
$
4,418,881

 
5,186,047

Consolidation
17,302,725

 
19,643,937

Total
21,721,606

 
24,829,984

Private education loans
212,160

 
273,659

Consumer loans
62,111

 
—

 
21,995,877

 
25,103,643

Loan discount, net of unamortized loan premiums and deferred origination costs
(113,695
)
 
(129,507
)
Non-accretable discount (a)
(13,085
)
 
(18,570
)
Allowance for loan losses:
 
 
 
Federally insured loans
(38,706
)
 
(37,268
)
Private education loans
(12,629
)
 
(14,574
)
Consumer loans
(3,255
)
 
—

 
$
21,814,507

 
24,903,724


(a)
At December 31, 2017 and 2016, the non-accretable discount related to purchased loan portfolios of $5.8 billion and $8.3 billion, respectively.

Activity in the Allowance for Loan Losses

The provision for loan losses represents the periodic expense of maintaining an allowance sufficient to absorb losses, net of recoveries, inherent in the portfolio of student loans. Activity in the allowance for loan losses is shown below.
 
Year ended December 31,
 
2017
 
2016
 
2015
Balance at beginning of period
$
51,842

 
50,498

 
48,900

Provision for loan losses:
 
 
 
 
 
Federally insured loans
13,000

 
14,000

 
8,000

Private education loans
(2,000
)
 
(500
)
 
2,150

Consumer loans
3,450

 
—

 
—

Total provision for loan losses
14,450

 
13,500

 
10,150

Charge-offs:
 

 
 

 
 
Federally insured loans
(11,562
)
 
(12,292
)
 
(11,730
)
Private education loans
(1,313
)
 
(1,728
)
 
(2,414
)
Consumer loans
(195
)
 
—

 
—

Total charge-offs
(13,070
)
 
(14,020
)
 
(14,144
)
Recoveries - private education loans
768

 
954

 
1,050

Purchase (sale) of loans, net:
 
 
 
 
 
Federally insured loans
—

 
70

 
50

Private education loans
—

 
480

 
(140
)
Transfer from repurchase obligation related to private education loans repurchased, net (a)
600

 
360

 
4,632

Balance at end of period
$
54,590

 
51,842

 
50,498

 
 
 
 
 
 
Allocation of the allowance for loan losses:
 

 
 

 
 
Federally insured loans
$
38,706

 
37,268

 
35,490

Private education loans
12,629

 
14,574

 
15,008

Consumer loans
3,255

 
—

 
—

Total allowance for loan losses
$
54,590

 
51,842

 
50,498


(a) The Company sold various portfolios of private education loans to third-parties. Per the terms of the servicing agreements, the Company’s servicing operations were obligated to repurchase loans subject to the sale agreements in the event such loans became 60 or 90 days delinquent. As of December 31, 2016, the balance of loans subject to these repurchase obligations was $39.5 million. The Company's estimate related to its obligation to repurchase these loans is included in "other liabilities" in the Company's consolidated balance sheet and was $2.3 million as of December 31, 2016. On November 3, 2017, the loans subject to the repurchase obligations were sold by the owner of the loans to an unrelated third-party and the Company's repurchase obligation was terminated.

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 table below shows the Company’s loan delinquency amounts for federally insured and private education loans.
 
As of December 31,
 
2017
 
2016
 
2015
Federally insured loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment (a)
$
1,260,394

 
 
 
$
1,606,468

 
 
 
$
2,292,941

 
 
Loans in forbearance (b)
1,774,405

 
 
 
2,295,367

 
 
 
2,979,357

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
16,477,004

 
88.2
%
 
18,125,768

 
86.6
%
 
19,447,541

 
84.4
%
Loans delinquent 31-60 days (c)
682,586

 
3.7

 
818,976

 
3.9

 
1,028,396

 
4.5

Loans delinquent 61-90 days (c)
374,534

 
2.0

 
487,647

 
2.3

 
566,953

 
2.5

Loans delinquent 91-120 days (c)
287,922

 
1.5

 
335,291

 
1.6

 
415,747

 
1.8

Loans delinquent 121-270 days (c)
629,480

 
3.4

 
854,432

 
4.1

 
1,166,940

 
5.1

Loans delinquent 271 days or greater (c)(d)
235,281

 
1.2

 
306,035

 
1.5

 
390,232

 
1.7

Total loans in repayment
18,686,807

 
100.0
%
 
20,928,149

 
100.0
%
 
23,015,809

 
100.0
%
Total federally insured loans
$
21,721,606

 
 

 
$
24,829,984

 
 

 
$
28,288,107

 
 
Private education loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment (a)
$
6,053

 
 
 
$
35,146

 
 
 
$
30,795

 
 
Loans in forbearance (b)
2,237

 
 
 
3,448

 
 
 
350

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
196,720

 
96.5
%
 
228,612

 
97.2
%
 
228,464

 
96.7
%
Loans delinquent 31-60 days (c)
1,867

 
0.9

 
1,677

 
0.7

 
1,771

 
0.7

Loans delinquent 61-90 days (c)
1,052

 
0.5

 
1,110

 
0.5

 
1,283

 
0.5

Loans delinquent 91 days or greater (c)
4,231

 
2.1

 
3,666

 
1.6

 
4,979

 
2.1

Total loans in repayment
203,870

 
100.0
%
 
235,065

 
100.0
%
 
236,497

 
100.0
%
Total private education loans
$
212,160

 
 

 
$
273,659

 
 

 
$
267,642

 
 

(a)
Loans for borrowers who still may be attending school or engaging in other permitted educational activities and are not yet required to make payments on the loans, e.g., residency periods for medical students or a grace period for bar exam preparation for law students.

(b)
Loans for borrowers who have temporarily ceased making full payments due to hardship or other factors, according to a schedule approved by the servicer consistent with the established loan program servicing procedures and policies.

(c)
The period of delinquency is based on the number of days scheduled payments are contractually past due and relate to repayment loans, that is, receivables not charged off, and not in school, grace, deferment, or forbearance.

(d)
A portion of loans included in loans delinquent 271 days or greater includes loans in claim status, which are loans that have gone into default and have been submitted to the guaranty agency.
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 December 31, 2017
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
20,352,045

 
1.47% - 3.37%
 
8/25/21 - 2/25/66
Bonds and notes based on auction
780,829

 
2.09% - 2.69%
 
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes
21,132,874

 
 
 
 
FFELP warehouse facilities
335,992

 
1.55% / 1.56%
 
11/19/19 / 5/31/20
Variable-rate bonds and notes issued in private education loan asset-backed securitization
74,717

 
3.30%
 
12/26/40
 Fixed-rate bonds and notes issued in private education loan asset-backed securitization
82,647

 
3.60% / 5.35%
 
12/26/40 / 12/28/43
Unsecured line of credit
10,000

 
2.98%
 
12/12/21
Unsecured debt - Junior Subordinated Hybrid Securities
20,381

 
5.07%
 
9/15/61
Other borrowings
70,516

 
2.44% - 3.38%
 
1/12/18 - 12/15/45
 
21,727,127

 
 
 
 
Discount on bonds and notes payable and debt issuance costs
(370,554
)
 
 
 
 
Total
$
21,356,573

 
 
 
 
 
 
As of December 31, 2016
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
22,130,063

 
0.24% - 6.90%
 
6/25/21 - 9/25/65
Bonds and notes based on auction
998,415

 
1.61% - 2.28%
 
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes
23,128,478

 
 
 
 
FFELP warehouse facilities
1,677,443

 
0.63% - 1.09%
 
9/7/18 - 12/13/19
Variable-rate bonds and notes issued in private education loan asset-backed securitization
112,582

 
2.60%
 
12/26/40
Fixed-rate bonds and notes issued in private education loan asset-backed securitization
113,378

 
3.60% / 5.35%
 
12/26/40 / 12/28/43
Unsecured line of credit
—

 
—
 
12/12/21
Unsecured debt - Junior Subordinated Hybrid Securities
50,184

 
4.37%
 
9/15/61
Other borrowings
18,355

 
3.38%
 
3/31/23 / 12/15/45
 
25,100,420

 
 
 
 
Discount on bonds and notes payable and debt issuance costs
(431,930
)
 
 
 
 
Total
$
24,668,490

 
 
 
 


Secured Financing Transactions

The Company has historically relied upon secured financing vehicles as its most significant source of funding for loans. The net cash flow the Company receives from the securitized loans generally represents the excess amounts, if any, generated by the underlying loans over the amounts required to be paid to the bondholders, after deducting servicing fees and any other expenses relating to the securitizations. The Company’s rights to cash flow from securitized loans are subordinate to bondholder interests, and the securitized loans may fail to generate any cash flow beyond what is due to bondholders. The Company’s secured financing vehicles during the periods presented include loan warehouse facilities and asset-backed securitizations.

The majority of the bonds and notes payable are primarily secured by the loans receivable, related accrued interest, and by the amounts on deposit in the accounts established under the respective bond resolutions or financing agreements.

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 December 31, 2017, the Company had two FFELP warehouse facilities as summarized below.
 
NFSLW-I
 
NHELP-II
 
Total
Maximum financing amount
$
500,000

 
500,000

 
1,000,000

Amount outstanding
189,502

 
146,490

 
335,992

Amount available
$
310,498

 
353,510

 
664,008

Expiration of liquidity provisions
September 20, 2019

 
May 31, 2018
 
 
Final maturity date
November 19, 2019

 
May 31, 2020
 
 
Maximum advance rates
92.0 - 98.0%

 
85.0 - 95.0%

 
 
Minimum advance rates
84.0 - 90.0%

 
85.0 - 95.0%

 
 
Advanced as equity support
$
9,513

 
12,876

 
22,389


The FFELP warehouse facilities are 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-II warehouse facility has a static advance rate that requires initial equity for loan funding, but does 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 tables summarize the asset-backed securitization transactions completed in 2017 and 2016.
 
 
Securitizations completed during the year ended December 31, 2017
 
 
NSLT 2017-1
 
NSLT 2017-2
 
NSLT 2017-3
 
 
 
Total
Date securities issued
 
5/24/17
 
7/26/17
 
12/14/17
 
 
 
 
Total original principal amount
 
$
535,000

 
399,390

 
539,400

 
 
 
1,473,790

Bond discount
 
—

 
(2,002
)
 
—

 
 
 
(2,002
)
Issue price
 
$
535,000

 
397,388


539,400

 
 
 
1,471,788

Cost of funds:
 
1-month LIBOR plus 0.78%
 
1-month LIBOR plus 0.77%
 
1-month LIBOR plus 0.85%
 
 
 
 
Final maturity date
 
6/25/65
 
9/25/65
 
2/25/66
 
 
 
 

 
 
Securitizations completed during the year ended December 31, 2016
 
 
FFELP 2016-1
 
Private education loan 2016-A (a)
 
Total
 
 
 
 
Class A-1A notes
 
Class A-1B notes
 
2016-A total
 
 
Date securities issued
 
10/12/16
 
12/21/16
 
12/21/16
 
12/21/16
 
 
Total original principal amount
 
$
426,000

 
112,582

 
91,378

 
225,960

 
$
651,960

 
 
 
 
 
 
 
 
 
 
 
Class A senior notes:
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
$
426,000

 
112,582

 
91,378

 
203,960

 
629,960

Bond discount
 
—

 
—

 
(609
)
 
(609
)
 
(609
)
Issue price
 
$
426,000

 
112,582

 
90,769

 
203,351

 
629,351

Cost of funds:
 
1-month LIBOR plus 0.80%
 
1-month LIBOR plus 1.75%
 
3.60%
 
 
 
 
Final maturity date
 
9/25/65
 
12/26/40
 
12/26/40
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class B subordinated notes:
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
 
 
 
 
 
 
$
22,000

 
22,000

Bond discount
 
 
 
 
 
 
 
(285
)
 
(285
)
Issue price
 
 
 
 
 
 
 
$
21,715

 
21,715

Cost of funds:
 
 
 
 
 
 
 
5.35
%
 
 
Final maturity date
 
 
 
 
 
 
 
12/28/43

 
 

(a)
On June 26, 2015, the Company entered into a $275.0 million private education loan warehouse facility. The Company funded all loans that were included in this warehouse in the Private Education Loan 2016-A securitization and terminated the private education loan warehouse facility on December 21, 2016.

Auction Rate Securities

The interest rates on certain of the Company's FFELP asset-backed securities are set and periodically reset via a "dutch auction" ("Auction Rate Securities"). As of December 31, 2017, the Company is currently the sponsor on $780.8 million of Auction Rate Securities. The Auction Rate Securities generally pay interest to the holder at a maximum rate as defined by the indenture. While these rates will vary, they will generally be based on a spread to LIBOR or Treasury Securities, or the Net Loan Rate as defined in the financing documents. Based on the relative levels of these indices as of December 31, 2017, the rates expected to be paid by the Company range from LIBOR plus 100 basis points, on the low end, to LIBOR plus 250 basis points, on the high end. These maximum rates are subject to increase if the credit ratings on the bonds are downgraded.
Unsecured Line of Credit

The Company has a $350.0 million unsecured line of credit that has a maturity date of December 12, 2021. As of December 31, 2017, $10.0 million was outstanding on the line of credit and $340.0 million was available for future use. Interest on amounts borrowed under the line of credit is payable, at the Company's election, at an alternate base rate or a Eurodollar rate, plus a variable rate (LIBOR), in each case as defined in the credit agreement. The initial margin applicable to Eurodollar borrowings is 150 basis points and may vary from 100 to 200 basis points depending on the Company's credit rating.

The line of credit agreement contains certain financial covenants that, if not met, lead to an event of default under the agreement.  The covenants include maintaining:

•
A minimum consolidated net worth
•
A minimum adjusted EBITDA to corporate debt interest (over the last four rolling quarters)
•
A limitation on recourse indebtedness
•
A limitation on the amount of unsecuritized private education and consumer loans in the Company’s portfolio
•
A limitation on permitted investments, including business acquisitions that are not in one of the Company's existing lines of business

As of December 31, 2017, the Company was in compliance with all of these requirements. Many of these covenants are duplicated in the Company's other lending facilities, including its warehouse facilities.

The Company's operating line of credit does not have any covenants related to unsecured debt ratings. However, changes in the Company's ratings (as well as the amounts the Company borrows) have modest implications on the pricing level at which the Company obtains funds

A default on the Company's warehouse facilities would result in an event of default on the Company's unsecured line of credit that would result in the outstanding balance on the line of credit becoming immediately due and payable.

Junior Subordinated Hybrid Securities

On September 27, 2006, the Company issued $200.0 million aggregate principal amount of Junior Subordinated Hybrid Securities ("Hybrid Securities"). The Hybrid Securities are unsecured obligations of the Company. The interest rate on the Hybrid Securities through September 29, 2036 ("the scheduled maturity date") is equal to three-month LIBOR plus 3.375%, payable quarterly, which was 5.07% at December 31, 2017. The principal amount of the Hybrid Securities will become due on the scheduled maturity date only to the extent that prior to such date the Company has received proceeds from the sale of certain qualifying capital securities (as defined in the Hybrid Securities' indenture). If any amount is not paid on the scheduled maturity date, it will remain outstanding and bear interest at a floating rate as defined in the indenture, payable monthly. On September 15, 2061, the Company must pay any remaining principal and interest on the Hybrid Securities in full whether or not the Company has sold qualifying capital securities. At the Company's option, the Hybrid Securities are redeemable in whole or in part at their principal amount plus accrued and unpaid interest.

During the first quarter of 2017, the Company initiated a cash tender offer to purchase any and all of its outstanding Hybrid Securities, including a related consent solicitation to effect certain amendments to the indenture governing the notes to eliminate a provision requiring a minimum principal amount of the notes to remain outstanding after a partial redemption. The aggregate principal amount of notes tendered to the Company was $29.7 million. The Company paid $25.3 million to redeem these notes, and the amendments described above were made to the indenture.

Other Borrowings

During 2017, the Company entered into a repurchase agreement, the proceeds of which are collateralized by FFELP asset-backed security investments. Included in "other borrowings" as of December 31, 2017 was $50.4 million subject to this repurchase agreement.

The Company also has three notes payable, which were each issued by TDP Phase Three, LLC ("TDP") in connection with the development of a commercial building in Lincoln, Nebraska that is the new corporate headquarters for Hudl, a related party. TDP is an entity established during 2015 for the sole purpose of developing and operating this building. The Company owns 25 percent of TDP. However, because the Company was the developer of and a current tenant in this building, the operating results of TDP are included in the Company's consolidated financial statements. Recourse to the Company on the outstanding balance of these notes is equal to its ownership percentage of TDP. A summary of the TDP notes outstanding as of December 31, 2017 is summarized below:
Issue
date
 
Debt
outstanding
 
Maturity
date
 
Interest
rate
December 30, 2015
 
$
12,000

 
March 31, 2023
 
3.38% - fixed
December 30, 2015
 
6,355

 
December 15, 2045
 
3.38% - fixed
October 31, 2017
 
1,743

 
March 31, 2023
 
1-month LIBOR plus 2.00%


Debt Covenants

Certain bond resolutions and related credit agreements contain, among other requirements, covenants relating to restrictions on additional indebtedness, limits as to direct and indirect administrative expenses, and maintaining certain financial ratios. Management believes the Company is in compliance with all covenants of the bond indentures and related credit agreements as of December 31, 2017.

Maturity Schedule

Bonds and notes outstanding as of December 31, 2017 are due in varying amounts as shown below.
2018
 
$
50,418

2019
 
189,502

2020
 
146,490

2021
 
33,410

2022
 
—

2023 and thereafter
 
21,307,307

 
 
$
21,727,127


Generally, the Company's secured financing instruments can be redeemed on any interest payment date at par plus accrued interest. Subject to certain provisions, all bonds and notes are subject to redemption prior to maturity at the option of certain education lending subsidiaries.

Debt Repurchases

The following table summarizes the Company's repurchases of its own debt. Gains (losses) recorded by the Company from the repurchase of debt are included in "gain on sale of loans and debt repurchases, net" on the Company’s consolidated statements of income.

 
Par value
 
Purchase price
 
Gain (loss)
 
Par value
 
Purchase price
 
Gain (loss)
 
Par value
 
Purchase price
 
Gain (loss)
 
Year ended December 31,
 
2017
 
2016
 
2015
Unsecured debt - Hybrid Securities
$
29,803

 
25,357

 
4,446

 
7,000

 
4,865

 
2,135

 
14,504

 
11,374

 
3,130

Asset-backed securities
154,407

 
155,951

 
(1,544
)
 
78,412

 
72,566

 
5,846

 
32,026

 
30,354

 
1,672

 
$
184,210

 
181,308

 
2,902

 
85,412

 
77,431

 
7,981

 
46,530

 
41,728

 
4,802

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 a majority of its FFELP loan 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 December 31, 2017, the Company had $20.0 billion, $1.1 billion, and $0.6 billion of FFELP loans indexed to the one-month LIBOR rate, three-month commercial paper rate, and the three-month treasury bill rate, respectively, the indices for which reset daily, and $11.7 billion of debt indexed to three-month LIBOR, the indices for which reset quarterly, and $8.6 billion of debt indexed to one-month LIBOR, the indices for which reset monthly.

The Company has used derivative instruments to hedge its basis risk 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 December 31,
 
 
 
2017
 
2016
 
Maturity
 
Notional amount
 
Notional amount
 
2018
 
 
$
4,250,000

 
—

 
2019
 
 
3,500,000

 
—

 
2022
 
 
1,000,000

 
—

 
2024
 
 
250,000

 
—

 
2026
 
 
1,150,000

 
1,150,000

 
2027
 
 
375,000

 
—

 
2028
 
 
325,000

 
325,000

 
2029
 
 
100,000

 
—

 
2031
 
 
300,000

 
300,000

 
 
 
 
$
11,250,000

 
1,775,000


The weighted average rate paid by the Company on the 1:3 Basis Swaps as of December 31, 2017 and 2016, was one-month LIBOR plus 12.5 basis points and 10.1 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 these 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 December 31, 2017 and 2016, the Company had $4.8 billion and $8.4 billion, respectively, of FFELP student loan assets that were earning fixed rate floor income, of which the weighted average estimated variable conversion rate for these loans, which is the estimated short-term interest rate at which loans would convert to a variable rate, was 3.17% and 2.42%, respectively.

The following tables summarize the outstanding derivative instruments used by the Company to economically hedge loans earning fixed rate floor income.
 
 
 
As of December 31, 2017
 
As of December 31, 2016
 
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
 
 
 
 
 
2017
 
$
—

 
—
%
 
$
750,000

 
0.99
%
 
2018
 
1,350,000

 
1.07

 
1,350,000

 
1.07

 
2019
 
3,250,000

 
0.97

 
3,250,000

 
0.97

 
2020
 
1,500,000

 
1.01

 
1,500,000

 
1.01

 
2023
 
750,000

 
2.28

 
—

 
—

 
2024
 
300,000

 
2.28

 
—

 
—

 
2025
 
100,000

 
2.32

 
100,000

 
2.32

 
2027
 
50,000

 
2.32

 
—

 
—

 
 
 
$
7,300,000

 
1.21
%
 
$
6,950,000

 
1.02
%
 
(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.
On August 20, 2014, the Company paid $9.1 million for an interest rate swap option to economically hedge loans earning fixed rate floor income. The interest rate swap option gives the Company the right, but not the obligation, to enter into a $250.0 million notional interest rate swap in which the Company would pay a fixed amount of 3.30% and receive discrete one-month LIBOR. If the interest rate swap option is exercised, the swap would become effective in 2019 and mature in 2024.

Interest Rate Caps

In June 2015, in conjunction with the entry into a $275.0 million private education loan warehouse facility, the Company paid $2.9 million for two interest rate cap contracts with a total notional amount of $275.0 million. The first interest rate cap has a notional amount of $125.0 million and a one-month LIBOR strike rate of 2.50%, and the second interest rate cap has a notional amount of $150.0 million and a one-month LIBOR strike rate of 4.99%. In the event that the one-month LIBOR rate rises above the applicable strike rate, the Company would receive monthly payments related to the spread difference. Both interest rate cap contracts have a maturity date of July 15, 2020. The private education loan warehouse facility was terminated by the Company on December 21, 2016. During the first quarter of 2017, the Company received $913,000 to terminate the interest rate cap contracts that were held in the private education loan warehouse legal entity and paid $929,000 to enter into new interest rate cap contracts with identical terms at Nelnet, Inc. (the parent company). The Company currently intends to keep these derivatives outstanding to partially mitigate a rise in interest rates and its impact on earnings related to its student loan portfolio earning a fixed rate.

Interest rate swaps – unsecured debt hedges

As of December 31, 2017 and 2016, the Company had $20.4 million and $50.2 million, respectively, of unsecured Hybrid Securities outstanding. The interest rate on the Hybrid Securities through September 29, 2036 is equal to three-month LIBOR plus 3.375%, payable quarterly. As of December 31, 2017 and 2016, 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 7.66%.
 
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
2036
 
$
25,000

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

Foreign Currency Exchange Risk

In 2006, the Company issued €352.7 million of student loan asset-backed Euro Notes (the "Euro Notes") with an interest rate based on a spread to the EURIBOR index. On October 25, 2017, the Company completed a remarketing of the Euro Notes which reset principal amount outstanding on the Euro Notes to $450.0 million U.S. dollars with an interest rate based on the 3-month LIBOR index. As a result of the Euro Notes, the Company was 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 were 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 were included in the Company’s consolidated statements of income.

The Company entered into a cross-currency interest rate swap in connection with the issuance of the Euro Notes. On October 25, 2017, the Company terminated the cross-currency swap when the Euro Notes were remarketed. Under the terms of the cross-currency interest rate swap, the Company received from the counterparty a spread to the EURIBOR index based on a notional amount of €352.7 million and paid a spread to the LIBOR index based on a notional amount of $450.0 million.

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.
 
Year ended December 31,
 
2017
 
2016
 
2015
Re-measurement of Euro Notes
$
(45,600
)
 
11,849

 
43,801

Change in fair value of cross currency interest rate swap
34,208

 
(1,954
)
 
(45,195
)
Total impact to consolidated statements of income - (expense) income (a)
$
(11,392
)
 
9,895

 
(1,394
)

(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.
Management structured the cross-currency interest rate swap to economically hedge the Euro Notes to effectively convert the Euro Notes to U.S. dollars and pay a spread on these notes based on the LIBOR index. However, the cross-currency interest rate swap did not qualify for hedge accounting. The re-measurement of the Euro-denominated bonds generally correlated with the change in the fair value of the corresponding cross-currency interest rate swap. However, the Company experienced unrealized gains and losses between these financial instruments due to the principal and accrued interest on the Euro Notes being re-measured to U.S. dollars at each reporting date based on the foreign currency exchange rate on that date, while the cross-currency interest rate swap was measured at fair value at each reporting date with the change in fair value recognized in the current period earnings.
Consolidated Financial Statement Impact Related to Derivatives

Balance Sheet

The following table summarizes the fair value of the Company’s derivatives as reflected on the consolidated balance sheets.
 
Fair value of asset derivatives
 
Fair value of liability derivatives
 
As of
 
As of
 
As of
 
As of
 
December 31, 2017
 
December 31, 2016
 
December 31, 2017
 
December 31, 2016
1:3 basis swaps
$
—

 
—

 
—

 
2,624

Interest rate swaps - floor income hedges
—

 
81,159

 
—

 
256

Interest rate swap option - floor income hedge
543

 
2,977

 
—

 
—

Interest rate caps
275

 
1,152

 
—

 
—

Interest rate swaps - hybrid debt hedges
—

 
—

 
7,063

 
7,341

Cross-currency interest rate swap
—

 
—

 
—

 
67,605

Other
—

 
2,243

 
—

 
—

Total
$
818

 
87,531

 
7,063

 
77,826



During the year ended December 31, 2017 the Company terminated certain derivatives for net payments of $30.4 million, including proceeds of $2.1 million and $0.9 million on the termination of 1:3 basis swaps and interest rate caps, respectively, and payments of $33.4 million on the termination of cross-currency interest rate swap. During the year ended December 31, 2016, the Company terminated certain derivatives for net proceeds of $4.0 million, including proceeds of $0.6 million and $3.4 million from the termination of 1:3 basis swaps and interest rate swaps used to hedge loans earning fixed rate floor income, respectively.

Offsetting of Derivative Assets/Liabilities

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 pledged
 
Net asset (liability)
Balance as of December 31, 2017
 
$
818

 
—

 
—

 
818

Balance as of December 31, 2016
 
87,531

 
(2,880
)
 
475

 
85,126


 
 
 
 
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
 
Net asset (liability)
Balance as of December 31, 2017
 
$
(7,063
)
 
—

 
8,520

 
1,457

Balance as of December 31, 2016
 
(77,826
)
 
2,880

 
7,292

 
(67,654
)


Income Statement

The following table summarizes the components of "derivative market value and foreign currency transaction adjustments and derivative settlements, net" included in the consolidated statements of income.
 
 
Year ended December 31,
 
 
2017
 
2016
 
2015
Settlements:
 
 

 
 

 
 
1:3 basis swaps
 
$
(3,069
)
 
1,493

 
1,058

Interest rate swaps - floor income hedges
 
10,838

 
(17,643
)
 
(23,041
)
Interest rate swaps - hybrid debt hedges
 
(781
)
 
(915
)
 
(1,012
)
Cross-currency interest rate swap
 
(6,321
)
 
(4,884
)
 
(1,255
)
Total settlements - income (expense)
 
667

 
(21,949
)
 
(24,250
)
Change in fair value:
 
 

 
 

 
 

1:3 basis swaps
 
(8,224
)
 
(2,938
)
 
12,292

Interest rate swaps - floor income hedges
 
3,585

 
64,111

 
20,103

Interest rate swap option - floor income hedge
 
(2,433
)
 
(281
)
 
(2,420
)
Interest rate caps
 
(893
)
 
(419
)
 
(1,365
)
Interest rate swaps - hybrid debt hedges
 
279

 
304

 
(295
)
Cross-currency interest rate swap
 
34,208

 
(1,954
)
 
(45,195
)
Other
 
(143
)
 
1,072

 
1,730

Total change in fair value - income (expense)
 
26,379

 
59,895

 
(15,150
)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
 
(45,600
)
 
11,849

 
43,801

Derivative market value and foreign currency transaction adjustments and derivative settlements, net - income (expense)
 
$
(18,554
)
 
49,795

 
4,401



Derivative Instruments - Credit and Market Risk

New clearing requirements reduce counterparty risk associated with over-the-counter derivatives executed by the Company after June 10, 2013. For non-centrally cleared derivatives, the Company is exposed to credit risk.

When the fair value of a non-centrally cleared derivative is positive (an asset in the Company's consolidated balance sheet), this generally indicates that the counterparty would owe the Company if the derivative was settled. If the counterparty fails to perform, credit risk with such counterparty is equal to the extent of the fair value gain in the derivative less any collateral held by the Company. If the Company was unable to collect from a counterparty, it would have a loss equal to the amount the derivative is recorded in the consolidated balance sheet.

The Company considers counterparties' credit risk when determining the fair value of derivative positions on its exposure net of collateral. However, the Company does not use the collateral to offset fair value amounts recognized for derivative instruments in the financial statements.

When the fair value of a non-centrally cleared derivative is negative (a liability in the Company's consolidated balance sheet), the Company would owe the counterparty if the derivative was settled and, therefore, has no immediate credit risk.  If the negative fair value of derivatives with a counterparty exceeds a specified threshold, the Company may have to make a collateral deposit with the counterparty. The threshold at which the Company may be required to post collateral is dependent upon the Company's unsecured credit rating.  The Company believes any downgrades from its current unsecured credit rating (Standard & Poor's: BBB- (stable outlook), Moody's: Ba1 (stable outlook), and DBRS: BBB (low) (stable outlook)), would not result in additional collateral requirements of a material nature. In addition, no counterparty has the right to terminate its contracts in the event of downgrades from the current ratings.

Interest rate movements have an impact on the amount of collateral the Company is required to deposit with its derivative instrument counterparties and variation margin payments to its third-party clearinghouse. The Company attempts to manage market risk associated with interest rates by establishing and monitoring limits as to the types and degree of risk that may be undertaken. The Company's derivative portfolio and hedging strategy is reviewed periodically by its internal risk committee and board of directors' Risk and Finance Committee. With the Company's current derivative portfolio, the Company does not currently anticipate any movement in interest rates having a material impact on its liquidity or capital resources, nor expects future movements in interest rates to have a material impact on its ability to meet potential collateral deposits with its counterparties and variation margin payments to its third-party clearinghouse. Due to the existing low interest rate environment, the Company's exposure to downward movements in interest rates on its interest rate swaps is limited.  In addition, the historical high correlation between one-month and three-month LIBOR limits the Company's exposure to interest rate movements on the 1:3 Basis Swaps.
Investments and Notes Receivable
Investments and Notes Receivable
Investments and Notes Receivable

A summary of the Company's investments and notes receivable follows:
 
As of December 31, 2017
 
As of December 31, 2016
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses (a)
 
Fair value
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
 
 
 
 
 
 
 
 
Investments (at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities (b)
$
71,943

 
5,056

 
(25
)
 
76,974

 
98,260

 
6,280

 
(641
)
 
103,899

Equity securities
1,630

 
2,298

 
—

 
3,928

 
720

 
1,930

 
(61
)
 
2,589

Total available-for-sale investments
$
73,573

 
7,354

 
(25
)
 
80,902

 
98,980

 
8,210

 
(702
)
 
106,488

Trading investments - equity securities
 
 
 
 
 
 
—

 
 
 
 
 
 
 
105

Total available-for-sale and trading investments
 
 
 
 
 
 
80,902

 
 
 
 
 
 
 
106,593

Other Investments and Notes Receivable (not measured at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
Venture capital and funds
 
 
 
 
 
 
84,752

 
 
 
 
 
 
 
69,789

Real estate
 
 
 
 
 
 
49,464

 
 
 
 
 
 
 
48,379

Notes receivable
 
 
 
 
 
 
16,393

 
 
 
 
 
 
 
17,031

Tax liens and affordable housing
 
 
 
 
 
 
9,027

 
 
 
 
 
 
 
12,352

Total investments and notes receivable
 
 
 
 
 
 
$
240,538

 
 
 
 
 
 
 
254,144


(a)
As of December 31, 2017, the aggregate fair value of available-for-sale investments with unrealized losses was $12.3 million of which none had been in a continuous unrealized loss position for greater than 12 months. Because the Company currently has the intent and ability to retain these investments for an anticipated recovery in fair value, as of December 31, 2017, 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 December 31, 2017, the stated maturities of substantially all of the Company's student loan asset-backed securities and other debt securities classified as available-for-sale were greater than 10 years.

The following table summarizes the amount included in "other income" in the consolidated statements of income related to the Company's investments classified as available-for-sale and trading.
 
 
Year ended December 31,
 
 
2017
 
2016
 
2015
Available-for-sale securities:
 
 
 
 
 
 
Gross realized gains
 
$
3,767

 
3,099

 
3,402

Gross realized losses
 
(1,239
)
 
(1,192
)
 
(447
)
Trading securities:
 
 
 
 
 
 
Unrealized gains (losses), net
 
(14
)
 
525

 
(715
)
Realized gains (losses), net
 
—

 
341

 
(2,097
)
 
 
$
2,514

 
2,773

 
143

Business Combination
Business Combination
Business Combination

ALLO

On December 31, 2015, the Company purchased 92.5 percent of the ownership interests of ALLO for total cash consideration of $46.25 million.  On January 1, 2016, the Company sold a 1.0 percent ownership interest in ALLO to a non-related third-party for $0.5 million. The remaining 7.5 percent of the ownership interests of ALLO is owned by ALLO management, who has the opportunity to earn an additional 11.5 percent (up to 19 percent) of the total ownership interests based on the financial performance of ALLO.  The additional ownership interests that ALLO management has the opportunity to earn are based on their continued employment with ALLO. Accordingly, the value associated with the ownership interests issued to these employees of $1.0 million will be recognized by ALLO as compensation expense over the performance period.

ALLO provides pure fiber optic service to homes and businesses for internet, television, and telephone services.  The acquisition of ALLO provides additional diversification of the Company's revenues and cash flows outside of education.  In addition, the acquisition leverages the Company's existing infrastructure, customer service capabilities and call centers, and financial strength and liquidity for continued growth. 

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. During the first quarter of 2016, the Company recognized certain adjustments to the provisional amounts recorded at December 31, 2015 that were needed to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The net impact of these adjustments was an increase to goodwill, and the adjustments had no impact on operating results.
Cash and cash equivalents
 
$
334

Restricted cash
 
850

Accounts receivable
 
1,935

Property and equipment
 
32,479

Other assets
 
371

Intangible assets
 
11,410

Excess cost over fair value of net assets acquired (goodwill)
 
21,112

Other liabilities
 
(4,587
)
Bonds and notes payable
 
(13,904
)
Net assets acquired
 
50,000

Minority interest
 
(3,750
)
Total consideration paid by the Company
 
$
46,250



The $11.4 million of acquired intangible assets on the date of acquisition had a weighted-average useful life of approximately 12 years. The intangible assets that made up this amount included customer relationships of $6.3 million (10-year useful life) and a trade name of $5.1 million (15-year useful life).

The $21.1 million of goodwill was assigned to the Communications operating segment and is expected to be deductible for tax purposes. The amount allocated to goodwill was primarily attributable to future customers to be generated through the continued expansion of ALLO's services in rural markets.

The proforma impacts of the acquisition on the Company's historical results prior to the acquisition were not material.
Intangible Assets
Intangible Assets
Intangible Assets

Intangible assets consist of the following:
 
Weighted average remaining useful life as of December 31, 2017 (months)
 
As of December 31, 2017
 
As of December 31, 2016
 
 
 
Amortizable intangible assets, net:
 
 
 
 
 
Customer relationships (net of accumulated amortization of $12,715 and $8,548, respectively)
160
 
$
24,168

 
28,335

Trade names (net of accumulated amortization of $2,498 and $1,653, respectively)
89
 
9,074

 
9,919

Computer software (net of accumulated amortization of $10,013 and $5,675, respectively)
14
 
4,958

 
9,296

Covenants not to compete (net of accumulated amortization of $127 and $91, respectively)
77
 
227

 
263

Total - amortizable intangible assets, net
124
 
$
38,427

 
47,813



The Company recorded amortization expense on its intangible assets of $9.4 million, $11.6 million, and $9.8 million during the years ended December 31, 2017, 2016, and 2015, respectively. The Company will continue to amortize intangible assets over their remaining useful lives. As of December 31, 2017, the Company estimates it will record amortization expense as follows:
2018
$
10,428

2019
6,990

2020
3,789

2021
3,077

2022
2,474

2023 and thereafter
11,669

 
$
38,427

Goodwill
Goodwill
Goodwill

The change in the carrying amount of goodwill by reportable operating segment was as follows:
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset Generation and Management (a)
 
Corporate and Other Activities
 
Total
Balance as of December 31, 2015
$
8,596

 
67,168

 
19,800

 
41,883

 
8,553

 
146,000

ALLO purchase price adjustment
—

 
—

 
1,312

 
—

 
—

 
1,312

Balance as of December 31, 2016
8,596

 
67,168

 
21,112

 
41,883

 
8,553

 
147,312

Impairment expense
—

 
—

 
—

 
—

 
(3,626
)
 
(3,626
)
Sale of Peterson's
—

 
—

 
—

 
—

 
(4,927
)
 
(4,927
)
Balance as of December 31, 2017
$
8,596

 
67,168

 
21,112

 
41,883

 
—

 
138,759


(a)
As a result of the Reconciliation Act of 2010, the Company no longer originates new FFELP loans, and net interest income from the Company's existing FFELP loan portfolio will decline over time as the Company's portfolio pays down. As a result, as this revenue stream winds down, goodwill impairment will be triggered for the Asset Generation and Management reporting unit due to the passage of time and depletion of projected cash flows stemming from its FFELP student loan portfolio. Management believes the elimination of new FFELP loan originations will not have an adverse impact on the fair value of the Company's other reporting units.

The Company reviews goodwill for impairment annually. This annual review is completed by the Company as of November 30 of each year and whenever triggering events or changes in circumstances indicate its carrying value may not be recoverable. On November 30, 2017, due to the anticipated sale of Peterson's, the Company recognized an impairment expense of $3.6 million related to goodwill initially recorded upon the acquisition of Peterson's. On December 31, 2017, the Company sold Peterson's for $5.0 million in cash. The impairment expense recognized by the Company is included in "other expenses" in the consolidated statement of income.
For the 2017 annual review of goodwill, with the exception of the sale of Peterson's as discussed previously, the Company assessed qualitative factors and concluded it was not more likely than not that the fair value of its reporting units were less than their carrying amount. As such, the Company was not required to perform further impairment testing and concluded there was no impairment of goodwill.
Property and Equipment
Property and Equipment
Property and Equipment

Property and equipment consisted of the following:
 
 
 
As of December 31,
 
Useful life
 
2017
 
2016
Non-communications:
 
 
 
 
 
Computer equipment and software
1-5 years
 
$
124,708

 
97,317

Building and building improvements
5-39 years
 
24,003

 
13,363

Office furniture and equipment
3-7 years
 
15,210

 
12,344

Leasehold improvements
5-15 years
 
7,759

 
3,579

Transportation equipment
4-10 years
 
3,813

 
3,809

Land
—
 
2,628

 
1,682

Construction in progress
—
 
4,127

 
16,346

 
 
 
182,248

 
148,440

Accumulated depreciation - non-communications
 
 
105,017

 
91,285

Non-communications, net property and equipment
 
 
77,231

 
57,155

 
 
 
 
 
 
Communications:
 
 
 
 
 
Network plant and fiber
5-15 years
 
138,122

 
40,844

Customer located property
5-10 years
 
13,767

 
5,138

Central office
5-15 years
 
10,754

 
6,448

Transportation equipment
4-10 years
 
5,759

 
2,966

Computer equipment and software
1-5 years
 
3,790

 
2,026

Other
1-39 years
 
2,516

 
1,268

Land
—
 
70

 
70

Construction in progress
—
 
11,620

 
12,537

 
 
 
186,398

 
71,297

Accumulated depreciation - communications
 
 
15,578

 
4,666

Communications, net property and equipment
 
 
170,820

 
66,631

Total property and equipment, net
 
 
$
248,051

 
123,786



The Company recorded depreciation expense on its property and equipment of $30.2 million, $22.4 million, and $16.5 million during the years ended December 31, 2017, 2016, and 2015, respectively.
Shareholders' Equity
Stockholders' Equity
Shareholders’ Equity

Classes of Common Stock

The Company's common stock is divided into two classes. The Class B common stock has ten votes per share and the Class A common stock has one vote per share on all matters to be voted on by the Company's shareholders. Each Class B share is convertible at any time at the holder's option into one Class A share. With the exception of the voting rights and the conversion feature, the Class A and Class B shares are identical in terms of other rights, including dividend and liquidation rights.

Stock Repurchases

The Company has a stock repurchase program that expires on May 25, 2019 in which it can repurchase up to five million shares of its Class A common stock on the open market, through private transactions, or otherwise. As of December 31, 2017, 3.1 million shares may still be purchased under the Company's stock repurchase program. Shares repurchased by the Company during 2017, 2016, and 2015 are shown in the table below.
 
 
Total shares repurchased
 
Purchase price (in thousands)
 
Average price of shares repurchased (per share)
Year ended December 31, 2017
 
1,473,054

 
$
68,896

 
$
46.77

Year ended December 31, 2016
 
2,038,368

 
69,091

 
33.90

Year ended December 31, 2015
 
2,449,159

 
96,169

 
39.27



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.
 
Year ended December 31,
 
2017
 
2016
 
2015
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
171,442

 
1,724

 
173,166

 
254,063

 
2,688

 
256,751

 
265,129

 
2,850

 
267,979

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
41,375,964

 
415,977

 
41,791,941

 
42,222,335

 
446,735

 
42,669,070

 
45,045,199

 
484,141

 
45,529,340

Earnings per share - basic and diluted
$
4.14

 
4.14

 
4.14

 
6.02

 
6.02

 
6.02

 
5.89

 
5.89

 
5.89



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 December 31, 2017, a cumulative amount of 171,519 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.
Income Taxes
Income Taxes
Income Taxes

The Company is subject to income taxes in the United States, Canada, and Australia. Significant judgment is required in evaluating the Company's tax positions and determining the provision for income taxes. During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain.
 
As required by the Income Taxes Topic of the FASB Accounting Standards Codification ("ASC Topic 740"), the Company recognizes in the consolidated financial statements only those tax positions determined to be more likely than not of being sustained upon examination, based on the technical merits of the positions. It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions be recognized in earnings in the period of such change.

As of December 31, 2017, the total amount of gross unrecognized tax benefits (excluding the federal benefit received from state positions) was $28.4 million, which is included in “other liabilities” on the consolidated balance sheet. Of this total, $22.4 million (net of the federal benefit on state issues) represents the amount of unrecognized tax benefits that, if recognized, would favorably affect the effective tax rate in future periods. The Company currently anticipates uncertain tax positions will decrease by $7.1 million prior to December 31, 2018 as a result of a lapse of applicable statutes of limitations, settlements, correspondence with examining authorities, and recognition or measurement considerations with federal and state jurisdictions; however, actual developments in this area could differ from those currently expected. Of the anticipated $7.1 million decrease, $5.6 million, if recognized, would favorably affect the Company's effective tax rate. A reconciliation of the beginning and ending amount of gross unrecognized tax benefits follows:
 
Year ended December 31,
 
2017
 
2016
Gross balance - beginning of year
$
28,004

 
27,688

Additions based on tax positions of prior years
145

 
904

Additions based on tax positions related to the current year
2,903

 
4,347

Settlements with taxing authorities
—

 
—

Reductions for tax positions of prior years
(356
)
 
(3,088
)
Reductions based on tax positions related to the current year
—

 
—

Reductions due to lapse of applicable statutes of limitations
(2,275
)
 
(1,847
)
Gross balance - end of year
$
28,421

 
28,004



All the reductions shown in the table above that are due to prior year tax positions and the lapse of statutes of limitations impacted the effective tax rate.

The Company's policy is to recognize interest and penalties accrued on uncertain tax positions as part of interest expense and other expense, respectively. As of December 31, 2017 and 2016, $4.5 million and $3.5 million in accrued interest and penalties, respectively, were included in “other liabilities” on the consolidated balance sheets. The Company recognized interest expense of $0.8 million, $0.3 million, and $1.2 million related to uncertain tax positions for the years ended December 31, 2017, 2016, and 2015, respectively. The impact to the consolidated statements of income related to penalties for uncertain tax positions was not significant for the years 2017, 2016, and 2015. The impact of timing differences and tax attributes are considered when calculating interest and penalty accruals associated with the unrecognized tax benefits.
The Company and its subsidiaries file a consolidated federal income tax return in the U.S. and the Company or one of its subsidiaries files income tax returns in various state, local, and foreign jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years prior to 2014. The Company is no longer subject to U.S. state and local income tax examinations by tax authorities prior to 2007. As of December 31, 2017, the Company has tax uncertainties that remain unsettled in the following jurisdictions:
California        2010 through 2015
Maine            2011 through 2016
New York        2008 through 2014
Texas            2007 through 2009

The provision for income taxes consists of the following components:
 
Year ended December 31,
 
2017
 
2016
 
2015
Current:
 
 
 
 
 
Federal
$
65,196

 
111,302

 
140,778

State
1,246

 
3,019

 
4,530

Foreign
(35
)
 
(13
)
 
23

Total current provision
66,407

 
114,308

 
145,331

 
 
 
 
 
 
Deferred:
 
 
 
 
 
Federal
(8,270
)
 
25,423

 
3,572

State
6,618

 
1,976

 
3,875

Foreign
108

 
(394
)
 
(398
)
Total deferred provision
(1,544
)
 
27,005

 
7,049

Provision for income tax expense
$
64,863

 
141,313

 
152,380



The differences between the income tax provision computed at the statutory federal corporate tax rate and the financial statement provision for income taxes are shown below:
 
Year ended December 31,
 
2017
 
2016
 
2015
Tax expense at federal rate
35.0
  %
 
35.0
  %
 
35.0
  %
Increase (decrease) resulting from:
 
 
 
 
 
Reduction of statutory federal rate (a)
(8.0
)
 
—

 
—

State tax, net of federal income tax benefit
1.6
 
 
1.1
 
 
1.0
 
Provision for uncertain federal and state tax matters
—

 
—

 
0.9
 
Tax credits
(1.3
)
 
(0.6
)
 
(0.5
)
Other
—

 
—

 
(0.1
)
Effective tax rate
27.3
  %
 
35.5
  %
 
36.3
  %


(a)
The Tax Cuts and Jobs Act (the “Tax Act”), signed into law on December 22, 2017, changes existing United States tax law and includes numerous provisions that affect businesses, including the Company.  The Tax Act, for instance, introduces changes that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits.

The Company accounted for the change in tax laws in accordance with ASC Topic 740 that provides guidance that a change in tax law or rates be recognized in the financial reporting period that includes the enactment date, which is the date the changes were signed into law.  The income tax accounting effect of a change in tax laws or tax rates includes, for example, adjusting (or re-measuring) deferred tax liabilities and deferred tax assets, as well as evaluating whether a valuation allowance is needed for deferred tax assets.  The Company re-measured its deferred tax liabilities and deferred tax assets as of December 22, 2017 resulting in a decrease to income tax expense of $19.3 million.  The Company determined no valuation allowance was needed for any deferred tax assets as a result of the Act.

In December 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 (SAB 118), which provides guidance regarding how a company is to reflect provisional amounts when necessary information is not yet available, prepared, or analyzed sufficiently to complete its accounting for the effect of the changes in the Tax Act. The income tax benefit of $19.3 million recorded during the year ended December 31, 2017 represents all known and estimable impacts of the Tax Act and is a provisional amount based on the Company’s current best estimate. This provisional amount incorporates assumptions made based upon the Company’s current interpretations of the Tax Act and may change as the Company receives additional clarification and implementation guidance, and as data becomes available allowing for a more accurate scheduling of the deferred tax assets and liabilities, including those related to items potentially impacted by the Tax Act such as accruals in 2017 related to payments not occurring until later in 2018, partnership basis, and tax implications of the Tax Act at state and local jurisdictions. Adjustments to this provisional amount through December 22, 2018 will be included in income from operations as an adjustment to tax expense in future periods.

The tax effect of temporary differences that give rise to deferred tax assets and liabilities include the following:
 
As of December 31,
 
2017
 
2016
Deferred tax assets:
 
 
 
Student loans
$
13,532

 
20,980

Deferred revenue
3,246

 
2,699

Securitizations
2,970

 
5,675

Intangible assets
2,899

 
4,821

Accrued expenses
2,246

 
3,533

Stock compensation
1,744

 
2,948

Total gross deferred tax assets
26,637

 
40,656

Less valuation allowance
(254
)
 
(264
)
Net deferred tax assets
26,383

 
40,392

Deferred tax liabilities:
 
 
 
Basis in certain derivative contracts
23,051

 
46,636

Partnership basis
21,474

 
4,976

Loan origination services
8,001

 
13,019

Depreciation
4,958

 
5,128

Debt repurchases
3,856

 
12,457

Debt and equity investments
1,767

 
3,246

Other
823

 
360

Total gross deferred tax liabilities
63,930

 
85,822

Net deferred tax liability
$
(37,547
)
 
(45,430
)


The Company has performed an evaluation of the recoverability of deferred tax assets. In assessing the realizability of the Company's deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected taxable income, carry back opportunities, and tax planning strategies in making the assessment of the amount of the valuation allowance. With the exception of a portion of the Company's state net operating loss, it is management's opinion that it is more likely than not that the deferred tax assets will be realized and should not be reduced by a valuation allowance. The amount of deferred tax assets considered realizable could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

As of December 31, 2017 and 2016, the Company had a current income tax receivable of $42.4 million and $13.0 million, respectively, that is included in "other assets" on the consolidated balance sheets.
Segment Reporting
Segment Reporting
Segment Reporting

The Company has four reportable operating segments. The Company's reportable operating segments include:

• Loan Systems and Servicing
• Tuition Payment Processing and Campus Commerce
• Communications
• Asset Generation and Management

The Company earns fee-based revenue through its Loan Systems and Servicing, Tuition Payment Processing, and Communications operating segments. In addition, the Company earns interest income on its 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, "Description of Business," 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. GAAP.  

The accounting policies of the Company’s operating segments are the same as those described in the summary of significant accounting policies. Intersegment revenues are charged by a 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.  Income taxes are allocated based on 38% of income 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 and Other Activities.

Corporate and Other Activities

Other business activities and operating segments that are not reportable are combined and included in Corporate and Other Activities. Corporate and Other Activities includes the following items:

•
Income earned on certain investment activities
•
Interest expense incurred on unsecured debt transactions
•
Other product and service offerings that are not considered reportable operating segments including, but not limited to, WRCM, the SEC-registered investment advisor subsidiary

Corporate and Other Activities also includes certain corporate activities and overhead functions related to executive management, internal audit, human resources, accounting, legal, enterprise risk management, information technology, occupancy, and marketing. These costs are allocated to each operating segment based on estimated use of such activities and services.

Segment Results

The following tables include the results of each of the Company's reportable operating segments reconciled to the consolidated financial statements.
 
Year ended December 31, 2017
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
513

 
17

 
3

 
764,225

 
13,643

 
(7,976
)
 
770,426

Interest expense
3

 
—

 
5,427

 
464,256

 
3,477

 
(7,976
)
 
465,188

Net interest income
510

 
17

 
(5,424
)
 
299,969

 
10,166

 
—

 
305,238

Less provision for loan losses
—

 
—

 
—

 
14,450

 
—

 
—

 
14,450

Net interest income (loss) after provision for loan losses
510

 
17

 
(5,424
)
 
285,519

 
10,166

 
—

 
290,788

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
223,000

 
—

 
—

 
—

 
—

 
—

 
223,000

Intersegment servicing revenue
41,674

 
—

 
—

 
—

 
—

 
(41,674
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
145,751

 
—

 
—

 
—

 
—

 
145,751

Communications revenue
—

 
—

 
25,700

 
—

 
—

 
—

 
25,700

Other income
—

 
—

 
—

 
13,424

 
39,402

 
—

 
52,826

Gain on sale of loans and debt repurchases, net
—

 
—

 
—

 
(1,567
)
 
4,469

 
—

 
2,902

Derivative settlements, net
—

 
—

 
—

 
1,448

 
(781
)
 
—

 
667

Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
(19,357
)
 
136

 
—

 
(19,221
)
Total other income
264,674

 
145,751

 
25,700

 
(6,052
)
 
43,226

 
(41,674
)
 
431,625

Operating expenses:
 

 
 

 
 
 
 

 
 

 
 

 
 

Salaries and benefits
156,256

 
69,500

 
14,947

 
1,548

 
59,633

 
—

 
301,885

Depreciation and amortization
2,864

 
9,424

 
11,835

 
—

 
15,418

 
—

 
39,541

Loan servicing fees
—

 
—

 
—

 
22,734

 
—

 
—

 
22,734

Cost to provide communications services
—

 
—

 
9,950

 
—

 
—

 
—

 
9,950

Other expenses
39,126

 
19,138

 
8,074

 
3,900

 
51,381

 
—

 
121,619

Intersegment expenses, net
31,871

 
9,079

 
2,101

 
42,830

 
(44,208
)
 
(41,674
)
 
—

Total operating expenses
230,117

 
107,141

 
46,907

 
71,012

 
82,224

 
(41,674
)
 
495,729

Income (loss) before income taxes
35,067

 
38,627

 
(26,631
)
 
208,455

 
(28,832
)
 
—

 
226,684

Income tax (expense) benefit
(18,128
)
 
(14,678
)
 
10,120

 
(79,213
)
 
37,036

 
—

 
(64,863
)
Net income (loss)
16,939

 
23,949

 
(16,511
)
 
129,242

 
8,204

 
—

 
161,821

  Net loss (income) attributable to noncontrolling interests
12,640

 
—

 
—

 
—

 
(1,295
)
 
—

 
11,345

Net income (loss) attributable to Nelnet, Inc.
$
29,579

 
23,949

 
(16,511
)
 
129,242

 
6,909

 
—

 
173,166

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of December 31, 2017
$
122,330

 
250,351

 
214,336

 
22,910,974

 
877,859

 
(411,415
)
 
23,964,435


 
Year ended December 31, 2016
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
111

 
9

 
1

 
754,788

 
10,913

 
(5,076
)
 
760,746

Interest expense
—

 
—

 
1,271

 
385,913

 
6,076

 
(5,076
)
 
388,183

Net interest income
111

 
9

 
(1,270
)
 
368,875

 
4,837

 
—

 
372,563

Less provision for loan losses
—

 
—

 
—

 
13,500

 
—

 
—

 
13,500

Net interest income (loss) after provision for loan losses
111

 
9

 
(1,270
)
 
355,375

 
4,837

 
—

 
359,063

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
214,846

 
—

 
—

 
—

 
—

 
—

 
214,846

Intersegment servicing revenue
45,381

 
—

 
—

 
—

 
—

 
(45,381
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
132,730

 
—

 
—

 
—

 
—

 
132,730

Communications revenue
—

 
—

 
17,659

 
—

 
—

 
—

 
17,659

Enrollment services revenue
—

 
—

 
—

 
—

 
4,326

 
—

 
4,326

Other income
—

 
—

 
—

 
15,709

 
38,221

 
—

 
53,929

Gain on sale of loans and debt repurchases, net
—

 
—

 
—

 
5,846

 
2,135

 
—

 
7,981

Derivative settlements, net
—

 
—

 
—

 
(21,034
)
 
(915
)
 
—

 
(21,949
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
70,368

 
1,376

 
—

 
71,744

Total other income
260,227

 
132,730

 
17,659

 
70,889

 
45,143

 
(45,381
)
 
481,266

Operating expenses:
 

 
 

 
 
 
 

 
 

 
 

 
 

Salaries and benefits
132,072

 
62,329

 
7,649

 
1,985

 
51,889

 
—

 
255,924

Depreciation and amortization
1,980

 
10,595

 
6,060

 
—

 
15,298

 
—

 
33,933

Loan servicing fees
—

 
—

 
—

 
25,750

 
—

 
—

 
25,750

Cost to provide communications services
—

 
—

 
6,866

 
—

 
—

 
—

 
6,866

Cost to provide enrollment services
—

 
—

 
—

 
—

 
3,623

 
—

 
3,623

Other expenses
40,715

 
18,486

 
4,370

 
6,005

 
45,843

 
—

 
115,419

Intersegment expenses, net
24,204

 
6,615

 
958

 
46,494

 
(32,889
)
 
(45,381
)
 
—

Total operating expenses
198,971

 
98,025

 
25,903

 
80,234

 
83,764

 
(45,381
)
 
441,515

Income (loss) before income taxes
61,367

 
34,714

 
(9,514
)
 
346,030

 
(33,784
)
 
—

 
398,814

Income tax (expense) benefit
(23,319
)
 
(13,191
)
 
3,615

 
(131,492
)
 
23,074

 
—

 
(141,313
)
Net income (loss)
38,048

 
21,523

 
(5,899
)
 
214,538

 
(10,710
)
 
—

 
257,501

  Net loss (income) attributable to noncontrolling interests
—

 
—

 
—

 
—

 
(750
)
 
—

 
(750
)
Net income (loss) attributable to Nelnet, Inc.
$
38,048

 
21,523

 
(5,899
)
 
214,538

 
(11,460
)
 
—

 
256,751

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of December 31, 2016
$
55,469

 
230,283

 
103,104

 
26,378,467

 
682,459

 
(256,687
)
 
27,193,095



 
Year ended December 31, 2015 (a)
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
49

 
3

 
—

 
728,199

 
7,686

 
(1,828
)
 
734,109

Interest expense
—

 
—

 
—

 
297,625

 
6,413

 
(1,828
)
 
302,210

Net interest income
49

 
3

 
—

 
430,574

 
1,273

 
—

 
431,899

Less provision for loan losses
—

 
—

 
—

 
10,150

 
—

 
—

 
10,150

Net interest income (loss) after provision for loan losses
49

 
3

 
—

 
420,424

 
1,273

 
—

 
421,749

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
239,858

 
—

 
—

 
—

 
—

 
—

 
239,858

Intersegment servicing revenue
50,354

 
—

 
—

 
—

 
—

 
(50,354
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
120,365

 
—

 
—

 
—

 
—

 
120,365

Enrollment services revenue
—

 
—

 
—

 
—

 
51,073

 
—

 
51,073

Other income
—

 
(925
)
 
—

 
15,939

 
32,248

 
—

 
47,262

Gain on sale of loans and debt repurchases, net
—

 
—

 
—

 
2,034

 
3,119

 
—

 
5,153

Derivative settlements, net
—

 
—

 
—

 
(23,238
)
 
(1,012
)
 
—

 
(24,250
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
27,216

 
1,435

 
—

 
28,651

Total other income
290,212

 
119,440

 
—

 
21,951

 
86,863

 
(50,354
)
 
468,112

Operating expenses:
 

 
 

 
 
 
 

 
 

 
 

 
 

Salaries and benefits
134,635

 
55,523

 
—

 
2,172

 
55,585

 
—

 
247,914

Depreciation and amortization
1,931

 
8,992

 
—

 
—

 
15,420

 
—

 
26,343

Loan servicing fees
—

 
—

 
—

 
30,213

 
—

 
—

 
30,213

Cost to provide enrollment services
—

 
—

 
—

 
—

 
41,733

 
—

 
41,733

Other expenses
57,799

 
15,161

 
—

 
5,083

 
44,971

 
—

 
123,014

Intersegment expenses, net
29,706

 
8,617

 
—

 
50,899

 
(38,868
)
 
(50,354
)
 
—

Total operating expenses
224,071

 
88,293

 
—

 
88,367

 
118,841

 
(50,354
)
 
469,217

Income (loss) before income taxes
66,190

 
31,150

 
—

 
354,008

 
(30,705
)
 
—

 
420,644

Income tax (expense) benefit
(25,153
)
 
(11,838
)
 
—

 
(134,522
)
 
19,132

 
—

 
(152,380
)
Net income (loss)
41,037

 
19,312

 
—

 
219,486

 
(11,573
)
 
—

 
268,264

  Net loss (income) attributable to noncontrolling interests
20

 
—

 
—

 
—

 
(305
)
 
—

 
(285
)
Net income (loss) attributable to Nelnet, Inc.
$
41,057

 
19,312

 
—

 
219,486

 
(11,878
)
 
—

 
267,979

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of December 31, 2015
$
80,459

 
229,615

 
68,760

 
29,634,280

 
624,953

 
(218,923
)
 
30,419,144


(a) On December 31, 2015, the Company purchased ALLO. The ALLO assets acquired and liabilities assumed were recorded by the Company at their respective fair values at the date of acquisition. As such, ALLO's assets and liabilities as of December 31, 2015 are included in the Company's consolidated balance sheet. However, ALLO had no impact on the consolidated statement of income during 2015.
Major Customer
Major Customer
Major Customer

The Company earns loan servicing revenue from a servicing contract with the Department that is currently set to expire on June 16, 2019. Revenue earned by the Company's Loan Systems and Servicing operating segment related to this contract was $155.8 million, $151.7 million, and $133.2 million for the years ended December 31, 2017, 2016, and 2015, respectively. In April 2016, the Department's Office of Federal Student Aid announced a new contract procurement process for the Department to acquire a single servicing platform to manage all student loans owned by the Department.

In May 2016, Nelnet Servicing, a subsidiary of the Company, and Great Lakes submitted a joint response to the procurement as part of their GreatNet joint venture created to respond to the contract solicitation process and to provide services under a new contract in the event that the Department selects it for a contract award. On August 1, 2017, the Department canceled the prior procurement process. On February 20, 2018, the Department's Office of Federal Student Aid released information regarding a new contract procurement process. The contract solicitation process is divided into two phases. Responses for Phase One are due on April 6, 2018. The contract solicitation requests responses from interested vendors for nine components. Vendors may provide a response for an individual, multiple, or all components. The Company intends to respond to Phase One of the solicitation.
Leases
Leases
Leases

The Company leases certain office space and equipment under operating leases. As operating leases expire, it is expected that they will be replaced with similar leases. Future minimum lease payments under these leases are shown below:
2018
$
5,277

2019
4,337

2020
3,628

2021
2,002

2022
1,649

2023 and thereafter
4,857

Total minimum lease payments
$
21,750



Total rental expense incurred by the Company for the years ended December 31, 2017, 2016, and 2015 was $5.7 million, $6.0 million, and $5.5 million, respectively.
Defined Contribution Benefit Plan
Defined Contribution Benefit Plan
Defined Contribution Benefit Plan

The Company has a 401(k) savings plan that covers substantially all of its employees. Employees may contribute up to 100 percent of their pre-tax salary, subject to IRS limitations. The Company matches up to 100 percent on the first 3 percent of contributions and 50 percent on the next 2 percent. The Company made contributions to the plan of $6.2 million, $5.1 million, and $4.6 million during the years ended December 31, 2017, 2016, and 2015, respectively.
Stock Based Compensation Plans
Stock Based Compensation Plan
Stock Based Compensation Plans

Restricted Stock Plan

The following table summarizes restricted stock activity:
 
Year ended December 31,
 
2017
 
2016
 
2015
Non-vested shares at beginning of year
447,380

 
471,597

 
499,463

Granted
107,237

 
123,181

 
126,946

Vested
(131,988
)
 
(113,507
)
 
(108,424
)
Canceled
(24,419
)
 
(33,891
)
 
(46,388
)
Non-vested shares at end of year
398,210

 
447,380

 
471,597


As of December 31, 2017, there was $8.1 million of unrecognized compensation cost included in equity on the consolidated balance sheet related to restricted stock, which is expected to be recognized as compensation expense as shown in the table below.
2018
$
3,211

2019
1,960

2020
1,211

2021
731

2022
439

2023 and thereafter
596

 
$
8,148



For the years ended December 31, 2017, 2016, and 2015, the Company recognized compensation expense of $4.2 million, $4.1 million, and $5.2 million, respectively, related to shares issued under the restricted stock plan, which is included in "salaries and benefits" on the consolidated statements of income.

Employee Share Purchase Plan

The Company has an employee share purchase plan pursuant to which employees are entitled to purchase Class A common stock from payroll deductions at a 15 percent discount from market value. During the years ended December 31, 2017, 2016, and 2015, the Company recognized compensation expense of approximately $197,000, $287,000, and $147,000, respectively, in connection with issuing 16,989 shares, 25,551 shares, and 23,912 shares, respectively, under this plan.

Non-employee Directors Compensation Plan

The Company has a compensation plan for non-employee directors pursuant to which non-employee directors can elect to receive their annual retainer fees in the form of cash or Class A common stock. If a non-employee director elects to receive Class A common stock, the number of shares of Class A common stock that are awarded is equal to the amount of the annual retainer fee otherwise payable in cash divided by 85 percent of the fair market value of a share of Class A common stock on the date the fee is payable. Non-employee directors who choose to receive Class A common stock may also elect to defer receipt of the Class A common stock until termination of their service on the board of directors.

For the years ended December 31, 2017, 2016, and 2015, the Company recognized approximately $922,000, $922,000, and $905,000, respectively, of expense related to this plan. The following table provides the number of shares awarded under this plan for the years ended December 31, 2017, 2016, and 2015.

 
Shares issued - not deferred
 
Shares- deferred
 
Total
Year ended December 31, 2017
6,855

 
10,974

 
17,829

Year ended December 31, 2016
10,799

 
13,644

 
24,443

Year ended December 31, 2015
8,164

 
10,406

 
18,570



As of December 31, 2017, a cumulative amount of 171,519 shares have been deferred by directors and will be issued upon the termination of their service on the board of directors. These shares are included in the Company's weighted average shares outstanding calculation.
Related Parties
Related Parties
Related Parties

Transactions with Union Bank and Trust Company

Union Bank and Trust Company ("Union Bank") is controlled by Farmers & Merchants Investment Inc. (“F&M”), which owns a majority of Union Bank's common stock and a minority share of Union Bank's non-voting preferred stock. Michael S. Dunlap, Executive Chairman and a member of the board of directors and a significant shareholder of the Company, along with his spouse and children, owns or controls a significant portion of the stock of F&M, and Mr. Dunlap's sister, Angela L. Muhleisen, along with her spouse and children, also owns or controls a significant portion of F&M stock. Mr. Dunlap serves as a Director and Chairman of F&M. Ms. Muhleisen serves as a Director and Chief Executive Officer of F&M and as a Director, Chairperson, President, and Chief Executive Officer of Union Bank. Union Bank is deemed to have beneficial ownership of a significant number of shares of the Company because it serves in a capacity of trustee or account manager for various trusts and accounts holding shares of the Company, and may share voting and/or investment power with respect to such shares. Mr. Dunlap and Ms. Muhleisen beneficially own a significant percent of the voting rights of the Company's outstanding common stock.

The Company has entered into certain contractual arrangements with Union Bank. These transactions are summarized below.

Loan Purchases

On December 22, 2014, the Company entered into an agreement with Union Bank in which the Company provides marketing, origination, and loan servicing services to Union Bank related to private education loans. The Company committed to purchase, or arrange for a designee to purchase, all volume originated by Union Bank under this agreement. During 2016 and 2015, the Company purchased $29.6 million (par value) and $4.4 million (par value), respectively, of private education loans from Union Bank, pursuant to this agreement. No loans were originated under this agreement in 2017.

In addition to the agreement previously discussed, during 2017, the Company also purchased $2.9 million (par value) of private education loans and $10.3 million (par value) of consumer loans from Union Bank.

Loan Servicing

The Company serviced $462.3 million, $483.8 million, and $563.1 million of FFELP and private education loans for Union Bank as of December 31, 2017, 2016, and 2015, respectively. Servicing revenue earned by the Company from servicing loans for Union Bank was $0.5 million, $0.6 million, and $0.5 million for the years ended December 31, 2017, 2016, and 2015, respectively. As of December 31, 2017 and 2016, accounts receivable includes approximately $42,000 and $36,000, respectively, due from Union Bank for loan servicing.

Funding - Participation Agreement

The Company maintains an agreement with Union Bank, as trustee for various grantor trusts, under which Union Bank has agreed to purchase from the Company participation interests in student loans (the “FFELP Participation Agreement”). The Company uses this facility as a source to fund FFELP student loans. As of December 31, 2017 and 2016, $552.6 million and $496.8 million, respectively, of loans were subject to outstanding participation interests held by Union Bank, as trustee, under this agreement. The agreement automatically renews annually and is terminable by either party upon five business days' notice. This agreement provides beneficiaries of Union Bank's grantor trusts with access to investments in interests in student loans, while providing liquidity to the Company on a short-term basis. The Company can participate loans to Union Bank to the extent of availability under the grantor trusts, up to $750 million or an amount in excess of $750 million if mutually agreed to by both parties. Loans participated under this agreement have been accounted for by the Company as loan sales. Accordingly, the participation interests sold are not included on the Company's consolidated balance sheets.

Operating Cash Accounts

The majority of the Company's cash operating accounts are maintained at Union Bank. The Company also invests amounts in the Short term Federal Investment Trust (“STFIT”) of the Student Loan Trust Division of Union Bank, which are included in “cash and cash equivalents - held at a related party” and “restricted cash - due to customers” on the accompanying consolidated balance sheets. As of December 31, 2017 and 2016, the Company had $115.8 million and $74.3 million, respectively, invested in the STFIT or deposited at Union Bank in operating accounts, of which $56.0 million and $12.5 million as of December 31, 2017 and 2016, respectively, represented cash collected for customers. Interest income earned by the Company on the amounts invested in the STFIT and in cash operating accounts for the years ended December 31, 2017, 2016, and 2015, was $0.9 million, $0.4 million, and $0.2 million, respectively.

529 Plan Administration Services

The Company provides certain 529 Plan administration services to certain college savings plans (the “College Savings Plans”) through a contract with Union Bank, as the program manager. Union Bank is entitled to a fee as program manager pursuant to its program management agreement with the College Savings Plans. For the years ended December 31, 2017, 2016, and 2015, the Company has received fees of $2.0 million, $1.6 million, and $3.5 million, respectively, from Union Bank related to the administration services provided to the College Savings Plans.

Lease Arrangements

Union Bank leases approximately 4,000 square feet in the Company's corporate headquarters building. Union Bank paid the Company approximately $74,000, $73,000, and $73,000 for commercial rent and storage income during 2017, 2016, and 2015, respectively. The lease agreement expires on June 30, 2023.

Other Fees Paid to Union Bank

During the years ended December 31, 2017, 2016, and 2015, the Company paid Union Bank approximately $127,000, $126,000, and $111,000, respectively, in cash management fees. During the years ended December 31, 2016 and 2015, the Company paid Union Bank approximately $13,000 and $47,000, respectively, in commissions. In addition, for the year ended December 31, 2015, the Company paid Union Bank approximately $205,000 in connection with servicing opportunities for various asset classes, and $36,000 for administrative services.

Other Fees Received from Union Bank

During the years ended December 31, 2017, 2016, and 2015, Union Bank paid the Company approximately $219,000, $209,000, and $201,000, respectively, under an employee sharing arrangement, and during the years ended December 31, 2016 and 2015, Union Bank paid the Company approximately $10,000 and $19,000, respectively, for health and productivity services. During the year ended December 31, 2017, Union Bank paid the Company approximately $11,000 in payment processing fees (net of merchant fees of approximately $1,000).

401(k) Plan Administration

Union Bank administers the Company's 401(k) defined contribution plan. Fees paid to Union Bank to administer the plan are paid by the plan participants and were approximately $241,000, $280,000, and $469,000 during the years ended December 31, 2017, 2016, and 2015, respectively.

Investment Services

Union Bank has established various trusts whereby Union Bank serves as trustee for the purpose of purchasing, holding, managing, and selling investments in student loan asset-backed securities. On May 9, 2011, WRCM, an SEC-registered investment advisor and a subsidiary of the Company, entered into a management agreement with Union Bank, effective as of May 1, 2011, under which WRCM performs various advisory and management services on behalf of Union Bank with respect to investments in securities by the trusts, including identifying securities for purchase or sale by the trusts. The agreement provides that Union Bank will pay to WRCM annual fees of 25 basis points on the outstanding balance of the investments in the trusts.  As of December 31, 2017, the outstanding balance of investments in the trusts was $665.9 million. In addition, Union Bank will pay additional fees to WRCM of up to 50 percent of the gains from the sale of securities from the trusts or securities being called prior to the full contractual maturity.  For the years ended December 31, 2017, 2016, and 2015, the Company earned $9.2 million, $4.5 million, and $2.7 million, respectively, of fees under this agreement.

In January 2012 and October 2015, WRCM entered into management agreements with Union Bank under which it was designated to serve as investment advisor with respect to the assets within several trusts established by Mr. Dunlap and his spouse. In January 2016, WRCM entered into a similar management agreement with Union Bank with respect to several trusts established in December 2015 by Stephen F. Butterfield, Vice Chairman and a member of the board of directors of the Company, and his spouse. Union Bank serves as trustee for the trusts. Per the terms of the agreements, Union Bank pays WRCM five basis points of the aggregate value of the assets of the trusts as of the last day of each calendar quarter. Mr. Dunlap and his spouse contributed a total of 3,375,000 and 3,000,000 shares of the Company's Class B common stock to the trusts upon the establishment of the trusts in 2011 and 2015, respectively, and Mr. Butterfield and his spouse contributed a total of 1,200,000 shares of the Company's Class B common stock upon the establishment of the trusts in 2016. For the years ended December 31, 2017, 2016, and 2015, the Company earned approximately $161,000, $142,000, and $71,000, respectively, of fees under these agreements.

As of December 31, 2017 and 2016, accounts receivable included $0.2 million and $0.8 million, respectively, due from Union Bank related to fees earned by WRCM from the investment services described above.

WRCM has established private investment funds for the primary purpose of purchasing, selling, investing, and trading, directly or indirectly, in student loan asset-backed securities, and to engage in financial transactions related thereto. Mr. Dunlap, Union Financial Services, Inc., which is owned 50 percent by each Mr. Dunlap and Mr. Butterfield, Jeffrey R. Noordhoek (an executive officer of the Company), Ms. Muhleisen and her spouse, and WRCM have invested in certain of these funds. Based upon the current level of holdings by non-affiliated limited partners, the management agreements provide non-affiliated limited partners the ability to remove WRCM as manager without cause. WRCM earns 50 basis points (annually) on the outstanding balance of the investments in these funds, of which WRCM pays approximately 50 percent of such amount to Union Bank as custodian.  As of December 31, 2017, the outstanding balance of investments in these funds was $149.4 million. For the years ended December 31, 2017, 2016, and 2015, the Company paid Union Bank $0.3 million, $0.4 million, and $0.4 million, respectively, as custodian.

Transactions with Agile Sports Technologies, Inc. (doing business as "Hudl")

David Graff, who has served on the Company's Board of Directors since May 2014, is CEO, co-founder, and a director of Hudl. On March 17, 2015 and July 7, 2017, the Company made a $40.5 million and $10.4 million preferred stock investment, respectively, in Hudl. Prior to these investments, the Company and Mr. Dunlap made separate equity investments in Hudl. The Company and Mr. Dunlap, along with his children, currently hold combined direct and indirect equity ownership interests in Hudl of 19.7% and 3.4%, respectively. The Company's and Mr. Dunlap's direct and indirect equity ownership interests in Hudl consist of preferred stock with certain liquidation preferences that are considered substantive. Accordingly, for accounting purposes, the Company's and Mr. Dunlap's equity ownership interests are not considered in-substance common stock and the Company is accounting for its equity investment in Hudl under the cost method. The Company's investment in Hudl is included in "investments and notes receivable" in the Company's consolidated balance sheet.

The Company makes investments to further diversify the Company both within and outside of its historical core education-related businesses, including investments in real estate. Recent real estate investments have been focused on the development of commercial properties in the Midwest, and particularly in Lincoln, Nebraska, where the Company's headquarters are located. One investment includes the development of a building in Lincoln's Haymarket District that is the new headquarters of Hudl, in which Hudl is the primary tenant in this building.

Transactions with Assurity Life Insurance Company ("Assurity")

Thomas Henning, who has served on the Company's Board of Directors since 2003, is the President and Chief Executive Officer of Assurity. During the year ended December 31, 2017, Nelnet Business Solutions paid $1.5 million to Assurity for insurance premiums for insurance on certain tuition payment plans. As part of providing the tuition payment plan insurance to Nelnet Business Solutions, Assurity entered into a reinsurance agreement with the Company's insurance subsidiary, under which Assurity paid the Company's insurance subsidiary reinsurance premiums of $1.4 million in 2017, and the Company's insurance subsidiary paid claims on such reinsurance to Assurity of $0.7 million in 2017. In addition, Assurity pays Nelnet Business Solutions a partial refund annually based on claim experience, which was approximately $10,000 for the year ended December 31, 2017.

During the years ended December 31, 2017, 2016, and 2015, the Company made available to its employees certain voluntary insurance products through Assurity. Premiums are paid by participants and are remitted to Assurity by the Company on behalf of the participants. The Company remitted to Assurity approximately $181,000, $166,000, and $116,000 in premiums related to these products during 2017, 2016, and 2015, respectively.
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 year ended December 31, 2017.
 
As of December 31, 2017
 
As of December 31, 2016
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
Investments (available-for-sale and trading): (a)
 
 
 
 
 
 
 
 
 
 
 
Student loan and other asset-backed securities
$
—

 
76,866

 
76,866

 
—

 
103,780

 
103,780

Equity securities
3,928

 
—

 
3,928

 
2,694

 
—

 
2,694

Debt securities
108

 
—

 
108

 
119

 
—

 
119

Total investments (available-for-sale and trading)
4,036

 
76,866

 
80,902

 
2,813

 
103,780

 
106,593

Derivative instruments (b)
—

 
818

 
818

 
—

 
87,531

 
87,531

      Total assets
$
4,036

 
77,684

 
81,720

 
2,813

 
191,311

 
194,124

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Derivative instruments (b):
$
—

 
7,063

 
7,063

 
—

 
77,826

 
77,826

      Total liabilities
$
—

 
7,063

 
7,063

 
—

 
77,826

 
77,826


(a)
Investments represent investments recorded at fair value on a recurring basis. Level 1 investments are measured based upon quoted prices and include investments traded on an active exchange, such as the New York Stock Exchange, and corporate bonds, mortgage-backed securities, U.S. government bonds, and U.S. Treasury securities that trade in active markets. Level 2 investments include student loan asset-backed securities. The fair value for the student loan asset-backed securities is determined using indicative quotes from broker-dealers or an income approach valuation technique (present value using the discount rate adjustment technique) that considers, among other things, rates currently observed in publicly traded debt markets for debt of similar terms issued by companies with comparable credit risk.

(b)
All derivatives are accounted for at fair value on a recurring basis.  The fair value of derivative financial instruments is determined using a market approach in which derivative pricing models use the stated terms of the contracts and observable yield curves, forward foreign currency exchange rates, and volatilities from active markets.  

When determining the fair value of derivatives, the Company takes into account counterparty credit risk for positions where it is exposed to the counterparty on a net basis by assessing exposure net of collateral held. The net exposures for each counterparty are adjusted based on market information available for the specific counterparty.

The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:

 
As of December 31, 2017
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Loans receivable
$
23,106,440

 
21,814,507

 
—

 
—

 
23,106,440

Cash and cash equivalents
66,752

 
66,752

 
66,752

 
—

 
—

Investments (available-for-sale)
80,902

 
80,902

 
4,036

 
76,866

 
—

Notes receivable
16,393

 
16,393

 
—

 
16,393

 
—

Restricted cash
688,193

 
688,193

 
688,193

 
—

 
—

Restricted cash – due to customers
187,121

 
187,121

 
187,121

 
—

 
—

Accrued interest receivable
430,385

 
430,385

 
—

 
430,385

 
—

Derivative instruments
818

 
818

 
—

 
818

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
21,521,463

 
21,356,573

 
—

 
21,521,463

 
—

Accrued interest payable
50,039

 
50,039

 
—

 
50,039

 
—

Due to customers
187,121

 
187,121

 
187,121

 
—

 
—

Derivative instruments
7,063

 
7,063

 
—

 
7,063

 
—


 
As of December 31, 2016
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Loans receivable
$
25,653,581

 
24,903,724

 
—

 
—

 
25,653,581

Cash and cash equivalents
69,654

 
69,654

 
69,654

 
—

 
—

Investments (available-for-sale and trading)
106,593

 
106,593

 
2,813

 
103,780

 
—

Notes receivable
17,031

 
17,031

 
—

 
17,031

 
—

Restricted cash
980,961

 
980,961

 
980,961

 
—

 
—

Restricted cash – due to customers
119,702

 
119,702

 
119,702

 
—

 
—

Accrued interest receivable
391,264

 
391,264

 
—

 
391,264

 
—

Derivative instruments
87,531

 
87,531

 
—

 
87,531

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
24,220,996

 
24,668,490

 
—

 
24,220,996

 
—

Accrued interest payable
45,677

 
45,677

 
—

 
45,677

 
—

Due to customers
119,702

 
119,702

 
119,702

 
—

 
—

Derivative instruments
77,826

 
77,826

 
—

 
77,826

 
—



The methodologies for estimating the fair value of financial assets and liabilities that are measured at fair value on a recurring basis are previously discussed.  The remaining financial assets and liabilities were estimated using the following methods and assumptions:

Loans Receivable

If the Company has the ability and intent to hold loans for the foreseeable future, such loans are held for investment and carried at amortized cost. Fair values for loans receivable were determined by modeling loan cash flows using stated terms of the assets and internally-developed assumptions to determine aggregate portfolio yield, net present value, and average life. The significant assumptions used to project cash flows are prepayment speeds, default rates, cost of funds, required return on equity, and future interest rate and index relationships. A number of significant inputs into the models are internally derived and not observable to market participants.

Notes Receivable

Fair values for notes receivable were determined by using model-derived valuations with observable inputs, including current market rates.

Cash and Cash Equivalents, Restricted Cash, Restricted Cash – Due to Customers, Accrued Interest Receivable/Payable, and Due to Customers

The carrying amount approximates fair value due to the variable rate of interest and/or the short maturities of these instruments.

Bonds and Notes Payable

Bonds and notes payable are accounted for at cost in the financial statements except when denominated in a foreign currency. Foreign currency-denominated borrowings are re-measured at current spot rates in the financial statements. The fair value of bonds and notes payable was determined from quotes from broker-dealers or through standard bond pricing models using the stated terms of the borrowings, observable yield curves, market credit spreads, and weighted average life of underlying collateral. Fair value adjustments for unsecured corporate debt are made based on indicative quotes from observable trades.

Limitations

The fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Therefore, the calculated fair value estimates in many instances cannot be substantiated by comparison to independent markets and, in many cases, may not be realizable in a current sale of the instrument.  Changes in assumptions could significantly affect the estimates.
Quarterly Financial Information (Unaudited)
Quarterly Financial Information (Unaudited)
Quarterly Financial Information (Unaudited)
 
2017
 
First quarter
 
Second quarter
 
Third quarter
 
Fourth quarter
Net interest income
$
76,925

 
79,842

 
75,237

 
73,235

Less provision for loan losses
1,000

 
3,000

 
6,700

 
3,750

Net interest income after provision for loan losses
75,925

 
76,842

 
68,537

 
69,485

Loan systems and servicing revenue
54,229

 
56,899

 
55,950

 
55,921

Tuition payment processing, school information, and campus commerce revenue
43,620

 
34,224

 
35,450

 
32,457

Communications revenue
5,106

 
5,719

 
6,751

 
8,122

Other income
12,632

 
12,485

 
19,756

 
7,952

Gain on sale of loans and debt repurchases, net
4,980

 
442

 
116

 
(2,635
)
Derivative market value and foreign currency transaction adjustments and derivative settlements, net
(4,830
)
 
(27,910
)
 
7,173

 
7,014

Salaries and benefits
(71,863
)
 
(74,628
)
 
(74,193
)
 
(81,201
)
Depreciation and amortization
(8,598
)
 
(9,038
)
 
(10,051
)
 
(11,854
)
Loan servicing fees
(6,025
)
 
(5,628
)
 
(8,017
)
 
(3,064
)
Cost to provide communications services
(1,954
)
 
(2,203
)
 
(2,632
)
 
(3,160
)
Operating expenses
(26,547
)
 
(26,521
)
 
(29,743
)
 
(38,809
)
Income tax (expense) benefit
(28,755
)
 
(16,032
)
 
(25,562
)
 
5,486

Net income
47,920

 
24,651

 
43,535

 
45,714

Net loss (income) attributable to noncontrolling interests
2,106

 
4,086

 
2,768

 
2,386

Net income attributable to Nelnet, Inc.
$
50,026

 
28,737

 
46,303

 
48,100

Earnings per common share:
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
$
1.18

 
0.68

 
1.11

 
1.17

 
2016
 
First quarter
 
Second quarter
 
Third quarter
 
Fourth quarter
Net interest income
$
101,609

 
92,200

 
99,795

 
78,960

Less provision for loan losses
2,500

 
2,000

 
6,000

 
3,000

Net interest income after provision for loan losses
99,109

 
90,200

 
93,795

 
75,960

Loan systems and servicing revenue
52,330

 
54,402

 
54,350

 
53,764

Tuition payment processing, school information, and campus commerce revenue
38,657

 
30,483

 
33,071

 
30,519

Communications revenue
4,346

 
4,478

 
4,343

 
4,492

Enrollment services revenue
4,326

 
—

 
—

 
—

Other income
13,796

 
9,765

 
15,150

 
15,218

Gain on sale of loans and debt repurchases, net
101

 
—

 
2,160

 
5,720

Derivative market value and foreign currency transaction adjustments and derivative settlements, net
(28,691
)
 
(40,702
)
 
36,001

 
83,187

Salaries and benefits
(63,242
)
 
(60,923
)
 
(63,743
)
 
(68,017
)
Depreciation and amortization
(7,640
)
 
(8,183
)
 
(8,994
)
 
(9,116
)
Loan servicing fees
(6,928
)
 
(7,216
)
 
(5,880
)
 
(5,726
)
Cost to provide communications services
(1,703
)
 
(1,681
)
 
(1,784
)
 
(1,697
)
Cost to provide enrollment services
(3,623
)
 
—

 
—

 
—

Operating expenses
(28,376
)
 
(29,409
)
 
(26,391
)
 
(31,245
)
Income tax (expense) benefit
(24,433
)
 
(15,036
)
 
(47,715
)
 
(54,128
)
Net income
48,029

 
26,178

 
84,363

 
98,931

Net loss (income) attributable to noncontrolling interests
(68
)
 
(28
)
 
(69
)
 
(585
)
Net income attributable to Nelnet, Inc.
$
47,961

 
26,150

 
84,294

 
98,346

Earnings per common share:
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
$
1.11

 
0.61

 
1.98

 
2.32

Condensed Parent Company Financial Statements
Condensed Parent Company Financial Statements
Condensed Parent Company Financial Statements

The following represents the condensed balance sheets as of December 31, 2017 and 2016 and condensed statements of income, comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2017 for Nelnet, Inc.

The Company is limited in the amount of funds that can be transferred to it by its subsidiaries through intercompany loans, advances, or cash dividends. These limitations relate to the restrictions by trust indentures under the education lending subsidiaries debt financing arrangements. The amounts of cash and investments restricted in the respective reserve accounts of the education lending subsidiaries are shown on the consolidated balance sheets as restricted cash.
Balance Sheets
(Parent Company Only)
As of December 31, 2017 and 2016
 
2017
 
2016
Assets:
 
 
 
Cash and cash equivalents
$
21,001

 
29,734

Investments and notes receivable
149,236

 
167,711

Investment in subsidiary debt
75,659

 
71,815

Restricted cash
44,149

 
7,805

Investment in subsidiaries
1,681,690

 
1,537,507

Notes receivable from subsidiaries
212,077

 
161,284

Other assets
131,790

 
136,685

Fair value of derivative instruments
818

 
86,379

Total assets
$
2,316,420

 
2,198,920

Liabilities:
 
 
 
Notes payable
$
79,120

 
48,085

Other liabilities
76,638

 
74,706

Fair value of derivative instruments
7,063

 
10,221

Total liabilities
162,821

 
133,012

Equity:
 
 
 
Nelnet, Inc. shareholders' equity:
 
 
 
Common stock
408

 
421

Additional paid-in capital
521

 
420

Retained earnings
2,143,983

 
2,056,084

Accumulated other comprehensive earnings
4,617

 
4,730

Total Nelnet, Inc. shareholders' equity
2,149,529

 
2,061,655

Noncontrolling interest
4,070

 
4,253

Total equity
2,153,599

 
2,065,908

Total liabilities and shareholders' equity
$
2,316,420

 
2,198,920


Statements of Income
(Parent Company Only)
Years ended December 31, 2017, 2016, and 2015
 
2017
 
2016
 
2015
Investment interest income
$
13,060

 
9,794

 
5,776

Interest expense on bonds and notes payable
3,315

 
6,049

 
6,242

Net interest income (expense)
9,745

 
3,745

 
(466
)
Other income:
 

 
 

 
 

Other income
3,483

 
7,037

 
4,012

Gain from debt repurchases, net
2,964

 
8,083

 
4,904

Equity in subsidiaries income
170,897

 
239,405

 
276,825

Derivative market value adjustments and derivative settlements, net
(603
)
 
45,203

 
8,416

Total other income
176,741

 
299,728

 
294,157

Operating expenses
6,117

 
8,183

 
5,057

Income before income taxes
180,369

 
295,290

 
288,634

Income tax expense
7,491

 
38,642

 
20,655

Net income
172,878

 
256,648

 
267,979

Net loss attributable to noncontrolling interest
288

 
103

 
—

Net income attributable to Nelnet, Inc.
$
173,166

 
256,751

 
267,979




Statements of Comprehensive Income
(Parent Company Only)
Years ended December 31, 2017, 2016, and 2015
 
2017
 
2016
 
2015
Net income
$
172,878

 
256,648

 
267,979

Other comprehensive (loss) income:
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
Unrealized holding gains (losses) arising during period, net
2,349

 
5,789

 
(1,570
)
Reclassification adjustment for gains recognized in net income, net of losses
(2,528
)
 
(1,907
)
 
(2,955
)
Income tax effect
66

 
(1,436
)
 
1,674

Total other comprehensive (loss) income
(113
)
 
2,446

 
(2,851
)
Comprehensive income
172,765

 
259,094

 
265,128

Comprehensive loss attributable to noncontrolling interest
288

 
103

 
—

Comprehensive income attributable to Nelnet, Inc.
$
173,053

 
259,197

 
265,128



Statements of Cash Flows
(Parent Company Only)
Years ended December 31, 2017, 2016, and 2015
 
2017
 
2016
 
2015
Net income attributable to Nelnet, Inc.
$
173,166

 
256,751

 
267,979

Net loss attributable to noncontrolling interest
(288
)
 
(103
)
 
—

Net income
172,878

 
256,648

 
267,979

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
420

 
391

 
327

Derivative market value adjustment
7,591

 
(62,268
)
 
(31,411
)
Proceeds from termination of derivative instruments, net of payments
2,100

 
3,999

 
65,527

Payment to enter into derivative instrument
(929
)
 
—

 
—

Proceeds from clearinghouse to settle variation margin, net
48,985

 
—

 
—

Equity in earnings of subsidiaries
(170,897
)
 
(239,405
)
 
(276,825
)
Gain from sales of available-for-sale securities, net of losses
(2,528
)
 
(1,907
)
 
(2,955
)
Gain from debt repurchases, net
(2,964
)
 
(8,083
)
 
(4,904
)
Deferred income tax (benefit) expense
(8,056
)
 
20,071

 
3,228

Non-cash compensation expense
4,416

 
4,348

 
5,347

Other
2,967

 
1,117

 
1,946

Decrease (increase) in other assets
4,171

 
32,262

 
(8,541
)
Increase (decrease) in other liabilities
10,104

 
(594
)
 
6,597

Net cash provided by operating activities
68,258

 
6,579

 
26,315

Cash flows from investing activities:
 
 
 
 
 
(Increase) decrease in restricted cash
(9,004
)
 
6,997

 
(13,825
)
Purchases of available-for-sale securities
(127,567
)
 
(94,920
)
 
(98,332
)
Proceeds from sales of available-for-sale securities
156,727

 
139,427

 
94,722

Capital contributions/distributions to/from subsidiaries, net
29,426

 
223,386

 
120,291

(Increase) decrease in notes receivable from subsidiaries
(50,793
)
 
8,561

 
(84,061
)
Proceeds from investments and notes receivable
4,823

 
9,952

 
12,253

(Purchases of) proceeds from subsidiary debt, net
(3,844
)
 
(13,800
)
 
72,125

Purchases of investments and issuances of notes receivable
(18,023
)
 
(4,365
)
 
(53,388
)
Business acquisition, net of cash acquired
—

 
—

 
(45,916
)
Net cash (used in) provided by investing activities
(18,255
)
 
275,238

 
3,869

Cash flows from financing activities:
 
 
 
 
 
Payments on notes payable
(27,480
)
 
(412,000
)
 
(42,541
)
Proceeds from issuance of notes payable
61,059

 
230,000

 
116,460

Payments of debt issuance costs
—

 
(613
)
 
(773
)
Dividends paid
(24,097
)
 
(21,188
)
 
(19,025
)
Repurchases of common stock
(68,896
)
 
(69,091
)
 
(96,169
)
Proceeds from issuance of common stock
678

 
889

 
801

Issuance of noncontrolling interest
—

 
501

 
—

Distribution to noncontrolling interest
—

 
—

 
(230
)
Net cash used in financing activities
(58,736
)
 
(271,502
)
 
(41,477
)
Net (decrease) increase in cash and cash equivalents
(8,733
)
 
10,315

 
(11,293
)
Cash and cash equivalents, beginning of period
29,734

 
19,419

 
30,712

Cash and cash equivalents, end of period
$
21,001

 
29,734

 
19,419

 
 
 
 
 
 
Cash disbursements made for:
 
 
 
 
 
Interest
$
2,882

 
5,533

 
5,914

Income taxes, net of refunds
$
96,721

 
115,415

 
147,130

 
 
 
 
 
 
Noncash investing and financing activities:
 
 
 
 
 
Issuance of noncontrolling interest
$
—

 
—

 
3,750

Contributions of investments to subsidiaries, net
$
2,092

 
1,884

 
—

Summary of Significant Accounting Policies and Practices Summary of Significant Accounting Policies (Policies)
Consolidation 
Consolidation

The consolidated financial statements include the accounts of Nelnet, Inc. and its consolidated subsidiaries. In addition, the accounts of all variable interest entities (“VIEs”) of which the Company has determined that it is the primary beneficiary are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.
Variable Interest Entities 
Variable Interest Entities

The following entities are VIEs of which the Company has determined that it is the primary beneficiary. The primary beneficiary is the entity which has both: (1) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance, and (2) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.
The Company's education lending subsidiaries are engaged in the securitization of education finance assets. These education lending subsidiaries hold beneficial interests in eligible loans, subject to creditors with specific interests. The liabilities of the Company's education lending subsidiaries are not the direct obligations of Nelnet, Inc. or any of its other subsidiaries. Each education lending subsidiary is structured to be bankruptcy remote, meaning that it should not be consolidated in the event of bankruptcy of the parent company or any other subsidiary. The Company is generally the administrator and master servicer of the securitized assets held in its education lending subsidiaries and owns the residual interest of the securitization trusts. As a result, for accounting purposes, the transfers of student loans to the securitization trusts do not qualify as sales. Accordingly, all the financial activities and related assets and liabilities, including debt, of the securitizations are reflected in the Company's consolidated financial statements and are summarized as supplemental information on the balance sheet.
The Company owns 91.5 percent of the economic rights of ALLO Communications LLC and has a disproportional 80 percent of the voting rights related to all operating decisions for ALLO's business. See note 1, “Description of Business,” for a description of ALLO, including the primary services offered. ALLO's management, as current minority members, has the opportunity to earn an additional 11.5 percent of the total ownership interests based on the financial performance of ALLO. In addition to the Company’s equity investment, Nelnet, Inc. (the parent) has issued a $270.0 million line of credit to ALLO. As of December 31, 2017 and 2016, the outstanding balance, including accrued interest, on the line of credit was $193.1 million and $58.0 million, respectively. Nelnet, Inc.’s maximum exposure to loss as a result of its involvement with ALLO is equal to its equity investment and the outstanding balance and accrued interest on the line of credit. The amounts owed by ALLO to Nelnet, Inc., including the interest costs incurred by ALLO and interest earnings recognized by Nelnet, Inc., are not reflected in the Company’s consolidated balance sheet as they were eliminated in consolidation. All of ALLO’s financial activities and related assets and liabilities, excluding the line of credit, are reflected in the Company’s consolidated financial statements. See note 15, “Segment Reporting,” for disclosure of ALLO’s total assets and results of operations (included in the "Communications" operating segment), note 10, "Goodwill," for disclosure of ALLO's goodwill, and note 11, “Property and Equipment,” for disclosure of ALLO’s fixed assets. ALLO's goodwill and property and equipment comprise the majority of its assets. The assets recognized as a result of consolidating ALLO are the property of ALLO and are not available for any other purpose, other than to Nelnet, Inc. as a secured lender under ALLO's line of credit.
Noncontrolling Interests 
Noncontrolling Interests

Amounts for noncontrolling interests reflect the proportionate share of membership interest (equity) and net income attributable to the holders of minority membership interests in the following entities:
•
Whitetail Rock Capital Management, LLC - WRCM is the Company’s SEC-registered investment advisor subsidiary.  WRCM issued 10 percent minority membership interests on January 1, 2012.

•
ALLO Communications LLC - On December 31, 2015, the Company purchased 92.5 percent of the ownership interests of ALLO. On January 1, 2016, the Company sold a 1.0 percent ownership interest in ALLO to a non-related third-party. The remaining 7.5 percent of the ownership interests of ALLO is owned by ALLO management, who has the opportunity to earn an additional 11.5 percent (up to 19 percent) of the total ownership interests based on the financial performance of ALLO.

•
401 Building, LLC (“401 Building”) - 401 Building is an entity established on October 19, 2015 for the sole purpose of acquiring, developing, and operating a commercial building. The Company owns 50 percent of 401 Building.

•
TDP Phase Three, LLC (“TDP”) and TDP Phase Three-NMTC ("TDP-NMTC") - TDP and TDP-NMTC are entities that were established in October 2015 for the sole purpose of developing and operating the new headquarters of Hudl. The Company owns 25 percent of each TDP and TDP-NMTC.

•
330-333 Building, LLC ("330-333 Building") - 330-333 Building is an entity established on January 14, 2016 for the sole purpose of acquiring, developing, and operating a commercial building. The Company owns 50 percent of 330-333 Building.

The Company is a tenant in the 401 Building, the headquarters of Hudl, and the 330-333 Building. Because the Company, as lessee, was involved in the asset construction, 401 Building, TDP, TDP-NMTC, and 330-333 Building are included in the Company's consolidated financial statements.

•
GreatNet Solutions, LLC ("GreatNet") - GreatNet is a joint venture created to respond to an initiative by the Department for the procurement of a contract for federal student loan servicing.  As of December 31, 2017, Nelnet Servicing, LLC ("Nelnet Servicing"), a subsidiary of the Company, and Great Lakes each owned 50 percent of the ownership interests in GreatNet.  For financial reporting purposes, the balance sheet and operating results of GreatNet are included in the Company's consolidated financial statements and presented in the Company's Loan Systems and Servicing operating segment.  On February 7, 2018, the Company purchased 100 percent of the outstanding stock of Great Lakes.  See note 2, “Recent Developments” for additional information on this business acquisition.

Use of Estimates 

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities, reported amounts of revenues and expenses, and other disclosures. Actual results may differ from those estimates.
Loans Receivable 

Loans Receivable

Loans consist of federally insured student loans, private education loans, and consumer loans. If the Company has the ability and intent to hold loans for the foreseeable future, such loans are held for investment and carried at amortized cost. Amortized cost includes the unamortized premium or discount and capitalized origination costs and fees, all of which are amortized to interest income. Loans which are held-for-investment also have an allowance for loan loss as needed. Any loans the Company has the ability and intent to sell are classified as held for sale and are carried at the lower of cost or fair value. Loans which are held for sale do not have the associated premium or discount and origination costs and fees amortized into interest income and there is also no related allowance for loan losses. There were no loans classified as held for sale as of December 31, 2017 and 2016.

Federally insured loans were originated under the FFEL Program by certain eligible lenders as defined by the Higher Education Act of 1965, as amended (the “Higher Education Act”). These loans, including related accrued interest, are guaranteed at their maximum level permitted under the Higher Education Act by an authorized guaranty agency, which has a contract of reinsurance with the Department. The terms of the loans, which vary on an individual basis, generally provide for repayment in monthly installments of principal and interest. Generally, Stafford and PLUS loans have repayment periods between five and ten years. Consolidation loans have repayment periods of twelve to thirty years. FFELP loans do not require repayment while the borrower is in-school, and during the grace period immediately upon leaving school. The borrower may also be granted a deferment or forbearance for a period of time based on need, during which time the borrower is not considered to be in repayment. Interest continues to accrue on loans in the in-school, deferment, and forbearance program periods. In addition, eligible borrowers may qualify for income-driven repayment plans offered by the Department. These plans determine the borrower's payment amount based on their discretionary income and may extend their repayment period. Interest rates on federally insured student loans may be fixed or variable, dependent upon the type of loan, terms of the loan agreements, and date of origination.

Substantially all FFELP loan principal and related accrued interest is guaranteed as provided by the Higher Education Act. These guarantees are subject to the performance of certain loan servicing due diligence procedures stipulated by applicable Department regulations. If these due diligence requirements are not met, affected student loans may not be covered by the guarantees in the event of borrower default. Such student loans are subject to “cure” procedures and reinstatement of the guarantee under certain circumstances.

Loans also include private education and consumer loans. Private education loans are loans to students or their families that are non-federal loans and loans not insured or guaranteed under the FFEL Program. These loans are used primarily to bridge the gap between the cost of higher education and the amount funded through financial aid, federal loans, or borrowers' personal resources. The terms of the private education loans, which vary on an individual basis, generally provide for repayment in monthly installments of principal and interest over a period of up to 30 years. The private education loans are not covered by a guarantee or collateral in the event of borrower default. Consumer loans are unsecured loans to an individual for personal, family, or household purposes. The terms of the consumer loans, which vary on an individual basis, generally provide for repayment in weekly or monthly installments of principal and interest over a period of up to 6 years.

Allowance for Loan Losses 

Allowance for Loan Losses

The allowance for loan losses represents management's estimate of probable losses on loans. The provision for loan losses reflects the activity for the applicable period and provides an allowance at a level that the Company's management believes is appropriate to cover probable losses inherent in the loan portfolio. The Company evaluates the adequacy of the allowance for loan losses on its federally insured loan portfolio separately from its private education and consumer loan portfolios. These evaluation processes are subject to numerous judgments and uncertainties.

The allowance for the federally insured loan portfolio is based on periodic evaluations of the Company's loan portfolios considering loans in repayment versus those in a nonpaying status, delinquency status, trends in defaults in the portfolio based on Company and industry data, past experience, trends in student loan claims rejected for payment by guarantors, changes to federal student loan programs, current economic conditions, and other relevant factors. The federal government guarantees 97 percent of the principal of and the interest on federally insured student loans disbursed on and after July 1, 2006 (and 98 percent for those loans disbursed on and after October 1, 1993 and prior to July 1, 2006), which limits the Company's loss exposure on the outstanding balance of the Company's federally insured portfolio. Student loans disbursed prior to October 1, 1993 are fully insured.

In determining the appropriate allowance for loan losses on the private education and consumer loans, the Company considers several factors, including: loans in repayment versus those in a nonpaying status, delinquency status, type of program, trends in defaults in the portfolio based on Company and industry data, past experience, current economic conditions, and other relevant factors. The Company places private education and consumer loans on nonaccrual status when the collection of principal and interest is 90 days past due, and charges off the loan when the collection of principal and interest is 120 days past due. Collections, if any, are reflected as a recovery through the allowance for loan losses.

Management has determined that each of the federally insured loan portfolio, private education loan portfolio, and consumer loan portfolio meets the definition of a portfolio segment, which is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses.  Accordingly, the portfolio segment disclosures are presented on this basis in note 4 for each of these portfolios.  The Company does not disaggregate its portfolio segment loan portfolios into classes of financing receivables. The Company collectively evaluates loans for impairment and as of December 31, 2017 and 2016, the Company did not have any impaired loans as defined in the Receivables Topic of the FASB Accounting Standards Codification.

For loans purchased where there is evidence of credit deterioration since the origination of the loan, the Company records a credit discount, separate from the allowance for loan losses, which is non-accretable to interest income. Remaining discounts and premiums for purchased loans are recognized in interest income over the remaining estimated lives of the loans. The Company continues to evaluate credit losses associated with purchased loans based on current information and changes in expectations to determine the need for any additional allowance for loan losses.
Cash and Cash Equivalents and Statement of Cash Flow 

Cash and Cash Equivalents and Statement of Cash Flows

For purposes of the consolidated statements of cash flows, the Company considers all investments with original maturities of three months or less to be cash equivalents.

Accrued interest on loans purchased and sold is included in cash flows from operating activities in the respective period.
Investments 

Investments

The Company's available-for-sale investment portfolio consists of student loan and other asset-backed securities and equity and debt securities. These securities are carried at fair value, with the temporary changes in fair value, net of taxes, carried as a separate component of shareholders’ equity. The amortized cost of debt securities in this category (including the student loan and other asset-backed securities) is adjusted for amortization of premiums and accretion of discounts, which are amortized using the effective interest rate method. Other-than-temporary impairment is evaluated by considering several factors, including the length of time and extent to which the fair value has been less than the amortized cost basis, the financial condition and near-term prospects of the issuer of the security (considering factors such as adverse conditions specific to the security and ratings agency actions), and the intent and ability of the Company to retain the investment to allow for any anticipated recovery in fair value. The entire fair value loss on a security that has experienced an other-than-temporary impairment is recorded in earnings if the Company intends to sell the security or if it is more likely than not that the Company will be required to sell the security before the expected recovery of the loss. However, if the impairment is other-than-temporary, and either of those two conditions does not exist, the portion of the impairment related to credit losses is recorded in earnings and the impairment related to other factors is recorded in other comprehensive income.

Securities classified as trading are accounted for at fair value, with unrealized gains and losses included in "other income" in the consolidated statements of income.

When an investment is sold, the cost basis is determined through specific identification of the security sold.

The Company accounts for investments in which it does not have significant influence or a controlling financial interest using the cost method of accounting.  Cost method investments are recorded at cost.  Cost method investments are evaluated for other-than-temporary impairment in the same manner as described above for available-for-sale investments.

The Company accounts for investments over which it has significant influence but not a controlling financial interest using the equity method of accounting.  Equity method investments are recorded at cost and subsequently increased or decreased by the amount of the Company’s proportionate share of the net earnings or losses and other comprehensive income of the investee.  Equity method investments are evaluated for other-than-temporary impairment using certain impairment indicators such as a series of operating losses of an investee or other factors.  These factors may indicate that a decrease in value of the investment has occurred that is other-than-temporary and shall be recognized.
Restricted Cash 

Restricted Cash

Restricted cash primarily includes amounts for student loan securitizations and other secured borrowings. This cash must be used to make payments related to trust obligations. Amounts on deposit in these accounts are primarily the result of timing differences between when principal and interest is collected on the student loans held as trust assets and when principal and interest is paid on the trust's asset-backed debt securities. Restricted cash also includes collateral deposits with derivative counterparties and third-party clearinghouses.
Restricted Cash - Due to Customers 

Restricted Cash - Due to Customers

As a servicer of student loans, the Company collects student loan remittances and subsequently disburses these remittances to the appropriate lending entities. In addition, as part of the Company's Tuition Payment Processing and Campus Commerce operating segment, the Company collects tuition payments and subsequently remits these payments to the appropriate schools. Cash collected for customers and the related liability are included in the accompanying consolidated balance sheets.
Accounts Receivable 

Accounts Receivable

Accounts receivable are presented at their net realizable values, which include allowances for doubtful accounts. Allowance estimates are based upon individual customer experience, as well as the age of receivables and likelihood of collection.
Business Combinations 

Business Combinations

The Company uses the acquisition method in accounting for acquired businesses. Under the acquisition method, the financial statements reflect the operations of an acquired business starting from the completion of the acquisition. The assets acquired and liabilities assumed are recorded at their respective estimated fair values at the date of acquisition. Any excess of the purchase price over the estimated fair values of the identifiable net assets acquired is recorded as goodwill. All contingent consideration is measured at fair value on the acquisition date and included in the consideration transferred in the acquisition. Contingent consideration classified as a liability is remeasured to fair value at each reporting date until the contingency is resolved, and changes in fair value are recognized in earnings
Goodwill and Intangible Assets 
Goodwill

The Company reviews goodwill for impairment annually (in the fourth quarter) and whenever triggering events or changes in circumstances indicate its carrying value may not be recoverable. Goodwill is tested for impairment using a fair value approach at the reporting unit level. A reporting unit is the operating segment, or a business one level below that operating segment if discrete financial information is prepared and regularly reviewed by segment management. However, components are aggregated as a single reporting unit if they have similar economic characteristics.
The Company tests goodwill for impairment in accordance with applicable accounting guidance. The guidance provides an entity the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not (more than 50%) that the estimated fair value of a reporting unit is less than its carrying amount. If an entity elects to perform a qualitative assessment and determines that an impairment is more likely than not, the entity is then required to perform a quantitative impairment test (described below), otherwise no further analysis is required. An entity also may elect not to perform the qualitative assessment and, instead, proceed directly to the quantitative impairment test.
If the Company elects to not perform a qualitative assessment or if the Company determines it is more likely than not that the fair value of a reporting unit is less than the carrying amount, then the Company performs a quantitative impairment test on goodwill. In the quantitative test, the Company compares the fair value of each reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is considered not impaired and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company would record an impairment loss equal to the difference.
Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates and operating margins used to calculate projected future cash flows, risk-adjusted discount rates, future economic and market conditions, and determination of appropriate market comparables. Actual future results may differ from those estimates.
See note 10 for information regarding the Company's annual goodwill impairment review.
Intangible Assets

Intangible assets with finite lives are amortized over their estimated lives. Such assets are amortized using a method of amortization that reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up. If that pattern cannot be reliably determined, the Company uses a straight-line amortization method.

The Company evaluates the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization.
Property and Equipment 

Property and Equipment

Property and equipment are carried at cost, net of accumulated depreciation. Maintenance and repairs are charged to expense as incurred, and major improvements, including leasehold improvements, are capitalized. Gains and losses from the sale of property and equipment are included in determining net income. The Company uses the straight-line method for recording depreciation and amortization. Leasehold improvements are amortized straight-line over the shorter of the lease term or estimated useful life of the asset
Impairment of Long-Lived Assets 

Impairment of Long‑Lived Assets

The Company reviews its long-lived assets, such as property and equipment and purchased intangibles subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. The Company uses estimates to determine the fair value of long-lived assets. Such estimates are generally based on estimated future cash flows or cost savings associated with particular assets and are discounted to present value using an appropriate discount rate. The estimates of future cash flows associated with assets are generally prepared using a cost savings method, a lost income method, or an excess return method, as appropriate. In utilizing such methods, management must make certain assumptions about the amount and timing of estimated future cash flows and other economic benefits from the assets, the remaining economic useful life of the assets, and general economic factors concerning the selection of an appropriate discount rate. The Company may also use replacement cost or market comparison approaches to estimating fair value if such methods are determined to be more appropriate.

Assumptions and estimates about future values and remaining useful lives of the Company's intangible and other long-lived assets are complex and subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in the Company's business strategy and internal forecasts. Although the Company believes the historical assumptions and estimates used are reasonable and appropriate, different assumptions and estimates could materially impact the reported financial results.
Fair Value Measurements 
Fair Value Measurements

The Company uses estimates of fair value in applying various accounting standards for its financial statements.

Fair value is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Company's policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value, such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates, and credit spreads, relying first on observable data from active markets. Depending on current market conditions, additional adjustments to fair value may be based on factors such as liquidity, credit, and bid/offer spreads. In some cases fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Transaction costs are not included in the determination of fair value. When possible, the Company seeks to validate the model's output to market transactions. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the estimates of current or future values.

The Company categorizes its fair value estimates based on a hierarchical framework associated with three levels of price transparency utilized in measuring assets and liabilities at fair value. Classification is based on the lowest level of input that is significant to the fair value of the instrument. The three levels include:

•
Level 1: Quoted prices for identical instruments in active markets. The types of financial instruments included in Level 1 are highly liquid instruments with quoted prices.

•
Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose primary value drivers are observable.

•
Level 3: Instruments whose primary value drivers are unobservable. Inputs are developed based on the best information available; however, significant judgment is required by management in developing the inputs.

The Company's accounting policy is to recognize transfers between levels of the fair value hierarchy at the end of the reporting period
Revenue Recognition 
Revenue Recognition

The Company recognizes revenue when (i) persuasive evidence of an arrangement exists between the Company and the customer, (ii) delivery of the product to the customer has occurred or service has been provided to the customer, (iii) the price to the customer is fixed or determinable, and (iv) collectability of the sales price is reasonably assured. Additional information related to the Company's revenue recognition of specific items is further provided below.

Loan interest income - Loan interest on federally insured student loans is paid by the Department or the borrower, depending on the status of the loan at the time of the accrual. In addition, the Department makes quarterly interest subsidy payments on certain qualified FFELP loans until the student is required under the provisions of the Higher Education Act to begin repayment. Borrower repayment of FFELP loans normally begins within six months after completion of the borrower's course of study, leaving school, or ceasing to carry at least one-half the normal full-time academic load, as determined by the educational institution. Borrower repayment of PLUS and Consolidation loans normally begins within 60 days from the date of loan disbursement. Borrower repayment of private education loans typically begins six months following the borrower's graduation from a qualified institution, and the interest is either paid by the borrower or capitalized annually or at repayment. Repayment of consumer loans typically starts upon origination of the loan.

The Department provides a special allowance to lenders participating in the FFEL Program. The special allowance is accrued based upon the fiscal quarter average rate of 13-week Treasury Bill auctions (for loans originated prior to January 1, 2000), the fiscal quarter average rate of the daily three-month financial commercial paper rates (for loans originated on and after January 1, 2000) or the fiscal quarter average rate of daily one-month LIBOR rates (for loans originated on and after January 1, 2000, and for lenders which elected to change the special allowance index to one-month LIBOR effective April 1, 2012) relative to the yield of the student loan.

The Company recognizes loan interest income as earned, net of amortization of loan premiums and deferred origination costs and the accretion of loan discounts. Loan interest income is recognized based upon the expected yield of the loan after giving effect to interest rate reductions resulting from borrower utilization of incentives such as timely payments ("borrower benefits") and other yield adjustments. Loan premiums or discounts, deferred origination costs, and borrower benefits are amortized/accreted over the estimated life of the loans, which includes an estimate of forecasted payments in excess of contractually required payments. The Company periodically evaluates the assumptions used to estimate the life of the loans and prepayment rates. In instances where there are changes to the assumptions, amortization/accretion is adjusted on a cumulative basis to reflect the change since the acquisition of the loan.
  
In the third quarter of 2016, the Company revised its policy to correct for an error in its method of applying the interest method used to amortize premiums and deferred origination costs and accrete discounts on its loan portfolio. Previously, the Company amortized premiums and deferred origination costs and accreted discounts by including in its prepayment assumption forecasted payments in excess of contractually required payments as well as forecasted defaults. The Company has determined that only payments in excess of contractually required payments (excluding forecasted defaults) should be included in the prepayment assumption. Under the Company's revised policy, as of September 30, 2016, the constant prepayment rate used by the Company to amortize/accrete loan premiums/discounts was decreased. The constant prepayment rates under the Company's revised policy are 5 percent for Stafford loans and 3 percent for Consolidation loans. The constant prepayment rates under the Company's prior policy in effect before this correction were 6 percent and 4 percent, respectively. During the third quarter of 2016, the Company recorded an adjustment to reflect the cumulative net impact on prior periods for the correction of this error that resulted in an $8.2 million reduction to the Company's net loan discount balance and a corresponding pre-tax increase to interest income. The Company concluded this error had an immaterial impact on 2016 results as well as the results for prior periods.
The Company also pays the Department an annual 105 basis point rebate fee on Consolidation loans. These rebate fees are netted against loan interest income.
Loan systems and servicing revenue – Loan systems and servicing revenue consists of the following items:

•
Loan and guaranty servicing fees – Loan servicing fees are determined according to individual agreements with customers and are calculated based on the dollar value of loans, number of loans, or number of borrowers serviced for each customer. Guaranty servicing fees were generally calculated based on the number of loans serviced, volume of loans serviced, or amounts collected. Revenue is recognized over the period in which services are provided to customers, and when ultimate collection is assured.

•
Software services revenue – Software services revenue is determined from individual agreements with customers and includes license and maintenance fees associated with student loan software products.  Computer and software consulting and remote hosting revenues are recognized over the period in which services are provided to customers.

•
Outsourced services revenue - Outsourced services revenue is determined from individual agreements with customers and generally recognized over the period in which services are provided to customers.

•
Guaranty collections revenue – Guaranty collections revenue was earned when collected. Collection costs paid to third parties associated with this revenue was expensed upon successful collection.

Tuition payment processing, school information, and campus commerce revenue - Tuition payment processing, school information, and campus commerce revenue includes actively managed tuition payment solutions, remote hosted school information systems and learning management software, professional development and educational instruction services, assistance with financial needs assessment and donor management, and payment processing services. Fees for these services are recognized over the period in which services are provided to customers. Cash received in advance of the delivery of services is included in deferred revenue.

Communications revenue - Communications revenue based on a flat fee, derived principally from internet, television, and telephone services are billed in advance and recognized in subsequent periods when the services are provided. Revenues for usage-based services, such as access charges billed to other telephone carriers for originating and terminating long-distance calls on the Company's network, are billed in arrears. The Company recognizes revenue from these services in the period the services are rendered rather than billed. Earned but unbilled usage-based services are recorded in accounts receivable.

Costs to provide communication services is primarily associated with television programming costs.  The Company has various contracts to obtain video programming from programming vendors whose compensation is typically based on a flat fee per customer. The cost of the right to exhibit network programming under such arrangements is recorded in the month the programming is available for exhibition.  Programming costs are paid each month based on calculations performed by the Company and are subject to periodic audits performed by the programmers.  Other costs included in costs to provide communication services include connectivity, franchise, and other regulatory costs directly related to providing internet and voice services.

Enrollment services revenue - Enrollment services revenue was derived from fees which were earned through the delivery of qualified inquiries or clicks. Delivery was deemed to have occurred at the time a qualified inquiry or click was delivered to the customer, provided that no significant obligations remained.

For a portion of this revenue, the Company had agreements with providers of online media or traffic ("inquiry generation vendors") used in the generation of inquiries or clicks. The Company received a fee from its customers and paid a fee to the inquiry generation vendors either on a cost per inquiry, cost per click, or cost per number of impressions basis. The Company was the primary obligor in the transaction. As a result, the fees paid by the Company's customers were recognized as revenue and the fees paid to its inquiry generation vendors are included in "cost to provide enrollment services" in the Company's consolidated statements of income.

On February 1, 2016, the Company sold 100 percent of the membership interests in Sparkroom LLC, which included the Company's inquiry management products and services. After this sale, the Company no longer earns enrollment services revenue.

Other income - Other income consists primarily of the following items:

•
Realized and unrealized gains and losses on investments

•
Borrower late fee income - Late fee income is earned by the education lending subsidiaries and is recognized when payments are collected from the borrower.

•
Investment advisory income - Investment advisory services are provided by the Company through an SEC-registered investment advisor subsidiary under various arrangements. The Company earns annual fees based on the outstanding balance of investments and certain performance measures, which are recognized monthly as earned.

•
Digital marketing and content solutions - The Company earned revenue related to digital marketing and content solution products and services under the brand name Peterson's. These products and services included test preparation study guides, school directories and databases, career exploration guides, on-line courses and test preparation, scholarship search and selection data, career planning information and guides, and on-line information about colleges and universities. Several content solutions services included services to connect students to colleges and universities, and were sold based on subscriptions. Revenue from sales of subscription services was recognized ratably over the term of the contract as it was earned. Subscription revenue received or receivable in advance of the delivery of services was included in deferred revenue. Revenue from the sale of print products was generally earned and recognized, net of estimated returns, upon shipment or delivery. All other digital marketing and content solutions revenue was recognized over the period in which services were provided to customers. On December 31, 2017, the Company sold Peterson's. See note 10 for additional information regarding this sale.

Interest Expense 

Interest Expense

Interest expense is based upon contractual interest rates, adjusted for the amortization of debt issuance costs and the accretion of discounts. The amortization of debt issuance costs and accretion of discounts are recognized using the effective interest method
Transfer of Financial Assets and Extinguishment of Liabilities 

Transfer of Financial Assets and Extinguishments of Liabilities

The Company accounts for loan sales and debt repurchases in accordance with applicable accounting guidance. If a transfer of loans qualifies as a sale, the Company derecognizes the loan and recognizes a gain or loss as the difference between the carrying basis of the loan sold and the consideration received. The Company from time to time repurchases its outstanding debt and records a gain or loss on the early extinguishment of debt based upon the difference between the carrying amount of the debt and the amount paid to the third party. The Company recognizes the results of a transfer of loans and the extinguishment of debt based upon the settlement date of the transaction
Derivative Accounting 

Derivative Accounting

Effective June 10, 2013, all over-the-counter derivative contracts executed by the Company are cleared post-execution at the Chicago Mercantile Exchange (“CME”), a regulated clearinghouse.  Clearing is a process by which a third-party, the clearinghouse, steps in between the original counterparties and guarantees the performance of both, by requiring that each post liquid collateral on an initial (initial margin) and mark-to-market (variation margin) basis to cover the clearinghouse’s potential future exposure in the event of default. 

Prior to January 3, 2017, the Company accounted for variation margin payments to the CME as collateral against its derivative position.  As such, these payments were treated as a separate unit of account from the derivative instrument and reported as a liability for cash collateral received and an asset (restricted cash) for cash collateral paid.  Effective January 3, 2017, the CME amended its rulebooks to legally characterize variation margin payments for over-the-counter derivatives they clear as settlements of the derivatives’ exposure rather than collateral against the exposure.  Based on these rulebook changes, for accounting and presentation purposes, the Company considers variation margin and the corresponding derivative instrument as a single unit of account.  As such, effective January 3, 2017, the variation margin received or paid is no longer accounted for separately as a liability or asset ("collateralized-to-market").  Instead, these payments are considered in determining the fair value of the centrally cleared derivative portfolio ("settled-to-market").  The principal difference for accounting and presentation purposes is that prior to January 3, 2017, the Company recorded the fair value of collateralized-to-market derivative contracts on its balance sheet as "fair value of derivative instruments" with an equal amount of variation margin collateral accounted for separately as an asset or liability. Subsequent to January 3, 2017, the Company records settled-to-market derivative contracts on its balance sheet with a fair value of zero and no collateral posted due to the payment or receipt of variation margin between the Company and the CME settling the outstanding mark-to-market exposure on such derivatives to a balance of zero on a daily basis, and records the underlying daily changes in the market value of such derivative contracts that result in such receipts or payments on its income statement as realized derivative market value adjustments in "Derivative market value and foreign currency transaction adjustments and derivative settlements, net."

The new clearinghouse requirements did not alter or affect the accounting and presentation of the Company’s derivative instruments executed prior to June 10, 2013 and those derivatives that are not required to be cleared at a clearinghouse (non-centrally cleared derivatives). The Company records these derivative instruments in the consolidated balance sheets on a gross basis as either an asset or liability measured at its fair value. Certain non-centrally cleared derivatives are subject to right of offset provisions with counterparties.  For these derivatives, the Company does not offset fair value amounts executed with the same counterparty under a master netting arrangement. In addition, the Company does not offset fair value amounts recognized for derivative instruments with respect to the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable).

The Company determines the fair value for its derivative instruments using either (i) pricing models that consider current market conditions and the contractual terms of the derivative instrument or (ii) counterparty valuations. The factors that impact the fair value of the Company's derivatives include interest rates, time value, forward interest rate curve, and volatility factors, as well as foreign exchange rates. Pricing models and their underlying assumptions impact the amount and timing of realized and unrealized gains and losses recognized, and the use of different pricing models or assumptions could produce different financial results. Management has structured all of the Company's derivative transactions with the intent that each is economically effective; however, the Company's derivative instruments do not qualify for hedge accounting. As a result, the change in fair value of derivative instruments is reported in current period earnings. Changes or shifts in the forward yield curve and fluctuations in currency rates can significantly impact the valuation of the Company’s derivatives, and therefore impact the financial position and results of operations of the Company. Any proceeds received or payments made by the Company to terminate a derivative in advance of its expiration date, or to amend the terms of an existing derivative, are included in the Company's consolidated statements of income and are accounted for as a change in fair value of such derivative. The changes in fair value of derivative instruments, as well as the settlement payments made on such derivatives, are included in “derivative market value and foreign currency adjustments and derivative settlements, net” on the consolidated statements of income
Foreign Currency 

Foreign Currency

During 2006, the Company issued Euro-denominated bonds, which were included in “bonds and notes payable” on the consolidated balance sheets. Transaction gains and losses resulting from exchange rate changes when re-measuring these bonds to U.S. dollars at the balance sheet date were included in “derivative market value and foreign currency adjustments and derivative settlements, net” on the consolidated statements of income.
Income Taxes 

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
 
Income tax expense includes deferred tax expense, which represents the net change in the deferred tax asset or liability balance during the year, plus any change made in the valuation allowance, and current tax expense, which represents the amount of tax currently payable to or receivable from a tax authority plus amounts for expected tax deficiencies
Compensation Expense for Stock Based Awards 

Compensation Expense for Stock Based Awards

The Company has a restricted stock plan that is intended to provide incentives to attract, retain, and motivate employees in order to achieve long term growth and profitability objectives. The restricted stock plan provides for the grant to eligible employees of awards of restricted shares of Class A common stock. The fair value of restricted stock awards is determined on the grant date based on the Company's stock price and is amortized to compensation cost over the related vesting periods, which range up to ten years. For those awards with only service conditions that have graded vesting schedules, the Company recognizes compensation expense on a straight-line basis over the requisite service period for each separately vesting portion of the award, as if the award was, in substance, multiple awards. Holders of restricted stock are entitled to receive dividends from the date of grant whether or not vested.

The Company also has a directors stock compensation plan pursuant to which non-employee directors can elect to receive their annual retainer fees in the form of fully vested shares of Class A common stock, and also elect to defer receipt of such shares until the termination of their service on the board of directors. The fair value of grants under this plan is determined on the grant date based on the Company's stock price, and is expensed over the board member's annual service period.
Stock Repurchases 

Stock Repurchases

In accordance with the corporate laws of the state in which the Company is incorporated, all shares repurchased by the Company are legally retired upon acquisition by the Company.
Loans Receivable and Allowance for Loan Losses (Tables)
Schedule of Accounts, Notes, Loans and Financing Receivable 
Loans receivable consisted of the following:
 
As of December 31,
 
2017
 
2016
Federally insured student loans:
 
 
 
Stafford and other
$
4,418,881

 
5,186,047

Consolidation
17,302,725

 
19,643,937

Total
21,721,606

 
24,829,984

Private education loans
212,160

 
273,659

Consumer loans
62,111

 
—

 
21,995,877

 
25,103,643

Loan discount, net of unamortized loan premiums and deferred origination costs
(113,695
)
 
(129,507
)
Non-accretable discount (a)
(13,085
)
 
(18,570
)
Allowance for loan losses:
 
 
 
Federally insured loans
(38,706
)
 
(37,268
)
Private education loans
(12,629
)
 
(14,574
)
Consumer loans
(3,255
)
 
—

 
$
21,814,507

 
24,903,724


(a)
At December 31, 2017 and 2016, the non-accretable discount related to purchased loan portfolios of $5.8 billion and $8.3 billion, respectively.
Allowance for Credit Losses on Financing Receivables 
The provision for loan losses represents the periodic expense of maintaining an allowance sufficient to absorb losses, net of recoveries, inherent in the portfolio of student loans. Activity in the allowance for loan losses is shown below.
 
Year ended December 31,
 
2017
 
2016
 
2015
Balance at beginning of period
$
51,842

 
50,498

 
48,900

Provision for loan losses:
 
 
 
 
 
Federally insured loans
13,000

 
14,000

 
8,000

Private education loans
(2,000
)
 
(500
)
 
2,150

Consumer loans
3,450

 
—

 
—

Total provision for loan losses
14,450

 
13,500

 
10,150

Charge-offs:
 

 
 

 
 
Federally insured loans
(11,562
)
 
(12,292
)
 
(11,730
)
Private education loans
(1,313
)
 
(1,728
)
 
(2,414
)
Consumer loans
(195
)
 
—

 
—

Total charge-offs
(13,070
)
 
(14,020
)
 
(14,144
)
Recoveries - private education loans
768

 
954

 
1,050

Purchase (sale) of loans, net:
 
 
 
 
 
Federally insured loans
—

 
70

 
50

Private education loans
—

 
480

 
(140
)
Transfer from repurchase obligation related to private education loans repurchased, net (a)
600

 
360

 
4,632

Balance at end of period
$
54,590

 
51,842

 
50,498

 
 
 
 
 
 
Allocation of the allowance for loan losses:
 

 
 

 
 
Federally insured loans
$
38,706

 
37,268

 
35,490

Private education loans
12,629

 
14,574

 
15,008

Consumer loans
3,255

 
—

 
—

Total allowance for loan losses
$
54,590

 
51,842

 
50,498


(a) The Company sold various portfolios of private education loans to third-parties. Per the terms of the servicing agreements, the Company’s servicing operations were obligated to repurchase loans subject to the sale agreements in the event such loans became 60 or 90 days delinquent. As of December 31, 2016, the balance of loans subject to these repurchase obligations was $39.5 million. The Company's estimate related to its obligation to repurchase these loans is included in "other liabilities" in the Company's consolidated balance sheet and was $2.3 million as of December 31, 2016. On November 3, 2017, the loans subject to the repurchase obligations were sold by the owner of the loans to an unrelated third-party and the Company's repurchase obligation was terminated.
Financing Receivable Credit Quality Indicators 
Delinquencies have the potential to adversely impact the Company’s earnings through increased servicing and collection costs and account charge-offs.  The table below shows the Company’s loan delinquency amounts for federally insured and private education loans.
 
As of December 31,
 
2017
 
2016
 
2015
Federally insured loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment (a)
$
1,260,394

 
 
 
$
1,606,468

 
 
 
$
2,292,941

 
 
Loans in forbearance (b)
1,774,405

 
 
 
2,295,367

 
 
 
2,979,357

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
16,477,004

 
88.2
%
 
18,125,768

 
86.6
%
 
19,447,541

 
84.4
%
Loans delinquent 31-60 days (c)
682,586

 
3.7

 
818,976

 
3.9

 
1,028,396

 
4.5

Loans delinquent 61-90 days (c)
374,534

 
2.0

 
487,647

 
2.3

 
566,953

 
2.5

Loans delinquent 91-120 days (c)
287,922

 
1.5

 
335,291

 
1.6

 
415,747

 
1.8

Loans delinquent 121-270 days (c)
629,480

 
3.4

 
854,432

 
4.1

 
1,166,940

 
5.1

Loans delinquent 271 days or greater (c)(d)
235,281

 
1.2

 
306,035

 
1.5

 
390,232

 
1.7

Total loans in repayment
18,686,807

 
100.0
%
 
20,928,149

 
100.0
%
 
23,015,809

 
100.0
%
Total federally insured loans
$
21,721,606

 
 

 
$
24,829,984

 
 

 
$
28,288,107

 
 
Private education loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment (a)
$
6,053

 
 
 
$
35,146

 
 
 
$
30,795

 
 
Loans in forbearance (b)
2,237

 
 
 
3,448

 
 
 
350

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
196,720

 
96.5
%
 
228,612

 
97.2
%
 
228,464

 
96.7
%
Loans delinquent 31-60 days (c)
1,867

 
0.9

 
1,677

 
0.7

 
1,771

 
0.7

Loans delinquent 61-90 days (c)
1,052

 
0.5

 
1,110

 
0.5

 
1,283

 
0.5

Loans delinquent 91 days or greater (c)
4,231

 
2.1

 
3,666

 
1.6

 
4,979

 
2.1

Total loans in repayment
203,870

 
100.0
%
 
235,065

 
100.0
%
 
236,497

 
100.0
%
Total private education loans
$
212,160

 
 

 
$
273,659

 
 

 
$
267,642

 
 

(a)
Loans for borrowers who still may be attending school or engaging in other permitted educational activities and are not yet required to make payments on the loans, e.g., residency periods for medical students or a grace period for bar exam preparation for law students.

(b)
Loans for borrowers who have temporarily ceased making full payments due to hardship or other factors, according to a schedule approved by the servicer consistent with the established loan program servicing procedures and policies.

(c)
The period of delinquency is based on the number of days scheduled payments are contractually past due and relate to repayment loans, that is, receivables not charged off, and not in school, grace, deferment, or forbearance.

(d)
A portion of loans included in loans delinquent 271 days or greater includes loans in claim status, which are loans that have gone into default and have been submitted to the guaranty agency.
Bonds and Notes payable (Tables)
Schedule of Debt 
The following tables summarize the Company’s outstanding debt obligations by type of instrument:
 
 
As of December 31, 2017
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
20,352,045

 
1.47% - 3.37%
 
8/25/21 - 2/25/66
Bonds and notes based on auction
780,829

 
2.09% - 2.69%
 
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes
21,132,874

 
 
 
 
FFELP warehouse facilities
335,992

 
1.55% / 1.56%
 
11/19/19 / 5/31/20
Variable-rate bonds and notes issued in private education loan asset-backed securitization
74,717

 
3.30%
 
12/26/40
 Fixed-rate bonds and notes issued in private education loan asset-backed securitization
82,647

 
3.60% / 5.35%
 
12/26/40 / 12/28/43
Unsecured line of credit
10,000

 
2.98%
 
12/12/21
Unsecured debt - Junior Subordinated Hybrid Securities
20,381

 
5.07%
 
9/15/61
Other borrowings
70,516

 
2.44% - 3.38%
 
1/12/18 - 12/15/45
 
21,727,127

 
 
 
 
Discount on bonds and notes payable and debt issuance costs
(370,554
)
 
 
 
 
Total
$
21,356,573

 
 
 
 
 
 
As of December 31, 2016
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
22,130,063

 
0.24% - 6.90%
 
6/25/21 - 9/25/65
Bonds and notes based on auction
998,415

 
1.61% - 2.28%
 
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes
23,128,478

 
 
 
 
FFELP warehouse facilities
1,677,443

 
0.63% - 1.09%
 
9/7/18 - 12/13/19
Variable-rate bonds and notes issued in private education loan asset-backed securitization
112,582

 
2.60%
 
12/26/40
Fixed-rate bonds and notes issued in private education loan asset-backed securitization
113,378

 
3.60% / 5.35%
 
12/26/40 / 12/28/43
Unsecured line of credit
—

 
—
 
12/12/21
Unsecured debt - Junior Subordinated Hybrid Securities
50,184

 
4.37%
 
9/15/61
Other borrowings
18,355

 
3.38%
 
3/31/23 / 12/15/45
 
25,100,420

 
 
 
 
Discount on bonds and notes payable and debt issuance costs
(431,930
)
 
 
 
 
Total
$
24,668,490

 
 
 
 
Schedule of Line of Credit Facilities 

As of December 31, 2017, the Company had two FFELP warehouse facilities as summarized below.
 
NFSLW-I
 
NHELP-II
 
Total
Maximum financing amount
$
500,000

 
500,000

 
1,000,000

Amount outstanding
189,502

 
146,490

 
335,992

Amount available
$
310,498

 
353,510

 
664,008

Expiration of liquidity provisions
September 20, 2019

 
May 31, 2018
 
 
Final maturity date
November 19, 2019

 
May 31, 2020
 
 
Maximum advance rates
92.0 - 98.0%

 
85.0 - 95.0%

 
 
Minimum advance rates
84.0 - 90.0%

 
85.0 - 95.0%

 
 
Advanced as equity support
$
9,513

 
12,876

 
22,389

Schedule of Asset-backed Securitizations 
The following tables summarize the asset-backed securitization transactions completed in 2017 and 2016.
 
 
Securitizations completed during the year ended December 31, 2017
 
 
NSLT 2017-1
 
NSLT 2017-2
 
NSLT 2017-3
 
 
 
Total
Date securities issued
 
5/24/17
 
7/26/17
 
12/14/17
 
 
 
 
Total original principal amount
 
$
535,000

 
399,390

 
539,400

 
 
 
1,473,790

Bond discount
 
—

 
(2,002
)
 
—

 
 
 
(2,002
)
Issue price
 
$
535,000

 
397,388


539,400

 
 
 
1,471,788

Cost of funds:
 
1-month LIBOR plus 0.78%
 
1-month LIBOR plus 0.77%
 
1-month LIBOR plus 0.85%
 
 
 
 
Final maturity date
 
6/25/65
 
9/25/65
 
2/25/66
 
 
 
 

 
 
Securitizations completed during the year ended December 31, 2016
 
 
FFELP 2016-1
 
Private education loan 2016-A (a)
 
Total
 
 
 
 
Class A-1A notes
 
Class A-1B notes
 
2016-A total
 
 
Date securities issued
 
10/12/16
 
12/21/16
 
12/21/16
 
12/21/16
 
 
Total original principal amount
 
$
426,000

 
112,582

 
91,378

 
225,960

 
$
651,960

 
 
 
 
 
 
 
 
 
 
 
Class A senior notes:
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
$
426,000

 
112,582

 
91,378

 
203,960

 
629,960

Bond discount
 
—

 
—

 
(609
)
 
(609
)
 
(609
)
Issue price
 
$
426,000

 
112,582

 
90,769

 
203,351

 
629,351

Cost of funds:
 
1-month LIBOR plus 0.80%
 
1-month LIBOR plus 1.75%
 
3.60%
 
 
 
 
Final maturity date
 
9/25/65
 
12/26/40
 
12/26/40
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class B subordinated notes:
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
 
 
 
 
 
 
$
22,000

 
22,000

Bond discount
 
 
 
 
 
 
 
(285
)
 
(285
)
Issue price
 
 
 
 
 
 
 
$
21,715

 
21,715

Cost of funds:
 
 
 
 
 
 
 
5.35
%
 
 
Final maturity date
 
 
 
 
 
 
 
12/28/43

 
 

(a)
On June 26, 2015, the Company entered into a $275.0 million private education loan warehouse facility. The Company funded all loans that were included in this warehouse in the Private Education Loan 2016-A securitization and terminated the private education loan warehouse facility on December 21, 2016.

Schedule of TDP Notes Outstanding 
A summary of the TDP notes outstanding as of December 31, 2017 is summarized below:
Issue
date
 
Debt
outstanding
 
Maturity
date
 
Interest
rate
December 30, 2015
 
$
12,000

 
March 31, 2023
 
3.38% - fixed
December 30, 2015
 
6,355

 
December 15, 2045
 
3.38% - fixed
October 31, 2017
 
1,743

 
March 31, 2023
 
1-month LIBOR plus 2.00%
Schedule of Long-term Debt Maturities 
Bonds and notes outstanding as of December 31, 2017 are due in varying amounts as shown below.
2018
 
$
50,418

2019
 
189,502

2020
 
146,490

2021
 
33,410

2022
 
—

2023 and thereafter
 
21,307,307

 
 
$
21,727,127


Schedule of Debt Repurchases 
The following table summarizes the Company's repurchases of its own debt. Gains (losses) recorded by the Company from the repurchase of debt are included in "gain on sale of loans and debt repurchases, net" on the Company’s consolidated statements of income.

 
Par value
 
Purchase price
 
Gain (loss)
 
Par value
 
Purchase price
 
Gain (loss)
 
Par value
 
Purchase price
 
Gain (loss)
 
Year ended December 31,
 
2017
 
2016
 
2015
Unsecured debt - Hybrid Securities
$
29,803

 
25,357

 
4,446

 
7,000

 
4,865

 
2,135

 
14,504

 
11,374

 
3,130

Asset-backed securities
154,407

 
155,951

 
(1,544
)
 
78,412

 
72,566

 
5,846

 
32,026

 
30,354

 
1,672

 
$
184,210

 
181,308

 
2,902

 
85,412

 
77,431

 
7,981

 
46,530

 
41,728

 
4,802



Derivative Financial Instruments (Tables)
Interest Rate Swaps - 1:3 Basis swaps 
The following table summarizes the Company’s 1:3 Basis Swaps outstanding:
 
 
 
 
As of December 31,
 
 
 
2017
 
2016
 
Maturity
 
Notional amount
 
Notional amount
 
2018
 
 
$
4,250,000

 
—

 
2019
 
 
3,500,000

 
—

 
2022
 
 
1,000,000

 
—

 
2024
 
 
250,000

 
—

 
2026
 
 
1,150,000

 
1,150,000

 
2027
 
 
375,000

 
—

 
2028
 
 
325,000

 
325,000

 
2029
 
 
100,000

 
—

 
2031
 
 
300,000

 
300,000

 
 
 
 
$
11,250,000

 
1,775,000

Interest Rate Swaps - Floor Income Hedges 
The following tables summarize the outstanding derivative instruments used by the Company to economically hedge loans earning fixed rate floor income.
 
 
 
As of December 31, 2017
 
As of December 31, 2016
 
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
 
 
 
 
 
2017
 
$
—

 
—
%
 
$
750,000

 
0.99
%
 
2018
 
1,350,000

 
1.07

 
1,350,000

 
1.07

 
2019
 
3,250,000

 
0.97

 
3,250,000

 
0.97

 
2020
 
1,500,000

 
1.01

 
1,500,000

 
1.01

 
2023
 
750,000

 
2.28

 
—

 
—

 
2024
 
300,000

 
2.28

 
—

 
—

 
2025
 
100,000

 
2.32

 
100,000

 
2.32

 
2027
 
50,000

 
2.32

 
—

 
—

 
 
 
$
7,300,000

 
1.21
%
 
$
6,950,000

 
1.02
%
 
(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.
Interest Rate Swaps - Unsecured Debt Hedges 
As of December 31, 2017 and 2016, 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 7.66%.
 
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
2036
 
$
25,000

 
4.28%
(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.
Impact of Foreign Exchange Contracts on the Statement of Income 
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.
 
Year ended December 31,
 
2017
 
2016
 
2015
Re-measurement of Euro Notes
$
(45,600
)
 
11,849

 
43,801

Change in fair value of cross currency interest rate swap
34,208

 
(1,954
)
 
(45,195
)
Total impact to consolidated statements of income - (expense) income (a)
$
(11,392
)
 
9,895

 
(1,394
)

(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.
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value 
The following table summarizes the fair value of the Company’s derivatives as reflected on the consolidated balance sheets.
 
Fair value of asset derivatives
 
Fair value of liability derivatives
 
As of
 
As of
 
As of
 
As of
 
December 31, 2017
 
December 31, 2016
 
December 31, 2017
 
December 31, 2016
1:3 basis swaps
$
—

 
—

 
—

 
2,624

Interest rate swaps - floor income hedges
—

 
81,159

 
—

 
256

Interest rate swap option - floor income hedge
543

 
2,977

 
—

 
—

Interest rate caps
275

 
1,152

 
—

 
—

Interest rate swaps - hybrid debt hedges
—

 
—

 
7,063

 
7,341

Cross-currency interest rate swap
—

 
—

 
—

 
67,605

Other
—

 
2,243

 
—

 
—

Total
$
818

 
87,531

 
7,063

 
77,826

Schedule of Offsetting Derivative Assets/Liabilities 
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 pledged
 
Net asset (liability)
Balance as of December 31, 2017
 
$
818

 
—

 
—

 
818

Balance as of December 31, 2016
 
87,531

 
(2,880
)
 
475

 
85,126


 
 
 
 
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
 
Net asset (liability)
Balance as of December 31, 2017
 
$
(7,063
)
 
—

 
8,520

 
1,457

Balance as of December 31, 2016
 
(77,826
)
 
2,880

 
7,292

 
(67,654
)


Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance 
The following table summarizes the components of "derivative market value and foreign currency transaction adjustments and derivative settlements, net" included in the consolidated statements of income.
 
 
Year ended December 31,
 
 
2017
 
2016
 
2015
Settlements:
 
 

 
 

 
 
1:3 basis swaps
 
$
(3,069
)
 
1,493

 
1,058

Interest rate swaps - floor income hedges
 
10,838

 
(17,643
)
 
(23,041
)
Interest rate swaps - hybrid debt hedges
 
(781
)
 
(915
)
 
(1,012
)
Cross-currency interest rate swap
 
(6,321
)
 
(4,884
)
 
(1,255
)
Total settlements - income (expense)
 
667

 
(21,949
)
 
(24,250
)
Change in fair value:
 
 

 
 

 
 

1:3 basis swaps
 
(8,224
)
 
(2,938
)
 
12,292

Interest rate swaps - floor income hedges
 
3,585

 
64,111

 
20,103

Interest rate swap option - floor income hedge
 
(2,433
)
 
(281
)
 
(2,420
)
Interest rate caps
 
(893
)
 
(419
)
 
(1,365
)
Interest rate swaps - hybrid debt hedges
 
279

 
304

 
(295
)
Cross-currency interest rate swap
 
34,208

 
(1,954
)
 
(45,195
)
Other
 
(143
)
 
1,072

 
1,730

Total change in fair value - income (expense)
 
26,379

 
59,895

 
(15,150
)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
 
(45,600
)
 
11,849

 
43,801

Derivative market value and foreign currency transaction adjustments and derivative settlements, net - income (expense)
 
$
(18,554
)
 
49,795

 
4,401

Investments and Notes Receivables (Tables)
Summary Investment Holdings 
A summary of the Company's investments and notes receivable follows:
 
As of December 31, 2017
 
As of December 31, 2016
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses (a)
 
Fair value
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
 
 
 
 
 
 
 
 
Investments (at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities (b)
$
71,943

 
5,056

 
(25
)
 
76,974

 
98,260

 
6,280

 
(641
)
 
103,899

Equity securities
1,630

 
2,298

 
—

 
3,928

 
720

 
1,930

 
(61
)
 
2,589

Total available-for-sale investments
$
73,573

 
7,354

 
(25
)
 
80,902

 
98,980

 
8,210

 
(702
)
 
106,488

Trading investments - equity securities
 
 
 
 
 
 
—

 
 
 
 
 
 
 
105

Total available-for-sale and trading investments
 
 
 
 
 
 
80,902

 
 
 
 
 
 
 
106,593

Other Investments and Notes Receivable (not measured at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
Venture capital and funds
 
 
 
 
 
 
84,752

 
 
 
 
 
 
 
69,789

Real estate
 
 
 
 
 
 
49,464

 
 
 
 
 
 
 
48,379

Notes receivable
 
 
 
 
 
 
16,393

 
 
 
 
 
 
 
17,031

Tax liens and affordable housing
 
 
 
 
 
 
9,027

 
 
 
 
 
 
 
12,352

Total investments and notes receivable
 
 
 
 
 
 
$
240,538

 
 
 
 
 
 
 
254,144


(a)
As of December 31, 2017, the aggregate fair value of available-for-sale investments with unrealized losses was $12.3 million of which none had been in a continuous unrealized loss position for greater than 12 months. Because the Company currently has the intent and ability to retain these investments for an anticipated recovery in fair value, as of December 31, 2017, 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 December 31, 2017, the stated maturities of substantially all of the Company's student loan asset-backed securities and other debt securities classified as available-for-sale were greater than 10 years.
Gain (Loss) on Investments 
The following table summarizes the amount included in "other income" in the consolidated statements of income related to the Company's investments classified as available-for-sale and trading.
 
 
Year ended December 31,
 
 
2017
 
2016
 
2015
Available-for-sale securities:
 
 
 
 
 
 
Gross realized gains
 
$
3,767

 
3,099

 
3,402

Gross realized losses
 
(1,239
)
 
(1,192
)
 
(447
)
Trading securities:
 
 
 
 
 
 
Unrealized gains (losses), net
 
(14
)
 
525

 
(715
)
Realized gains (losses), net
 
—

 
341

 
(2,097
)
 
 
$
2,514

 
2,773

 
143

Business Combination (Tables)
Schedule of Assets Acquired at Fair Value
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. During the first quarter of 2016, the Company recognized certain adjustments to the provisional amounts recorded at December 31, 2015 that were needed to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The net impact of these adjustments was an increase to goodwill, and the adjustments had no impact on operating results.
Cash and cash equivalents
 
$
334

Restricted cash
 
850

Accounts receivable
 
1,935

Property and equipment
 
32,479

Other assets
 
371

Intangible assets
 
11,410

Excess cost over fair value of net assets acquired (goodwill)
 
21,112

Other liabilities
 
(4,587
)
Bonds and notes payable
 
(13,904
)
Net assets acquired
 
50,000

Minority interest
 
(3,750
)
Total consideration paid by the Company
 
$
46,250

The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:

 
As of December 31, 2017
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Loans receivable
$
23,106,440

 
21,814,507

 
—

 
—

 
23,106,440

Cash and cash equivalents
66,752

 
66,752

 
66,752

 
—

 
—

Investments (available-for-sale)
80,902

 
80,902

 
4,036

 
76,866

 
—

Notes receivable
16,393

 
16,393

 
—

 
16,393

 
—

Restricted cash
688,193

 
688,193

 
688,193

 
—

 
—

Restricted cash – due to customers
187,121

 
187,121

 
187,121

 
—

 
—

Accrued interest receivable
430,385

 
430,385

 
—

 
430,385

 
—

Derivative instruments
818

 
818

 
—

 
818

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
21,521,463

 
21,356,573

 
—

 
21,521,463

 
—

Accrued interest payable
50,039

 
50,039

 
—

 
50,039

 
—

Due to customers
187,121

 
187,121

 
187,121

 
—

 
—

Derivative instruments
7,063

 
7,063

 
—

 
7,063

 
—


 
As of December 31, 2016
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Loans receivable
$
25,653,581

 
24,903,724

 
—

 
—

 
25,653,581

Cash and cash equivalents
69,654

 
69,654

 
69,654

 
—

 
—

Investments (available-for-sale and trading)
106,593

 
106,593

 
2,813

 
103,780

 
—

Notes receivable
17,031

 
17,031

 
—

 
17,031

 
—

Restricted cash
980,961

 
980,961

 
980,961

 
—

 
—

Restricted cash – due to customers
119,702

 
119,702

 
119,702

 
—

 
—

Accrued interest receivable
391,264

 
391,264

 
—

 
391,264

 
—

Derivative instruments
87,531

 
87,531

 
—

 
87,531

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
24,220,996

 
24,668,490

 
—

 
24,220,996

 
—

Accrued interest payable
45,677

 
45,677

 
—

 
45,677

 
—

Due to customers
119,702

 
119,702

 
119,702

 
—

 
—

Derivative instruments
77,826

 
77,826

 
—

 
77,826

 
—

Intangible Assets (Tables)
Schedule of Intangible Assets 
Intangible assets consist of the following:
 
Weighted average remaining useful life as of December 31, 2017 (months)
 
As of December 31, 2017
 
As of December 31, 2016
 
 
 
Amortizable intangible assets, net:
 
 
 
 
 
Customer relationships (net of accumulated amortization of $12,715 and $8,548, respectively)
160
 
$
24,168

 
28,335

Trade names (net of accumulated amortization of $2,498 and $1,653, respectively)
89
 
9,074

 
9,919

Computer software (net of accumulated amortization of $10,013 and $5,675, respectively)
14
 
4,958

 
9,296

Covenants not to compete (net of accumulated amortization of $127 and $91, respectively)
77
 
227

 
263

Total - amortizable intangible assets, net
124
 
$
38,427

 
47,813

Schedule of Intangible Assets Future Amortization Expense 
As of December 31, 2017, the Company estimates it will record amortization expense as follows:
2018
$
10,428

2019
6,990

2020
3,789

2021
3,077

2022
2,474

2023 and thereafter
11,669

 
$
38,427

Goodwill (Tables)
Schedule of Goodwill
The change in the carrying amount of goodwill by reportable operating segment was as follows:
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset Generation and Management (a)
 
Corporate and Other Activities
 
Total
Balance as of December 31, 2015
$
8,596

 
67,168

 
19,800

 
41,883

 
8,553

 
146,000

ALLO purchase price adjustment
—

 
—

 
1,312

 
—

 
—

 
1,312

Balance as of December 31, 2016
8,596

 
67,168

 
21,112

 
41,883

 
8,553

 
147,312

Impairment expense
—

 
—

 
—

 
—

 
(3,626
)
 
(3,626
)
Sale of Peterson's
—

 
—

 
—

 
—

 
(4,927
)
 
(4,927
)
Balance as of December 31, 2017
$
8,596

 
67,168

 
21,112

 
41,883

 
—

 
138,759


(a)
As a result of the Reconciliation Act of 2010, the Company no longer originates new FFELP loans, and net interest income from the Company's existing FFELP loan portfolio will decline over time as the Company's portfolio pays down. As a result, as this revenue stream winds down, goodwill impairment will be triggered for the Asset Generation and Management reporting unit due to the passage of time and depletion of projected cash flows stemming from its FFELP student loan portfolio. Management believes the elimination of new FFELP loan originations will not have an adverse impact on the fair value of the Company's other reporting units.
Property and Equipment (Tables)
Schedule of Property and Equipment
Property and equipment consisted of the following:
 
 
 
As of December 31,
 
Useful life
 
2017
 
2016
Non-communications:
 
 
 
 
 
Computer equipment and software
1-5 years
 
$
124,708

 
97,317

Building and building improvements
5-39 years
 
24,003

 
13,363

Office furniture and equipment
3-7 years
 
15,210

 
12,344

Leasehold improvements
5-15 years
 
7,759

 
3,579

Transportation equipment
4-10 years
 
3,813

 
3,809

Land
—
 
2,628

 
1,682

Construction in progress
—
 
4,127

 
16,346

 
 
 
182,248

 
148,440

Accumulated depreciation - non-communications
 
 
105,017

 
91,285

Non-communications, net property and equipment
 
 
77,231

 
57,155

 
 
 
 
 
 
Communications:
 
 
 
 
 
Network plant and fiber
5-15 years
 
138,122

 
40,844

Customer located property
5-10 years
 
13,767

 
5,138

Central office
5-15 years
 
10,754

 
6,448

Transportation equipment
4-10 years
 
5,759

 
2,966

Computer equipment and software
1-5 years
 
3,790

 
2,026

Other
1-39 years
 
2,516

 
1,268

Land
—
 
70

 
70

Construction in progress
—
 
11,620

 
12,537

 
 
 
186,398

 
71,297

Accumulated depreciation - communications
 
 
15,578

 
4,666

Communications, net property and equipment
 
 
170,820

 
66,631

Total property and equipment, net
 
 
$
248,051

 
123,786

Shareholders' Equity (Tables)
Schedule of Stock Repurchases
Shares repurchased by the Company during 2017, 2016, and 2015 are shown in the table below.
 
 
Total shares repurchased
 
Purchase price (in thousands)
 
Average price of shares repurchased (per share)
Year ended December 31, 2017
 
1,473,054

 
$
68,896

 
$
46.77

Year ended December 31, 2016
 
2,038,368

 
69,091

 
33.90

Year ended December 31, 2015
 
2,449,159

 
96,169

 
39.27

Earnings per Common Share (Tables)
Schedule of Earnings Per Share
Unvested share-based awards that contain nonforfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock.
 
Year ended December 31,
 
2017
 
2016
 
2015
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
171,442

 
1,724

 
173,166

 
254,063

 
2,688

 
256,751

 
265,129

 
2,850

 
267,979

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
41,375,964

 
415,977

 
41,791,941

 
42,222,335

 
446,735

 
42,669,070

 
45,045,199

 
484,141

 
45,529,340

Earnings per share - basic and diluted
$
4.14

 
4.14

 
4.14

 
6.02

 
6.02

 
6.02

 
5.89

 
5.89

 
5.89

Income Taxes (Tables)
Schedule of Unrecognized Tax Benefits 
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits follows:
 
Year ended December 31,
 
2017
 
2016
Gross balance - beginning of year
$
28,004

 
27,688

Additions based on tax positions of prior years
145

 
904

Additions based on tax positions related to the current year
2,903

 
4,347

Settlements with taxing authorities
—

 
—

Reductions for tax positions of prior years
(356
)
 
(3,088
)
Reductions based on tax positions related to the current year
—

 
—

Reductions due to lapse of applicable statutes of limitations
(2,275
)
 
(1,847
)
Gross balance - end of year
$
28,421

 
28,004

Schedule of Provision for Income Tax Expense (Benefit) 
The provision for income taxes consists of the following components:
 
Year ended December 31,
 
2017
 
2016
 
2015
Current:
 
 
 
 
 
Federal
$
65,196

 
111,302

 
140,778

State
1,246

 
3,019

 
4,530

Foreign
(35
)
 
(13
)
 
23

Total current provision
66,407

 
114,308

 
145,331

 
 
 
 
 
 
Deferred:
 
 
 
 
 
Federal
(8,270
)
 
25,423

 
3,572

State
6,618

 
1,976

 
3,875

Foreign
108

 
(394
)
 
(398
)
Total deferred provision
(1,544
)
 
27,005

 
7,049

Provision for income tax expense
$
64,863

 
141,313

 
152,380

Schedule of Effective Income Tax Rate Reconciliation 
The differences between the income tax provision computed at the statutory federal corporate tax rate and the financial statement provision for income taxes are shown below:
 
Year ended December 31,
 
2017
 
2016
 
2015
Tax expense at federal rate
35.0
  %
 
35.0
  %
 
35.0
  %
Increase (decrease) resulting from:
 
 
 
 
 
Reduction of statutory federal rate (a)
(8.0
)
 
—

 
—

State tax, net of federal income tax benefit
1.6
 
 
1.1
 
 
1.0
 
Provision for uncertain federal and state tax matters
—

 
—

 
0.9
 
Tax credits
(1.3
)
 
(0.6
)
 
(0.5
)
Other
—

 
—

 
(0.1
)
Effective tax rate
27.3
  %
 
35.5
  %
 
36.3
  %


(a)
The Tax Cuts and Jobs Act (the “Tax Act”), signed into law on December 22, 2017, changes existing United States tax law and includes numerous provisions that affect businesses, including the Company.  The Tax Act, for instance, introduces changes that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits.

The Company accounted for the change in tax laws in accordance with ASC Topic 740 that provides guidance that a change in tax law or rates be recognized in the financial reporting period that includes the enactment date, which is the date the changes were signed into law.  The income tax accounting effect of a change in tax laws or tax rates includes, for example, adjusting (or re-measuring) deferred tax liabilities and deferred tax assets, as well as evaluating whether a valuation allowance is needed for deferred tax assets.  The Company re-measured its deferred tax liabilities and deferred tax assets as of December 22, 2017 resulting in a decrease to income tax expense of $19.3 million.  The Company determined no valuation allowance was needed for any deferred tax assets as a result of the Act.

In December 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118 (SAB 118), which provides guidance regarding how a company is to reflect provisional amounts when necessary information is not yet available, prepared, or analyzed sufficiently to complete its accounting for the effect of the changes in the Tax Act. The income tax benefit of $19.3 million recorded during the year ended December 31, 2017 represents all known and estimable impacts of the Tax Act and is a provisional amount based on the Company’s current best estimate. This provisional amount incorporates assumptions made based upon the Company’s current interpretations of the Tax Act and may change as the Company receives additional clarification and implementation guidance, and as data becomes available allowing for a more accurate scheduling of the deferred tax assets and liabilities, including those related to items potentially impacted by the Tax Act such as accruals in 2017 related to payments not occurring until later in 2018, partnership basis, and tax implications of the Tax Act at state and local jurisdictions. Adjustments to this provisional amount through December 22, 2018 will be included in income from operations as an adjustment to tax expense in future periods.
Schedule of Deferred Tax Assets and Liabilities 
The tax effect of temporary differences that give rise to deferred tax assets and liabilities include the following:
 
As of December 31,
 
2017
 
2016
Deferred tax assets:
 
 
 
Student loans
$
13,532

 
20,980

Deferred revenue
3,246

 
2,699

Securitizations
2,970

 
5,675

Intangible assets
2,899

 
4,821

Accrued expenses
2,246

 
3,533

Stock compensation
1,744

 
2,948

Total gross deferred tax assets
26,637

 
40,656

Less valuation allowance
(254
)
 
(264
)
Net deferred tax assets
26,383

 
40,392

Deferred tax liabilities:
 
 
 
Basis in certain derivative contracts
23,051

 
46,636

Partnership basis
21,474

 
4,976

Loan origination services
8,001

 
13,019

Depreciation
4,958

 
5,128

Debt repurchases
3,856

 
12,457

Debt and equity investments
1,767

 
3,246

Other
823

 
360

Total gross deferred tax liabilities
63,930

 
85,822

Net deferred tax liability
$
(37,547
)
 
(45,430
)
Segment Reporting (Tables)
Schedule of Segment Reporting Information, by Segment
The following tables include the results of each of the Company's reportable operating segments reconciled to the consolidated financial statements.
 
Year ended December 31, 2017
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
513

 
17

 
3

 
764,225

 
13,643

 
(7,976
)
 
770,426

Interest expense
3

 
—

 
5,427

 
464,256

 
3,477

 
(7,976
)
 
465,188

Net interest income
510

 
17

 
(5,424
)
 
299,969

 
10,166

 
—

 
305,238

Less provision for loan losses
—

 
—

 
—

 
14,450

 
—

 
—

 
14,450

Net interest income (loss) after provision for loan losses
510

 
17

 
(5,424
)
 
285,519

 
10,166

 
—

 
290,788

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
223,000

 
—

 
—

 
—

 
—

 
—

 
223,000

Intersegment servicing revenue
41,674

 
—

 
—

 
—

 
—

 
(41,674
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
145,751

 
—

 
—

 
—

 
—

 
145,751

Communications revenue
—

 
—

 
25,700

 
—

 
—

 
—

 
25,700

Other income
—

 
—

 
—

 
13,424

 
39,402

 
—

 
52,826

Gain on sale of loans and debt repurchases, net
—

 
—

 
—

 
(1,567
)
 
4,469

 
—

 
2,902

Derivative settlements, net
—

 
—

 
—

 
1,448

 
(781
)
 
—

 
667

Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
(19,357
)
 
136

 
—

 
(19,221
)
Total other income
264,674

 
145,751

 
25,700

 
(6,052
)
 
43,226

 
(41,674
)
 
431,625

Operating expenses:
 

 
 

 
 
 
 

 
 

 
 

 
 

Salaries and benefits
156,256

 
69,500

 
14,947

 
1,548

 
59,633

 
—

 
301,885

Depreciation and amortization
2,864

 
9,424

 
11,835

 
—

 
15,418

 
—

 
39,541

Loan servicing fees
—

 
—

 
—

 
22,734

 
—

 
—

 
22,734

Cost to provide communications services
—

 
—

 
9,950

 
—

 
—

 
—

 
9,950

Other expenses
39,126

 
19,138

 
8,074

 
3,900

 
51,381

 
—

 
121,619

Intersegment expenses, net
31,871

 
9,079

 
2,101

 
42,830

 
(44,208
)
 
(41,674
)
 
—

Total operating expenses
230,117

 
107,141

 
46,907

 
71,012

 
82,224

 
(41,674
)
 
495,729

Income (loss) before income taxes
35,067

 
38,627

 
(26,631
)
 
208,455

 
(28,832
)
 
—

 
226,684

Income tax (expense) benefit
(18,128
)
 
(14,678
)
 
10,120

 
(79,213
)
 
37,036

 
—

 
(64,863
)
Net income (loss)
16,939

 
23,949

 
(16,511
)
 
129,242

 
8,204

 
—

 
161,821

  Net loss (income) attributable to noncontrolling interests
12,640

 
—

 
—

 
—

 
(1,295
)
 
—

 
11,345

Net income (loss) attributable to Nelnet, Inc.
$
29,579

 
23,949

 
(16,511
)
 
129,242

 
6,909

 
—

 
173,166

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of December 31, 2017
$
122,330

 
250,351

 
214,336

 
22,910,974

 
877,859

 
(411,415
)
 
23,964,435


 
Year ended December 31, 2016
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
111

 
9

 
1

 
754,788

 
10,913

 
(5,076
)
 
760,746

Interest expense
—

 
—

 
1,271

 
385,913

 
6,076

 
(5,076
)
 
388,183

Net interest income
111

 
9

 
(1,270
)
 
368,875

 
4,837

 
—

 
372,563

Less provision for loan losses
—

 
—

 
—

 
13,500

 
—

 
—

 
13,500

Net interest income (loss) after provision for loan losses
111

 
9

 
(1,270
)
 
355,375

 
4,837

 
—

 
359,063

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
214,846

 
—

 
—

 
—

 
—

 
—

 
214,846

Intersegment servicing revenue
45,381

 
—

 
—

 
—

 
—

 
(45,381
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
132,730

 
—

 
—

 
—

 
—

 
132,730

Communications revenue
—

 
—

 
17,659

 
—

 
—

 
—

 
17,659

Enrollment services revenue
—

 
—

 
—

 
—

 
4,326

 
—

 
4,326

Other income
—

 
—

 
—

 
15,709

 
38,221

 
—

 
53,929

Gain on sale of loans and debt repurchases, net
—

 
—

 
—

 
5,846

 
2,135

 
—

 
7,981

Derivative settlements, net
—

 
—

 
—

 
(21,034
)
 
(915
)
 
—

 
(21,949
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
70,368

 
1,376

 
—

 
71,744

Total other income
260,227

 
132,730

 
17,659

 
70,889

 
45,143

 
(45,381
)
 
481,266

Operating expenses:
 

 
 

 
 
 
 

 
 

 
 

 
 

Salaries and benefits
132,072

 
62,329

 
7,649

 
1,985

 
51,889

 
—

 
255,924

Depreciation and amortization
1,980

 
10,595

 
6,060

 
—

 
15,298

 
—

 
33,933

Loan servicing fees
—

 
—

 
—

 
25,750

 
—

 
—

 
25,750

Cost to provide communications services
—

 
—

 
6,866

 
—

 
—

 
—

 
6,866

Cost to provide enrollment services
—

 
—

 
—

 
—

 
3,623

 
—

 
3,623

Other expenses
40,715

 
18,486

 
4,370

 
6,005

 
45,843

 
—

 
115,419

Intersegment expenses, net
24,204

 
6,615

 
958

 
46,494

 
(32,889
)
 
(45,381
)
 
—

Total operating expenses
198,971

 
98,025

 
25,903

 
80,234

 
83,764

 
(45,381
)
 
441,515

Income (loss) before income taxes
61,367

 
34,714

 
(9,514
)
 
346,030

 
(33,784
)
 
—

 
398,814

Income tax (expense) benefit
(23,319
)
 
(13,191
)
 
3,615

 
(131,492
)
 
23,074

 
—

 
(141,313
)
Net income (loss)
38,048

 
21,523

 
(5,899
)
 
214,538

 
(10,710
)
 
—

 
257,501

  Net loss (income) attributable to noncontrolling interests
—

 
—

 
—

 
—

 
(750
)
 
—

 
(750
)
Net income (loss) attributable to Nelnet, Inc.
$
38,048

 
21,523

 
(5,899
)
 
214,538

 
(11,460
)
 
—

 
256,751

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of December 31, 2016
$
55,469

 
230,283

 
103,104

 
26,378,467

 
682,459

 
(256,687
)
 
27,193,095



 
Year ended December 31, 2015 (a)
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
49

 
3

 
—

 
728,199

 
7,686

 
(1,828
)
 
734,109

Interest expense
—

 
—

 
—

 
297,625

 
6,413

 
(1,828
)
 
302,210

Net interest income
49

 
3

 
—

 
430,574

 
1,273

 
—

 
431,899

Less provision for loan losses
—

 
—

 
—

 
10,150

 
—

 
—

 
10,150

Net interest income (loss) after provision for loan losses
49

 
3

 
—

 
420,424

 
1,273

 
—

 
421,749

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
239,858

 
—

 
—

 
—

 
—

 
—

 
239,858

Intersegment servicing revenue
50,354

 
—

 
—

 
—

 
—

 
(50,354
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
120,365

 
—

 
—

 
—

 
—

 
120,365

Enrollment services revenue
—

 
—

 
—

 
—

 
51,073

 
—

 
51,073

Other income
—

 
(925
)
 
—

 
15,939

 
32,248

 
—

 
47,262

Gain on sale of loans and debt repurchases, net
—

 
—

 
—

 
2,034

 
3,119

 
—

 
5,153

Derivative settlements, net
—

 
—

 
—

 
(23,238
)
 
(1,012
)
 
—

 
(24,250
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
27,216

 
1,435

 
—

 
28,651

Total other income
290,212

 
119,440

 
—

 
21,951

 
86,863

 
(50,354
)
 
468,112

Operating expenses:
 

 
 

 
 
 
 

 
 

 
 

 
 

Salaries and benefits
134,635

 
55,523

 
—

 
2,172

 
55,585

 
—

 
247,914

Depreciation and amortization
1,931

 
8,992

 
—

 
—

 
15,420

 
—

 
26,343

Loan servicing fees
—

 
—

 
—

 
30,213

 
—

 
—

 
30,213

Cost to provide enrollment services
—

 
—

 
—

 
—

 
41,733

 
—

 
41,733

Other expenses
57,799

 
15,161

 
—

 
5,083

 
44,971

 
—

 
123,014

Intersegment expenses, net
29,706

 
8,617

 
—

 
50,899

 
(38,868
)
 
(50,354
)
 
—

Total operating expenses
224,071

 
88,293

 
—

 
88,367

 
118,841

 
(50,354
)
 
469,217

Income (loss) before income taxes
66,190

 
31,150

 
—

 
354,008

 
(30,705
)
 
—

 
420,644

Income tax (expense) benefit
(25,153
)
 
(11,838
)
 
—

 
(134,522
)
 
19,132

 
—

 
(152,380
)
Net income (loss)
41,037

 
19,312

 
—

 
219,486

 
(11,573
)
 
—

 
268,264

  Net loss (income) attributable to noncontrolling interests
20

 
—

 
—

 
—

 
(305
)
 
—

 
(285
)
Net income (loss) attributable to Nelnet, Inc.
$
41,057

 
19,312

 
—

 
219,486

 
(11,878
)
 
—

 
267,979

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of December 31, 2015
$
80,459

 
229,615

 
68,760

 
29,634,280

 
624,953

 
(218,923
)
 
30,419,144


(a) On December 31, 2015, the Company purchased ALLO. The ALLO assets acquired and liabilities assumed were recorded by the Company at their respective fair values at the date of acquisition. As such, ALLO's assets and liabilities as of December 31, 2015 are included in the Company's consolidated balance sheet. However, ALLO had no impact on the consolidated statement of income during 2015.
Leases (Tables)
Schedule of future minimum lease payments for operating leases
Future minimum lease payments under these leases are shown below:
2018
$
5,277

2019
4,337

2020
3,628

2021
2,002

2022
1,649

2023 and thereafter
4,857

Total minimum lease payments
$
21,750

Stock Based Compensation Plans (Tables)
Schedule of Restricted Stock Activity 
The following table summarizes restricted stock activity:
 
Year ended December 31,
 
2017
 
2016
 
2015
Non-vested shares at beginning of year
447,380

 
471,597

 
499,463

Granted
107,237

 
123,181

 
126,946

Vested
(131,988
)
 
(113,507
)
 
(108,424
)
Canceled
(24,419
)
 
(33,891
)
 
(46,388
)
Non-vested shares at end of year
398,210

 
447,380

 
471,597

Schedule of Unrecognized Compensation Costs 
As of December 31, 2017, there was $8.1 million of unrecognized compensation cost included in equity on the consolidated balance sheet related to restricted stock, which is expected to be recognized as compensation expense as shown in the table below.
2018
$
3,211

2019
1,960

2020
1,211

2021
731

2022
439

2023 and thereafter
596

 
$
8,148

Schedule of Non-employee Directors Compensation Plan 
The following table provides the number of shares awarded under this plan for the years ended December 31, 2017, 2016, and 2015.

 
Shares issued - not deferred
 
Shares- deferred
 
Total
Year ended December 31, 2017
6,855

 
10,974

 
17,829

Year ended December 31, 2016
10,799

 
13,644

 
24,443

Year ended December 31, 2015
8,164

 
10,406

 
18,570

Fair Value (Tables)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis 
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 year ended December 31, 2017.
 
As of December 31, 2017
 
As of December 31, 2016
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
Investments (available-for-sale and trading): (a)
 
 
 
 
 
 
 
 
 
 
 
Student loan and other asset-backed securities
$
—

 
76,866

 
76,866

 
—

 
103,780

 
103,780

Equity securities
3,928

 
—

 
3,928

 
2,694

 
—

 
2,694

Debt securities
108

 
—

 
108

 
119

 
—

 
119

Total investments (available-for-sale and trading)
4,036

 
76,866

 
80,902

 
2,813

 
103,780

 
106,593

Derivative instruments (b)
—

 
818

 
818

 
—

 
87,531

 
87,531

      Total assets
$
4,036

 
77,684

 
81,720

 
2,813

 
191,311

 
194,124

Liabilities:
 
 
 
 
 
 
 
 
 
 
 
Derivative instruments (b):
$
—

 
7,063

 
7,063

 
—

 
77,826

 
77,826

      Total liabilities
$
—

 
7,063

 
7,063

 
—

 
77,826

 
77,826


(a)
Investments represent investments recorded at fair value on a recurring basis. Level 1 investments are measured based upon quoted prices and include investments traded on an active exchange, such as the New York Stock Exchange, and corporate bonds, mortgage-backed securities, U.S. government bonds, and U.S. Treasury securities that trade in active markets. Level 2 investments include student loan asset-backed securities. The fair value for the student loan asset-backed securities is determined using indicative quotes from broker-dealers or an income approach valuation technique (present value using the discount rate adjustment technique) that considers, among other things, rates currently observed in publicly traded debt markets for debt of similar terms issued by companies with comparable credit risk.

(b)
All derivatives are accounted for at fair value on a recurring basis.  The fair value of derivative financial instruments is determined using a market approach in which derivative pricing models use the stated terms of the contracts and observable yield curves, forward foreign currency exchange rates, and volatilities from active markets.  

When determining the fair value of derivatives, the Company takes into account counterparty credit risk for positions where it is exposed to the counterparty on a net basis by assessing exposure net of collateral held. The net exposures for each counterparty are adjusted based on market information available for the specific counterparty.
Fair Value, by Balance Sheet Grouping 
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. During the first quarter of 2016, the Company recognized certain adjustments to the provisional amounts recorded at December 31, 2015 that were needed to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The net impact of these adjustments was an increase to goodwill, and the adjustments had no impact on operating results.
Cash and cash equivalents
 
$
334

Restricted cash
 
850

Accounts receivable
 
1,935

Property and equipment
 
32,479

Other assets
 
371

Intangible assets
 
11,410

Excess cost over fair value of net assets acquired (goodwill)
 
21,112

Other liabilities
 
(4,587
)
Bonds and notes payable
 
(13,904
)
Net assets acquired
 
50,000

Minority interest
 
(3,750
)
Total consideration paid by the Company
 
$
46,250

The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:

 
As of December 31, 2017
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Loans receivable
$
23,106,440

 
21,814,507

 
—

 
—

 
23,106,440

Cash and cash equivalents
66,752

 
66,752

 
66,752

 
—

 
—

Investments (available-for-sale)
80,902

 
80,902

 
4,036

 
76,866

 
—

Notes receivable
16,393

 
16,393

 
—

 
16,393

 
—

Restricted cash
688,193

 
688,193

 
688,193

 
—

 
—

Restricted cash – due to customers
187,121

 
187,121

 
187,121

 
—

 
—

Accrued interest receivable
430,385

 
430,385

 
—

 
430,385

 
—

Derivative instruments
818

 
818

 
—

 
818

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
21,521,463

 
21,356,573

 
—

 
21,521,463

 
—

Accrued interest payable
50,039

 
50,039

 
—

 
50,039

 
—

Due to customers
187,121

 
187,121

 
187,121

 
—

 
—

Derivative instruments
7,063

 
7,063

 
—

 
7,063

 
—


 
As of December 31, 2016
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Loans receivable
$
25,653,581

 
24,903,724

 
—

 
—

 
25,653,581

Cash and cash equivalents
69,654

 
69,654

 
69,654

 
—

 
—

Investments (available-for-sale and trading)
106,593

 
106,593

 
2,813

 
103,780

 
—

Notes receivable
17,031

 
17,031

 
—

 
17,031

 
—

Restricted cash
980,961

 
980,961

 
980,961

 
—

 
—

Restricted cash – due to customers
119,702

 
119,702

 
119,702

 
—

 
—

Accrued interest receivable
391,264

 
391,264

 
—

 
391,264

 
—

Derivative instruments
87,531

 
87,531

 
—

 
87,531

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
24,220,996

 
24,668,490

 
—

 
24,220,996

 
—

Accrued interest payable
45,677

 
45,677

 
—

 
45,677

 
—

Due to customers
119,702

 
119,702

 
119,702

 
—

 
—

Derivative instruments
77,826

 
77,826

 
—

 
77,826

 
—

Quarterly Financial Information (Tables)
Schedule of Quarterly Financial Information
 
2017
 
First quarter
 
Second quarter
 
Third quarter
 
Fourth quarter
Net interest income
$
76,925

 
79,842

 
75,237

 
73,235

Less provision for loan losses
1,000

 
3,000

 
6,700

 
3,750

Net interest income after provision for loan losses
75,925

 
76,842

 
68,537

 
69,485

Loan systems and servicing revenue
54,229

 
56,899

 
55,950

 
55,921

Tuition payment processing, school information, and campus commerce revenue
43,620

 
34,224

 
35,450

 
32,457

Communications revenue
5,106

 
5,719

 
6,751

 
8,122

Other income
12,632

 
12,485

 
19,756

 
7,952

Gain on sale of loans and debt repurchases, net
4,980

 
442

 
116

 
(2,635
)
Derivative market value and foreign currency transaction adjustments and derivative settlements, net
(4,830
)
 
(27,910
)
 
7,173

 
7,014

Salaries and benefits
(71,863
)
 
(74,628
)
 
(74,193
)
 
(81,201
)
Depreciation and amortization
(8,598
)
 
(9,038
)
 
(10,051
)
 
(11,854
)
Loan servicing fees
(6,025
)
 
(5,628
)
 
(8,017
)
 
(3,064
)
Cost to provide communications services
(1,954
)
 
(2,203
)
 
(2,632
)
 
(3,160
)
Operating expenses
(26,547
)
 
(26,521
)
 
(29,743
)
 
(38,809
)
Income tax (expense) benefit
(28,755
)
 
(16,032
)
 
(25,562
)
 
5,486

Net income
47,920

 
24,651

 
43,535

 
45,714

Net loss (income) attributable to noncontrolling interests
2,106

 
4,086

 
2,768

 
2,386

Net income attributable to Nelnet, Inc.
$
50,026

 
28,737

 
46,303

 
48,100

Earnings per common share:
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
$
1.18

 
0.68

 
1.11

 
1.17

 
2016
 
First quarter
 
Second quarter
 
Third quarter
 
Fourth quarter
Net interest income
$
101,609

 
92,200

 
99,795

 
78,960

Less provision for loan losses
2,500

 
2,000

 
6,000

 
3,000

Net interest income after provision for loan losses
99,109

 
90,200

 
93,795

 
75,960

Loan systems and servicing revenue
52,330

 
54,402

 
54,350

 
53,764

Tuition payment processing, school information, and campus commerce revenue
38,657

 
30,483

 
33,071

 
30,519

Communications revenue
4,346

 
4,478

 
4,343

 
4,492

Enrollment services revenue
4,326

 
—

 
—

 
—

Other income
13,796

 
9,765

 
15,150

 
15,218

Gain on sale of loans and debt repurchases, net
101

 
—

 
2,160

 
5,720

Derivative market value and foreign currency transaction adjustments and derivative settlements, net
(28,691
)
 
(40,702
)
 
36,001

 
83,187

Salaries and benefits
(63,242
)
 
(60,923
)
 
(63,743
)
 
(68,017
)
Depreciation and amortization
(7,640
)
 
(8,183
)
 
(8,994
)
 
(9,116
)
Loan servicing fees
(6,928
)
 
(7,216
)
 
(5,880
)
 
(5,726
)
Cost to provide communications services
(1,703
)
 
(1,681
)
 
(1,784
)
 
(1,697
)
Cost to provide enrollment services
(3,623
)
 
—

 
—

 
—

Operating expenses
(28,376
)
 
(29,409
)
 
(26,391
)
 
(31,245
)
Income tax (expense) benefit
(24,433
)
 
(15,036
)
 
(47,715
)
 
(54,128
)
Net income
48,029

 
26,178

 
84,363

 
98,931

Net loss (income) attributable to noncontrolling interests
(68
)
 
(28
)
 
(69
)
 
(585
)
Net income attributable to Nelnet, Inc.
$
47,961

 
26,150

 
84,294

 
98,346

Earnings per common share:
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
$
1.11

 
0.61

 
1.98

 
2.32

Condensed Parent Company Financial Statements (Tables)
Parent Only Balance Sheet 
Balance Sheets
(Parent Company Only)
As of December 31, 2017 and 2016
 
2017
 
2016
Assets:
 
 
 
Cash and cash equivalents
$
21,001

 
29,734

Investments and notes receivable
149,236

 
167,711

Investment in subsidiary debt
75,659

 
71,815

Restricted cash
44,149

 
7,805

Investment in subsidiaries
1,681,690

 
1,537,507

Notes receivable from subsidiaries
212,077

 
161,284

Other assets
131,790

 
136,685

Fair value of derivative instruments
818

 
86,379

Total assets
$
2,316,420

 
2,198,920

Liabilities:
 
 
 
Notes payable
$
79,120

 
48,085

Other liabilities
76,638

 
74,706

Fair value of derivative instruments
7,063

 
10,221

Total liabilities
162,821

 
133,012

Equity:
 
 
 
Nelnet, Inc. shareholders' equity:
 
 
 
Common stock
408

 
421

Additional paid-in capital
521

 
420

Retained earnings
2,143,983

 
2,056,084

Accumulated other comprehensive earnings
4,617

 
4,730

Total Nelnet, Inc. shareholders' equity
2,149,529

 
2,061,655

Noncontrolling interest
4,070

 
4,253

Total equity
2,153,599

 
2,065,908

Total liabilities and shareholders' equity
$
2,316,420

 
2,198,920

Parent Only Income Statement 
Statements of Income
(Parent Company Only)
Years ended December 31, 2017, 2016, and 2015
 
2017
 
2016
 
2015
Investment interest income
$
13,060

 
9,794

 
5,776

Interest expense on bonds and notes payable
3,315

 
6,049

 
6,242

Net interest income (expense)
9,745

 
3,745

 
(466
)
Other income:
 

 
 

 
 

Other income
3,483

 
7,037

 
4,012

Gain from debt repurchases, net
2,964

 
8,083

 
4,904

Equity in subsidiaries income
170,897

 
239,405

 
276,825

Derivative market value adjustments and derivative settlements, net
(603
)
 
45,203

 
8,416

Total other income
176,741

 
299,728

 
294,157

Operating expenses
6,117

 
8,183

 
5,057

Income before income taxes
180,369

 
295,290

 
288,634

Income tax expense
7,491

 
38,642

 
20,655

Net income
172,878

 
256,648

 
267,979

Net loss attributable to noncontrolling interest
288

 
103

 
—

Net income attributable to Nelnet, Inc.
$
173,166

 
256,751

 
267,979

Parent Only Statement of Other Comprehensive Income 
Statements of Comprehensive Income
(Parent Company Only)
Years ended December 31, 2017, 2016, and 2015
 
2017
 
2016
 
2015
Net income
$
172,878

 
256,648

 
267,979

Other comprehensive (loss) income:
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
Unrealized holding gains (losses) arising during period, net
2,349

 
5,789

 
(1,570
)
Reclassification adjustment for gains recognized in net income, net of losses
(2,528
)
 
(1,907
)
 
(2,955
)
Income tax effect
66

 
(1,436
)
 
1,674

Total other comprehensive (loss) income
(113
)
 
2,446

 
(2,851
)
Comprehensive income
172,765

 
259,094

 
265,128

Comprehensive loss attributable to noncontrolling interest
288

 
103

 
—

Comprehensive income attributable to Nelnet, Inc.
$
173,053

 
259,197

 
265,128

Parent Only Statement of Cash Flows 
Statements of Cash Flows
(Parent Company Only)
Years ended December 31, 2017, 2016, and 2015
 
2017
 
2016
 
2015
Net income attributable to Nelnet, Inc.
$
173,166

 
256,751

 
267,979

Net loss attributable to noncontrolling interest
(288
)
 
(103
)
 
—

Net income
172,878

 
256,648

 
267,979

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
420

 
391

 
327

Derivative market value adjustment
7,591

 
(62,268
)
 
(31,411
)
Proceeds from termination of derivative instruments, net of payments
2,100

 
3,999

 
65,527

Payment to enter into derivative instrument
(929
)
 
—

 
—

Proceeds from clearinghouse to settle variation margin, net
48,985

 
—

 
—

Equity in earnings of subsidiaries
(170,897
)
 
(239,405
)
 
(276,825
)
Gain from sales of available-for-sale securities, net of losses
(2,528
)
 
(1,907
)
 
(2,955
)
Gain from debt repurchases, net
(2,964
)
 
(8,083
)
 
(4,904
)
Deferred income tax (benefit) expense
(8,056
)
 
20,071

 
3,228

Non-cash compensation expense
4,416

 
4,348

 
5,347

Other
2,967

 
1,117

 
1,946

Decrease (increase) in other assets
4,171

 
32,262

 
(8,541
)
Increase (decrease) in other liabilities
10,104

 
(594
)
 
6,597

Net cash provided by operating activities
68,258

 
6,579

 
26,315

Cash flows from investing activities:
 
 
 
 
 
(Increase) decrease in restricted cash
(9,004
)
 
6,997

 
(13,825
)
Purchases of available-for-sale securities
(127,567
)
 
(94,920
)
 
(98,332
)
Proceeds from sales of available-for-sale securities
156,727

 
139,427

 
94,722

Capital contributions/distributions to/from subsidiaries, net
29,426

 
223,386

 
120,291

(Increase) decrease in notes receivable from subsidiaries
(50,793
)
 
8,561

 
(84,061
)
Proceeds from investments and notes receivable
4,823

 
9,952

 
12,253

(Purchases of) proceeds from subsidiary debt, net
(3,844
)
 
(13,800
)
 
72,125

Purchases of investments and issuances of notes receivable
(18,023
)
 
(4,365
)
 
(53,388
)
Business acquisition, net of cash acquired
—

 
—

 
(45,916
)
Net cash (used in) provided by investing activities
(18,255
)
 
275,238

 
3,869

Cash flows from financing activities:
 
 
 
 
 
Payments on notes payable
(27,480
)
 
(412,000
)
 
(42,541
)
Proceeds from issuance of notes payable
61,059

 
230,000

 
116,460

Payments of debt issuance costs
—

 
(613
)
 
(773
)
Dividends paid
(24,097
)
 
(21,188
)
 
(19,025
)
Repurchases of common stock
(68,896
)
 
(69,091
)
 
(96,169
)
Proceeds from issuance of common stock
678

 
889

 
801

Issuance of noncontrolling interest
—

 
501

 
—

Distribution to noncontrolling interest
—

 
—

 
(230
)
Net cash used in financing activities
(58,736
)
 
(271,502
)
 
(41,477
)
Net (decrease) increase in cash and cash equivalents
(8,733
)
 
10,315

 
(11,293
)
Cash and cash equivalents, beginning of period
29,734

 
19,419

 
30,712

Cash and cash equivalents, end of period
$
21,001

 
29,734

 
19,419

 
 
 
 
 
 
Cash disbursements made for:
 
 
 
 
 
Interest
$
2,882

 
5,533

 
5,914

Income taxes, net of refunds
$
96,721

 
115,415

 
147,130

 
 
 
 
 
 
Noncash investing and financing activities:
 
 
 
 
 
Issuance of noncontrolling interest
$
—

 
—

 
3,750

Contributions of investments to subsidiaries, net
$
2,092

 
1,884

 
—

Description of Business - Narrative (Details)
12 Months Ended
Dec. 31, 2017
operating_segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
Number of operating segments
4 
Recent Developments (Details) (Great Lakes Educational Loan Services [Member], Subsequent Event [Member], USD $)
In Millions, unless otherwise specified
0 Months Ended
Feb. 7, 2018
Feb. 7, 2018
Great Lakes Educational Loan Services [Member] |
Subsequent Event [Member]
 
 
Subsequent Event [Line Items]
 
 
Percentage of voting interests acquired
 
100.00% 
Payment to acquire business
$ 150.0 
 
Summary of Significant Accounting Policies and Practices - Variable Interest Entities (Details) (ALLO Communications [Member], USD $)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2017
Line of Credit [Member]
Dec. 31, 2016
Line of Credit [Member]
Variable Interest Entity [Line Items]
 
 
 
Percent ownership in VIE
91.50% 
 
 
Percent of operating decision voting power
80.00% 
 
 
Potential additional percent earned by VIE management
11.50% 
 
 
Line of credit issued to VIE
 
$ 270,000,000.0 
 
VIE line of credit amount outstanding
 
$ 193,100,000 
$ 58,000,000 
Summary of Significant Accounting Policies and Practices - Noncontrolling Interest (Details)
0 Months Ended
Jan. 1, 2016
Jan. 1, 2012
Whitetail Rock [Member]
Dec. 31, 2017
ALLO Communications [Member]
Dec. 31, 2015
ALLO Communications [Member]
Dec. 31, 2017
401 Building, LLC [Member]
Dec. 31, 2017
TDP Phase Three, LLC [Member]
Dec. 31, 2017
330-333 Building, LLC [Member]
Dec. 31, 2017
GreatNet, LLC [Member]
Feb. 7, 2018
Subsequent Event [Member]
Great Lakes Educational Loan Services [Member]
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
Noncontrolling interest, ownership percentage
 
10.00% 
7.50% 
 
 
 
 
 
 
Percentage of voting interests acquired
 
 
 
92.50% 
 
 
 
 
100.00% 
Ownership percentage sold
1.00% 
 
 
 
 
 
 
 
 
Noncontrolling Interest, minimum earn up percentage by noncontrolling owners
 
 
11.50% 
 
 
 
 
 
 
Maximum earn up percentage by noncontrolling owners
 
 
19.00% 
 
 
 
 
 
 
Ownership percentage by parent
 
 
 
 
50.00% 
25.00% 
50.00% 
50.00% 
 
Summary of Significant Accounting Policies and Practices - Loans Receivable (Details) (USD $)
Dec. 31, 2017
Dec. 31, 2016
Loans and Leases Receivable Disclosure [Line Items]
 
 
Loans receivable, gross
$ 21,995,877,000 
$ 25,103,643,000 
Held for sale
 
 
Loans and Leases Receivable Disclosure [Line Items]
 
 
Loans receivable, gross
$ 0 
$ 0 
Summary of Significant Accounting Policies and Practices - Allowance for Loan Losses (Details) (USD $)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
Threshold period past due for financing receivable to be placed on nonaccrual status
90 days 
 
Threshold period past due for write-off of financing receivable
120 days 
 
Impaired loans
$ 0 
$ 0 
Loans disbursed on or after July 1, 2006 [Member]
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
Percent of principal and interest federally guaranteed
97.00% 
 
Loans disbursed between October 1, 1993 and July 1, 2006 [Member]
 
 
Financing Receivable, Allowance for Credit Losses [Line Items]
 
 
Percent of principal and interest federally guaranteed
98.00% 
 
Summary of Significant Accounting Policies and Practices - Cash and Cash Equivalents and Statement of Cash Flows (Details) (USD $)
In Millions, unless otherwise specified
Dec. 31, 2015
Accounting Policies [Abstract]
 
Purchased accrued interest
$ 71.4 
Summary of Significant Accounting Policies and Practices - Revenue Recognition (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 0 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Restatement Adjustment [Member]
Feb. 1, 2016
Sparkroom LLC [Member]
Sep. 30, 2016
Stafford Loan
Consumer Portfolio Segment, Federally Insured [Member]
Aug. 31, 2016
Stafford Loan
Consumer Portfolio Segment, Federally Insured [Member]
Sep. 30, 2016
Student Loan, Consolidation Loan [Member]
Consumer Portfolio Segment, Federally Insured [Member]
Aug. 31, 2016
Student Loan, Consolidation Loan [Member]
Consumer Portfolio Segment, Federally Insured [Member]
Constant prepayment rate
 
 
 
 
5.00% 
6.00% 
3.00% 
4.00% 
Reduction to the company's net loan balance discount
$ (113,695)
$ (129,507)
$ 8,200 
 
 
 
 
 
Rebate fee on consolidation loans
1.05% 
 
 
 
 
 
 
 
Ownership interest sold
 
 
 
100.00% 
 
 
 
 
Summary of Significant Accounting Policies and Practices - Compensation Expense for Stock Bases Awards (Details) (Maximum [Member], Restricted Stock [Member])
12 Months Ended
Dec. 31, 2017
Maximum [Member] |
Restricted Stock [Member]
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
Vesting period
10 years 
Loans Receivable and Allowance for Loan Losses - Loans Receivable (Details) (USD $)
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
Loans receivable, gross
$ 21,995,877,000 
$ 25,103,643,000 
 
 
Loan discount, net of unamortized loan premiums and deferred origination costs
(113,695,000)
(129,507,000)
 
 
Allowance for loan losses
(54,590,000)
(51,842,000)
(50,498,000)
(48,900,000)
Loans receivable, net
21,814,507,000 
24,903,724,000 
 
 
Non-Accretable Discount [Member]
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
Loan discount, net of unamortized loan premiums and deferred origination costs
(13,085,000)
(18,570,000)
 
 
Consumer Portfolio Segment, Federally Insured [Member]
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
Loans receivable, gross
21,721,606,000 
24,829,984,000 
 
 
Allowance for loan losses
(38,706,000)
(37,268,000)
(35,490,000)
 
Consumer Portfolio Segment, Federally Insured [Member] |
Student Loan, Stafford And Other [Member]
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
Loans receivable, gross
4,418,881,000 
5,186,047,000 
 
 
Consumer Portfolio Segment, Federally Insured [Member] |
Student Loan, Consolidation Loan [Member]
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
Loans receivable, gross
17,302,725,000 
19,643,937,000 
 
 
Consumer Portfolio Segment, Private Education Loans [Member]
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
Loans receivable, gross
212,160,000 
273,659,000 
 
 
Allowance for loan losses
(12,629,000)
(14,574,000)
(15,008,000)
 
Consumer Portfolio Segment, Consumer Loans [Member]
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
Loans receivable, gross
62,111,000 
0 
 
 
Allowance for loan losses
(3,255,000)
0 
0 
 
Financing Receivables Purchased Portfolio [Member] |
Non-Accretable Discount [Member]
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
Loans receivable, gross
$ 5,800,000,000 
$ 8,300,000,000 
 
 
Loans Receivable and Allowance for Loan Losses - Activity in the Allowance for Loan Losses (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses - balance
 
 
 
$ 51,842,000 
 
 
 
$ 50,498,000 
$ 51,842,000 
$ 50,498,000 
$ 48,900,000 
Provision for loan losses
3,750,000 
6,700,000 
3,000,000 
1,000,000 
3,000,000 
6,000,000 
2,000,000 
2,500,000 
14,450,000 
13,500,000 
10,150,000 
Charge-offs
 
 
 
 
 
 
 
 
(13,070,000)
(14,020,000)
(14,144,000)
Allowance for loan losses - balance
54,590,000 
 
 
 
51,842,000 
 
 
 
54,590,000 
51,842,000 
50,498,000 
Consumer Portfolio Segment, Federally Insured [Member]
 
 
 
 
 
 
 
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses - balance
 
 
 
37,268,000 
 
 
 
35,490,000 
37,268,000 
35,490,000 
 
Provision for loan losses
 
 
 
 
 
 
 
 
13,000,000 
14,000,000 
8,000,000 
Charge-offs
 
 
 
 
 
 
 
 
(11,562,000)
(12,292,000)
(11,730,000)
Purchase (sale) of financing receivables, net
 
 
 
 
 
 
 
 
0 
70,000 
50,000 
Allowance for loan losses - balance
38,706,000 
 
 
 
37,268,000 
 
 
 
38,706,000 
37,268,000 
35,490,000 
Consumer Portfolio Segment, Private Education Loans [Member]
 
 
 
 
 
 
 
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses - balance
 
 
 
14,574,000 
 
 
 
15,008,000 
14,574,000 
15,008,000 
 
Provision for loan losses
 
 
 
 
 
 
 
 
(2,000,000)
(500,000)
2,150,000 
Charge-offs
 
 
 
 
 
 
 
 
(1,313,000)
(1,728,000)
(2,414,000)
Recoveries - private education loans
 
 
 
 
 
 
 
 
768,000 
954,000 
1,050,000 
Purchase (sale) of financing receivables, net
 
 
 
 
 
 
 
 
0 
480,000 
(140,000)
Transfer from repurchase obligation related to private education loans repurchased, net (a)
 
 
 
 
 
 
 
 
600,000 
360,000 
4,632,000 
Allowance for loan losses - balance
12,629,000 
 
 
 
14,574,000 
 
 
 
12,629,000 
14,574,000 
15,008,000 
Consumer Portfolio Segment, Consumer Loans [Member]
 
 
 
 
 
 
 
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Allowance for loan losses - balance
 
 
 
0 
 
 
 
0 
0 
0 
 
Provision for loan losses
 
 
 
 
 
 
 
 
3,450,000 
0 
0 
Charge-offs
 
 
 
 
 
 
 
 
(195,000)
0 
0 
Allowance for loan losses - balance
3,255,000 
 
 
 
0 
 
 
 
3,255,000 
0 
0 
Non-Federally Insured Loans Sold Subject to Repurchase Agreement [Member]
 
 
 
 
 
 
 
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Days delinquent to trigger repurchase range, minimum
 
 
 
 
 
 
 
 
60 days 
 
 
Days delinquent to trigger repurchase range, maximum
 
 
 
 
 
 
 
 
90 days 
 
 
Obligation to Repurchase Receivables Sold [Member]
 
 
 
 
 
 
 
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Loans sold under repurchase obligation agreement
 
 
 
 
 
 
 
 
 
39,500,000 
 
Accrual for estimated loss related to repurchase of loans sold
 
 
 
 
$ 2,300,000 
 
 
 
 
$ 2,300,000 
 
Loans Receivable and Allowance for Loan Losses - Student Loan Status and Delinquency (Details) (USD $)
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Loans in repayment status:
 
 
 
Total loans
$ 21,995,877,000 
$ 25,103,643,000 
 
Consumer Portfolio Segment, Private Education Loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Total loans
212,160,000 
273,659,000 
 
Consumer Portfolio Segment, Private Education Loans [Member] |
Private education loans [Member]
 
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
 
Loans in-school/grace/deferment
6,053,000 
35,146,000 
30,795,000 
Loans in forbearance
2,237,000 
3,448,000 
350,000 
Loans in repayment status:
 
 
 
Loans current
196,720,000 
228,612,000 
228,464,000 
Loans current, percentage
96.50% 
97.20% 
96.70% 
Total loans in repayment
203,870,000 
235,065,000 
236,497,000 
Total loans in repayment, percentage
100.00% 
100.00% 
100.00% 
Total loans
212,160,000 
273,659,000 
267,642,000 
Consumer Portfolio Segment, Private Education Loans [Member] |
Financing Receivables, 31 to 60 Days Past Due [Member] [Member] |
Private education loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
1,867,000 
1,677,000 
1,771,000 
Loans past due, percentage
0.90% 
0.70% 
0.70% 
Consumer Portfolio Segment, Private Education Loans [Member] |
Financing Receivables, 61 to 90 Days Past Due [Member] |
Private education loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
1,052,000 
1,110,000 
1,283,000 
Loans past due, percentage
0.50% 
0.50% 
0.50% 
Consumer Portfolio Segment, Private Education Loans [Member] |
Financing Receivables, Equal to Greater than 91 Days Past Due [Member] |
Private education loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
4,231,000 
3,666,000 
4,979,000 
Loans past due, percentage
2.10% 
1.60% 
2.10% 
Consumer Portfolio Segment, Federally Insured [Member]
 
 
 
Loans in repayment status:
 
 
 
Total loans
21,721,606,000 
24,829,984,000 
 
Consumer Portfolio Segment, Federally Insured [Member] |
Federally insured loans, excluding rehabiliation loans [Member]
 
 
 
Financing Receivable, Recorded Investment, Past Due [Line Items]
 
 
 
Loans in-school/grace/deferment
1,260,394,000 
1,606,468,000 
2,292,941,000 
Loans in forbearance
1,774,405,000 
2,295,367,000 
2,979,357,000 
Loans in repayment status:
 
 
 
Loans current
16,477,004,000 
18,125,768,000 
19,447,541,000 
Loans current, percentage
88.20% 
86.60% 
84.40% 
Total loans in repayment
18,686,807,000 
20,928,149,000 
23,015,809,000 
Total loans in repayment, percentage
100.00% 
100.00% 
100.00% 
Total loans
21,721,606,000 
24,829,984,000 
28,288,107,000 
Consumer Portfolio Segment, Federally Insured [Member] |
Financing Receivables, 31 to 60 Days Past Due [Member] [Member] |
Federally insured loans, excluding rehabiliation loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
682,586,000 
818,976,000 
1,028,396,000 
Loans past due, percentage
3.70% 
3.90% 
4.50% 
Consumer Portfolio Segment, Federally Insured [Member] |
Financing Receivables, 61 to 90 Days Past Due [Member] |
Federally insured loans, excluding rehabiliation loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
374,534,000 
487,647,000 
566,953,000 
Loans past due, percentage
2.00% 
2.30% 
2.50% 
Consumer Portfolio Segment, Federally Insured [Member] |
Financing receivables, 91-120 days past due [Member] |
Federally insured loans, excluding rehabiliation loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
287,922,000 
335,291,000 
415,747,000 
Loans past due, percentage
1.50% 
1.60% 
1.80% 
Consumer Portfolio Segment, Federally Insured [Member] |
Financing receivables, 121-270 days past due [Member] |
Federally insured loans, excluding rehabiliation loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
629,480,000 
854,432,000 
1,166,940,000 
Loans past due, percentage
3.40% 
4.10% 
5.10% 
Consumer Portfolio Segment, Federally Insured [Member] |
Financing receivables, 271 days or greater past due [Member] |
Federally insured loans, excluding rehabiliation loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
$ 235,281,000 
$ 306,035,000 
$ 390,232,000 
Loans past due, percentage
1.20% 
1.50% 
1.70% 
Bonds and Notes Payable - Outstanding Debt Obligations (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Bonds and notes payable
$ 21,356,573 
$ 24,668,490 
Discount on bonds and notes payable and debt issuance costs
(370,554)
(431,930)
Bonds and notes based on indices [Member] |
Federally insured student loans [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
20,352,045 
22,130,063 
Bonds and notes based on indices [Member] |
Federally insured student loans [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
1.47% 
0.24% 
Bonds and notes based on indices [Member] |
Federally insured student loans [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
3.37% 
6.90% 
Bonds and notes based on auction [Member] |
Federally insured student loans [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
780,829 
998,415 
Bonds and notes based on auction [Member] |
Federally insured student loans [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
2.09% 
1.61% 
Bonds and notes based on auction [Member] |
Federally insured student loans [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
2.69% 
2.28% 
Variable-rate bonds and notes [Member] |
Private education loans [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
74,717 
112,582 
Variable-rate bonds and notes [Member] |
Private education loans [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
3.30% 
2.60% 
Variable-rate bonds and notes [Member] |
Private education loans [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
3.30% 
2.60% 
Variable-rate bonds and notes [Member] |
Federally insured student loans [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
21,132,874 
23,128,478 
fixed rate bonds and notes [Member] |
Private education loans [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
82,647 
113,378 
fixed rate bonds and notes [Member] |
Private education loans [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
3.60% 
3.60% 
fixed rate bonds and notes [Member] |
Private education loans [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
5.35% 
5.35% 
Warehouse Agreement Borrowings [Member] |
FFELP Warehouse Total [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
335,992 
1,677,443 
Warehouse Agreement Borrowings [Member] |
FFELP Warehouse Total [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
1.55% 
0.63% 
Warehouse Agreement Borrowings [Member] |
FFELP Warehouse Total [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
1.56% 
1.09% 
Unsecured line of credit [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
10,000 
0 
Unsecured line of credit [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
2.98% 
0.00% 
Unsecured line of credit [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
2.98% 
0.00% 
Junior Subordinated Hybrid Securities [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
20,381 
50,184 
Interest rate range
5.07% 
 
Junior Subordinated Hybrid Securities [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
5.07% 
4.37% 
Junior Subordinated Hybrid Securities [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
5.07% 
4.37% 
Notes Payable, Other Payables [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
70,516 
18,355 
Notes Payable, Other Payables [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
2.44% 
3.38% 
Notes Payable, Other Payables [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
3.38% 
3.38% 
Bonds and notes payable, gross [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
$ 21,727,127 
$ 25,100,420 
Bonds and Notes Payable - Bonds and Notes Payable Outstanding Lines of Credit (Details) (Warehouse Agreement Borrowings [Member], USD $)
Dec. 31, 2017
NFSLW-I Warehouse [Member] |
FFELP Warehouse Total [Member]
 
Line of Credit Facility [Line Items]
 
Maximum financing amount
$ 500,000,000 
Amount outstanding
189,502,000 
Amount available
310,498,000 
Advanced as equity support
9,513,000 
NFSLW-I Warehouse [Member] |
FFELP Warehouse Total [Member] |
Minimum [Member]
 
Line of Credit Facility [Line Items]
 
Maximum advance rates
92.00% 
Minimum advance rates
84.00% 
NFSLW-I Warehouse [Member] |
FFELP Warehouse Total [Member] |
Maximum [Member]
 
Line of Credit Facility [Line Items]
 
Maximum advance rates
98.00% 
Minimum advance rates
90.00% 
NHELP-II Warehouse [Member] |
FFELP Warehouse Total [Member]
 
Line of Credit Facility [Line Items]
 
Maximum financing amount
500,000,000 
Amount outstanding
146,490,000 
Amount available
353,510,000 
Advanced as equity support
12,876,000 
NHELP-II Warehouse [Member] |
FFELP Warehouse Total [Member] |
Minimum [Member]
 
Line of Credit Facility [Line Items]
 
Maximum advance rates
85.00% 
Minimum advance rates
85.00% 
NHELP-II Warehouse [Member] |
FFELP Warehouse Total [Member] |
Maximum [Member]
 
Line of Credit Facility [Line Items]
 
Maximum advance rates
95.00% 
Minimum advance rates
95.00% 
FFELP Warehouse Total [Member]
 
Line of Credit Facility [Line Items]
 
Maximum financing amount
1,000,000,000 
Amount outstanding
335,992,000 
Amount available
664,008,000 
Advanced as equity support
$ 22,389,000 
Bonds and Notes Payable - Bonds and Notes Payable Asset-backed Securitizations (Details) (USD $)
12 Months Ended 12 Months Ended
Dec. 31, 2017
Asset-backed security [Member]
Dec. 31, 2017
NSLT 2017-1 [Member]
Asset-backed security [Member]
Dec. 31, 2017
NSLT 2017-2 [Member]
Asset-backed security [Member]
Dec. 31, 2017
NSLT 2017-3 [Member]
Asset-backed security [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
Class A [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
Class B [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
FFELP 2016-1 Securitization [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
FFELP 2016-1 Securitization [Member]
Class A [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
Private Education Loan 2016-A Securitization [Member]
Jun. 26, 2015
Asset-backed Securities [Member]
Private Education Loan 2016-A Securitization [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
Private Education Loan 2016-A Securitization [Member]
Private Education Loan 2016-A Securitization Class A-1A [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
Private Education Loan 2016-A Securitization [Member]
Private Education Loan 2016-A Securitization Class A-1B [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
Private Education Loan 2016-A Securitization [Member]
Class A [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
Private Education Loan 2016-A Securitization [Member]
Class A [Member]
Private Education Loan 2016-A Securitization Class A-1A [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
Private Education Loan 2016-A Securitization [Member]
Class A [Member]
Private Education Loan 2016-A Securitization Class A-1B [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
Private Education Loan 2016-A Securitization [Member]
Class B [Member]
Dec. 31, 2017
London Interbank Offered Rate (LIBOR) [Member]
NSLT 2017-1 [Member]
Asset-backed security [Member]
Dec. 31, 2017
London Interbank Offered Rate (LIBOR) [Member]
NSLT 2017-2 [Member]
Asset-backed security [Member]
Dec. 31, 2017
London Interbank Offered Rate (LIBOR) [Member]
NSLT 2017-3 [Member]
Asset-backed security [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
Asset-backed Securities [Member]
FFELP 2016-1 Securitization [Member]
Dec. 31, 2016
London Interbank Offered Rate (LIBOR) [Member]
Asset-backed Securities [Member]
Private Education Loan 2016-A Securitization [Member]
Private Education Loan 2016-A Securitization Class A-1A [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total original principal amount
$ 1,473,790,000 
$ 535,000,000 
$ 399,390,000 
$ 539,400,000 
$ 651,960,000 
$ 629,960,000 
$ 22,000,000 
$ 426,000,000 
$ 426,000,000 
$ 225,960,000 
 
$ 112,582,000 
$ 91,378,000 
$ 203,960,000 
$ 112,582,000 
$ 91,378,000 
$ 22,000,000 
 
 
 
 
 
Bond discount
(2,002,000)
0 
(2,002,000)
0 
 
(609,000)
(285,000)
 
0 
 
 
 
 
(609,000)
0 
(609,000)
(285,000)
 
 
 
 
 
Issue price
1,471,788,000 
535,000,000 
397,388,000 
539,400,000 
 
629,351,000 
21,715,000 
 
426,000,000 
 
 
 
 
203,351,000 
112,582,000 
90,769,000 
21,715,000 
 
 
 
 
 
Variable interest rate basis
 
 
 
 
 
 
 
 
 
 
 
 
3.60% 
 
 
 
5.35% 
0.78% 
0.77% 
0.85% 
0.80% 
1.75% 
Aggregate principal amount
 
 
 
 
 
 
 
 
 
 
$ 275,000,000.0 
 
 
 
 
 
 
 
 
 
 
 
Bonds and Notes Payable - Narrative (Details) (USD $)
12 Months Ended 3 Months Ended 12 Months Ended 0 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2017
Unsecured Line of Credit [Member]
Mar. 31, 2017
Junior Subordinated Debt [Member]
Dec. 31, 2017
Junior Subordinated Debt [Member]
Dec. 31, 2016
Junior Subordinated Debt [Member]
Sep. 27, 2006
Junior Subordinated Debt [Member]
Dec. 31, 2017
Asset-backed Securities [Member]
Dec. 31, 2016
Asset-backed Securities [Member]
Dec. 31, 2015
Asset-backed Securities [Member]
Dec. 31, 2017
Auction Rate Securities [Member]
Sep. 27, 2006
London Interbank Offered Rate (LIBOR) [Member]
Junior Subordinated Debt [Member]
Dec. 31, 2017
TDP Phase Three, LLC [Member]
Dec. 31, 2017
Minimum [Member]
Unsecured Line of Credit [Member]
Dec. 31, 2017
Minimum [Member]
Junior Subordinated Debt [Member]
Dec. 31, 2016
Minimum [Member]
Junior Subordinated Debt [Member]
Dec. 31, 2017
Minimum [Member]
Auction Rate Securities [Member]
Dec. 31, 2017
Maximum [Member]
Unsecured Line of Credit [Member]
Dec. 31, 2017
Maximum [Member]
Junior Subordinated Debt [Member]
Dec. 31, 2016
Maximum [Member]
Junior Subordinated Debt [Member]
Dec. 31, 2017
Maximum [Member]
Auction Rate Securities [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable
$ 21,356,573,000 
$ 24,668,490,000 
 
 
 
$ 20,381,000 
$ 50,184,000 
 
 
 
 
$ 780,800,000 
 
 
 
 
 
 
 
 
 
 
Maximum financing amount
 
 
 
350,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unsecured line of credit
 
 
 
10,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount available
 
 
 
340,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Aggregate principal amount
 
 
 
 
 
 
 
200,000,000.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable interest rate basis
 
 
 
 
 
 
 
 
 
 
 
 
3.375% 
 
1.00% 
 
 
1.00% 
2.00% 
 
 
2.50% 
Interest during period
 
 
 
1.50% 
 
5.07% 
 
 
 
 
 
 
 
 
 
5.07% 
4.37% 
 
 
5.07% 
4.37% 
 
Amount of debt extinguished
184,210,000 
85,412,000 
46,530,000 
 
29,700,000 
 
 
 
154,407,000 
78,412,000 
32,026,000 
 
 
 
 
 
 
 
 
 
 
 
Purchase price
181,308,000 
77,431,000 
41,728,000 
 
25,300,000 
 
 
 
155,951,000 
72,566,000 
30,354,000 
 
 
 
 
 
 
 
 
 
 
 
Other borrowings subject to repurchase agreement
 
 
 
 
 
 
 
 
$ 50,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ownership percentage by parent
 
 
 
 
 
 
 
 
 
 
 
 
 
25.00% 
 
 
 
 
 
 
 
 
Bonds and Notes Payable - Schedule of TDP Notes Outstanding (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2017
TDP Note 1 [Member]
Dec. 31, 2017
TDP Note 2 [Member]
Dec. 31, 2017
TDP Note 3 [Member]
Dec. 31, 2017
London Interbank Offered Rate (LIBOR) [Member]
TDP Note 3 [Member]
Line of Credit Facility [Line Items]
 
 
 
 
 
 
Notes payable
$ 21,356,573 
$ 24,668,490 
$ 12,000 
$ 6,355 
$ 1,743 
 
Interest during period
 
 
3.38% 
3.38% 
 
 
Variable interest rate basis
 
 
 
 
 
2.00% 
Bonds and Notes Payable - Maturity of long-term debt (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Notes payable
$ 21,356,573 
$ 24,668,490 
Debt and Capital Lease Obligations, Gross [Member]
 
 
Debt Instrument [Line Items]
 
 
2018
50,418 
 
2019
189,502 
 
2020
146,490 
 
2021
33,410 
 
2022
0 
 
2023 and thereafter
21,307,307 
 
Notes payable
$ 21,727,127 
 
Bonds and Notes Payable - Debt Repurchases (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Debt Instrument [Line Items]
 
 
 
Par value
$ 184,210 
$ 85,412 
$ 46,530 
Purchase price
181,308 
77,431 
41,728 
Gain (loss) from debt repurchases
2,902 
7,981 
4,802 
Asset-backed Securities [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Par value
154,407 
78,412 
32,026 
Purchase price
155,951 
72,566 
30,354 
Gain (loss) from debt repurchases
(1,544)
5,846 
1,672 
Unsecured Debt - Hybrid Securities [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Par value
29,803 
7,000 
14,504 
Purchase price
25,357 
4,865 
11,374 
Gain (loss) from debt repurchases
$ 4,446 
$ 2,135 
$ 3,130 
Derivative Financial Instruments - Basis Swap (Details) (USD $)
Dec. 31, 2017
Dec. 31, 2016
Derivative [Line Items]
 
 
Loans receivable
$ 21,814,507,000 
$ 24,903,724,000 
Notes payable
21,356,573,000 
24,668,490,000 
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
11,250,000,000 
1,775,000,000 
Variable interest rate spread
0.125% 
0.101% 
One Month to Three Month Basis Swap Outstanding 6 [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
4,250,000,000 
 
One Month to Three Month Basis Swap Outstanding 7 [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
100,000,000 
 
One Month to Three Month Basis Swap Outstanding 8 [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
300,000,000 
300,000,000 
One Month to Three Month Basis Swap Outstanding 1 [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
3,500,000,000 
 
One Month to Three Month Basis Swap Outstanding 8 [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
1,000,000,000 
 
One Month to Three Month Basis Swap Outstanding 2 [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
250,000,000 
 
One Month to Three Month Basis Swap Outstanding 3 [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
1,150,000,000 
1,150,000,000 
One Month to Three Month Basis Swap Oustanding 4 [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
375,000,000 
 
One Month to Three Month Basis Swap Outstanding 5 [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
325,000,000 
325,000,000 
One-month LIBOR, Daily reset [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Loans receivable
20,000,000,000 
 
Three-month commercial paper rate [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Loans receivable
1,100,000,000 
 
Three-month treasury bill, Daily reset [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Loans receivable
600,000,000 
 
Three-month LIBOR, Quarterly reset [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notes payable
11,700,000,000 
 
One-month LIBOR, Monthly reset [Member] |
One Month to Three Month LIBOR Basis Swap [Member]
 
 
Derivative [Line Items]
 
 
Notes payable
$ 8,600,000,000 
 
Derivative Financial Instruments - Interest Rate Swaps, Floor Income Hedge (Details) (USD $)
12 Months Ended 0 Months Ended 12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Aug. 20, 2014
Swaption [Member]
Dec. 31, 2017
Swaption [Member]
Dec. 31, 2017
Fixed Rate Floor Income [Member]
Interest Rate Swap [Member]
Dec. 31, 2016
Fixed Rate Floor Income [Member]
Interest Rate Swap [Member]
Dec. 31, 2017
Fixed Rate Floor Income [Member]
Maturity 2017 [Member]
Interest Rate Swap [Member]
Dec. 31, 2016
Fixed Rate Floor Income [Member]
Maturity 2017 [Member]
Interest Rate Swap [Member]
Dec. 31, 2017
Fixed Rate Floor Income [Member]
Maturity 2018 [Member]
Interest Rate Swap [Member]
Dec. 31, 2016
Fixed Rate Floor Income [Member]
Maturity 2018 [Member]
Interest Rate Swap [Member]
Dec. 31, 2017
Fixed Rate Floor Income [Member]
Maturity 2019 [Member]
Interest Rate Swap [Member]
Dec. 31, 2016
Fixed Rate Floor Income [Member]
Maturity 2019 [Member]
Interest Rate Swap [Member]
Dec. 31, 2017
Fixed Rate Floor Income [Member]
Maturity 2020 [Member]
Interest Rate Swap [Member]
Dec. 31, 2016
Fixed Rate Floor Income [Member]
Maturity 2020 [Member]
Interest Rate Swap [Member]
Dec. 31, 2017
Fixed Rate Floor Income [Member]
Maturity 2023 [Member]
Interest Rate Swap [Member]
Dec. 31, 2017
Fixed Rate Floor Income [Member]
Maturity 2024 [Member]
Interest Rate Swap [Member]
Dec. 31, 2017
Fixed Rate Floor Income [Member]
Maturity 2025 [Member]
Interest Rate Swap [Member]
Dec. 31, 2016
Fixed Rate Floor Income [Member]
Maturity 2025 [Member]
Interest Rate Swap [Member]
Dec. 31, 2017
Fixed Rate Floor Income [Member]
Maturity 2027 [Member]
Interest Rate Swap [Member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan assets, fixed floor income
 
 
 
 
 
$ 4,800,000,000 
$ 8,400,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Variable conversion rate
 
 
 
 
 
3.17% 
2.42% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notional amount
 
 
 
 
250,000,000 
7,300,000,000 
6,950,000,000 
0 
750,000,000 
1,350,000,000 
1,350,000,000 
3,250,000,000 
3,250,000,000 
1,500,000,000 
1,500,000,000 
750,000,000 
300,000,000 
100,000,000 
100,000,000 
50,000,000 
Weighted average fixed rate paid by the Company
 
 
 
 
 
1.21% 
1.02% 
0.00% 
0.99% 
1.07% 
1.07% 
0.97% 
0.97% 
1.01% 
1.01% 
2.28% 
2.28% 
2.32% 
2.32% 
2.32% 
Payments to enter into derivative instruments
$ (929,000)
$ 0 
$ (2,936,000)
$ (9,100,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, swaption interest rate
 
 
 
 
3.30% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments - Interest Rate Caps (Details) (USD $)
12 Months Ended 1 Months Ended 3 Months Ended 3 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Jun. 30, 2015
Interest Rate Cap [Member]
contract
Mar. 31, 2017
Interest Rate Cap [Member]
Jun. 30, 2015
Interest Rate Cap [Member]
Private Loan Warehouse Total [Member]
Jun. 30, 2015
Interest Rate Cap 1 [Member]
Interest Rate Cap [Member]
Jun. 30, 2015
Interest Rate Cap 2 [Member]
Interest Rate Cap [Member]
Mar. 31, 2017
2017 Interest Rate Cap [Member]
Interest Rate Cap [Member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
Notes payable
$ 21,356,573,000 
$ 24,668,490,000 
 
 
 
$ 275,000,000 
 
 
 
Payments to enter into derivative instruments
929,000 
0 
2,936,000 
2,900,000 
 
 
 
 
929,000 
Derivative, Number Of Contracts
 
 
 
2 
 
 
 
 
 
Notional amount
 
 
 
275,000,000.0 
 
 
125,000,000.0 
150,000,000.0 
 
Derivative cap interest rate
 
 
 
 
 
 
2.50% 
4.99% 
 
Proceeds (payments) to terminate and or amend derivative instruments
$ (30,400,000)
$ 4,000,000 
 
 
$ 913,000 
 
 
 
 
Derivative Financial Instruments - Interest Rate Swaps, Unsecured Debt Hedges (Details) (USD $)
Dec. 31, 2017
Dec. 31, 2016
Derivative [Line Items]
 
 
Notes payable
$ 21,356,573,000 
$ 24,668,490,000 
Junior Subordinated Debt [Member]
 
 
Derivative [Line Items]
 
 
Notes payable
20,381,000 
50,184,000 
Interest during period
5.07% 
 
Junior Subordinated Debt [Member] |
unsecured debt hedges [Member] |
Maturity 2036 [Member] |
Interest Rate Swap [Member]
 
 
Derivative [Line Items]
 
 
Notes payable
20,400,000 
50,200,000 
Interest during period
3.375% 
 
Derivative fixed interest rate
7.66% 
7.66% 
Notional amount
$ 25,000,000 
$ 25,000,000 
Weighted average fixed rate paid by the Company
4.28% 
4.28% 
Derivative Financial Instruments - Cross-currency Interest Rate Swaps (Details)
12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Dec. 31, 2015
USD ($)
Dec. 31, 2017
Currency Swap [Member]
USD ($)
Dec. 31, 2017
Currency Swap [Member]
EUR (€)
Oct. 25, 2017
Currency Swap [Member]
USD ($)
Dec. 31, 2017
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
USD ($)
Dec. 31, 2016
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
USD ($)
Dec. 31, 2015
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
USD ($)
Dec. 31, 2017
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
Currency Swap [Member]
USD ($)
Dec. 31, 2016
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
Currency Swap [Member]
USD ($)
Dec. 31, 2015
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
Currency Swap [Member]
USD ($)
Dec. 31, 2006
Student Loan Asset Backed Securities Euro Note [Member]
EUR (€)
Dec. 31, 2017
Student Loan Asset Backed Securities Euro Note [Member]
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
USD ($)
Dec. 31, 2016
Student Loan Asset Backed Securities Euro Note [Member]
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
USD ($)
Dec. 31, 2015
Student Loan Asset Backed Securities Euro Note [Member]
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issue price
 
 
 
 
 
 
 
 
 
 
 
 
€ 352,700,000 
 
 
 
Notional amount
 
 
 
450,000,000 
352,700,000 
450,000,000 
 
 
 
 
 
 
 
 
 
 
Re-measurement of Euro Notes
 
 
 
 
 
 
 
 
 
 
 
 
 
(45,600,000)
11,849,000 
43,801,000 
Change in fair value of cross currency interest rate swap
26,379,000 
59,895,000 
(15,150,000)
 
 
 
 
 
 
34,208,000 
(1,954,000)
(45,195,000)
 
 
 
 
Total impact to consolidated statements of income - (expense) income
 
 
 
 
 
 
$ (11,392,000)
$ 9,895,000 
$ (1,394,000)
 
 
 
 
 
 
 
Derivative Financial Instruments - Fair Value of Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended 3 Months Ended 12 Months Ended 12 Months Ended 12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Mar. 31, 2017
Interest Rate Cap [Member]
Dec. 31, 2017
Derivative Financial Instruments, Assets [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Dec. 31, 2017
Derivative Financial Instruments, Assets [Member]
1:3 basis swaps [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
1:3 basis swaps [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - floor income hedges [Member]
Dec. 31, 2017
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - floor income hedges [Member]
Dec. 31, 2017
Derivative Financial Instruments, Assets [Member]
Interest rate swap option - floor income hedge [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Interest rate swap option - floor income hedge [Member]
Dec. 31, 2017
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - hybrid debt hedges [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - hybrid debt hedges [Member]
Dec. 31, 2017
Derivative Financial Instruments, Assets [Member]
Interest Rate Cap [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Interest Rate Cap [Member]
Dec. 31, 2017
Derivative Financial Instruments, Assets [Member]
Cross-currency interest rate swaps [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Cross-currency interest rate swaps [Member]
Dec. 31, 2017
Derivative Financial Instruments, Assets [Member]
Other [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Other [Member]
Dec. 31, 2017
Derivative Financial Instruments, Liabilities [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Dec. 31, 2017
Derivative Financial Instruments, Liabilities [Member]
1:3 basis swaps [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
1:3 basis swaps [Member]
Dec. 31, 2017
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - floor income hedges [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - floor income hedges [Member]
Dec. 31, 2017
Derivative Financial Instruments, Liabilities [Member]
Interest rate swap option - floor income hedge [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Interest rate swap option - floor income hedge [Member]
Dec. 31, 2017
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - hybrid debt hedges [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - hybrid debt hedges [Member]
Dec. 31, 2017
Derivative Financial Instruments, Liabilities [Member]
Interest Rate Cap [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Interest Rate Cap [Member]
Dec. 31, 2017
Derivative Financial Instruments, Liabilities [Member]
Cross-currency interest rate swaps [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Cross-currency interest rate swaps [Member]
Dec. 31, 2017
Derivative Financial Instruments, Liabilities [Member]
Other [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Other [Member]
Derivatives, Fair Value [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of asset derivatives
$ 818 
$ 87,531 
 
$ 818 
$ 87,531 
$ 0 
$ 0 
$ 81,159 
$ 0 
$ 543 
$ 2,977 
$ 0 
$ 0 
$ 275 
$ 1,152 
$ 0 
$ 0 
$ 0 
$ 2,243 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of liability derivatives
7,063 
77,826 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,063 
77,826 
0 
2,624 
0 
256 
0 
0 
7,063 
7,341 
0 
0 
0 
67,605 
0 
0 
Proceeds (payments) to terminate and or amend derivative instruments
$ (30,400)
$ 4,000 
$ 913 
 
 
$ 2,100 
$ 600 
$ 3,400 
 
 
 
 
 
$ 900 
 
$ (33,400)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments - Gross/Net (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Derivative assets
 
 
Net asset (liability)
$ 818 
$ 85,126 
Derivative liabilities
 
 
Net asset (liability)
1,457 
(67,654)
Derivative Financial Instruments, Assets [Member]
 
 
Derivative assets
 
 
Gross amounts of recognized assets presented in the consolidated balance sheets
818 
87,531 
Derivatives subject to enforceable master netting arrangement
0 
(2,880)
Cash collateral pledged
0 
475 
Derivative Financial Instruments, Liabilities [Member]
 
 
Derivative liabilities
 
 
Gross amounts of recognized liabilities presented in the consolidated balance sheets
(7,063)
(77,826)
Derivatives subject to enforceable master netting arrangement
0 
2,880 
Cash collateral pledged
$ 8,520 
$ 7,292 
Derivative Financial Instruments - Income Statement Effect of Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Derivative settlements, net
$ 667 
$ (21,949)
$ (24,250)
Other Income [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Derivative settlements, net
667 
(21,949)
(24,250)
Change in fair value
26,379 
59,895 
(15,150)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
(45,600)
11,849 
43,801 
Derivative market value and foreign currency transaction adjustments and derivative settlements, net - income (expense)
(18,554)
49,795 
4,401 
1:3 basis swaps [Member] |
Other Income [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Derivative settlements, net
(3,069)
1,493 
1,058 
Change in fair value
(8,224)
(2,938)
12,292 
Interest rate swaps - floor income hedges [Member] |
Other Income [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Derivative settlements, net
10,838 
(17,643)
(23,041)
Change in fair value
3,585 
64,111 
20,103 
Interest rate swap option - floor income hedges [Member] |
Other Income [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Change in fair value
(2,433)
(281)
(2,420)
Interest rate swaps - hybrid debt hedges [Member] |
Other Income [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Derivative settlements, net
(781)
(915)
(1,012)
Change in fair value
279 
304 
(295)
Interest Rate Cap [Member] |
Other Income [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Change in fair value
(893)
(419)
(1,365)
Cross-currency interest rate swaps [Member] |
Other Income [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Derivative settlements, net
(6,321)
(4,884)
(1,255)
Change in fair value
34,208 
(1,954)
(45,195)
Other [Member] |
Other Income [Member]
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
Change in fair value
$ (143)
$ 1,072 
$ 1,730 
Investments and Notes Receivable - Investments and Other Receivables Summary (Details) (USD $)
Dec. 31, 2017
Dec. 31, 2016
Investment Holdings [Line Items]
 
 
Investments and notes receivable
$ 240,538,000 
$ 254,144,000 
Available-for-sale investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Securities in continuous loss position less than 12 months
12,300,000 
 
Investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Fair value
80,902,000 
106,593,000 
Investments [Member] |
Available-for-sale investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
73,573,000 
98,980,000 
Gross unrealized gains
7,354,000 
8,210,000 
Gross unrealized losses
(25,000)
(702,000)
Fair value
80,902,000 
106,488,000 
Investments [Member] |
Available-for-sale investments [Member] |
Student Loan Asset-Backed and Other Debt Securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
71,943,000 
98,260,000 
Gross unrealized gains
5,056,000 
6,280,000 
Gross unrealized losses
(25,000)
(641,000)
Fair value
76,974,000 
103,899,000 
Investments [Member] |
Available-for-sale investments [Member] |
Equity securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
1,630,000 
720,000 
Gross unrealized gains
2,298,000 
1,930,000 
Gross unrealized losses
0 
(61,000)
Fair value
3,928,000 
2,589,000 
Investments [Member] |
Trading investments [Member] |
Equity securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Fair value
0 
105,000 
Miscellaneous Investments [Member] |
Venture Capital Funds [Member]
 
 
Investment Holdings [Line Items]
 
 
Other investments
84,752,000 
69,789,000 
Miscellaneous Investments [Member] |
Real Estate Investment [Member]
 
 
Investment Holdings [Line Items]
 
 
Other investments
49,464,000 
48,379,000 
Miscellaneous Investments [Member] |
Notes Receivable [Member]
 
 
Investment Holdings [Line Items]
 
 
Other investments
16,393,000 
17,031,000 
Miscellaneous Investments [Member] |
Tax liens and affordable housing investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Other investments
$ 9,027,000 
$ 12,352,000 
Investments and Notes Receivable - Realized and Unrealized Gains (Losses) on Investments (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Gain (Loss) on Investments [Line Items]
 
 
 
Investment gains (losses) included in other income
$ 2,514 
$ 2,773 
$ 143 
Available-for-sale Securities [Member]
 
 
 
Gain (Loss) on Investments [Line Items]
 
 
 
Gross realized gains
3,767 
3,099 
3,402 
Gross realized losses
(1,239)
(1,192)
(447)
Trading Securities [Member]
 
 
 
Gain (Loss) on Investments [Line Items]
 
 
 
Unrealized gains (losses), net
(14)
525 
(715)
Realized gains (losses), net
$ 0 
$ 341 
$ (2,097)
Business Combination - Acquisition Details (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 0 Months Ended
Jan. 1, 2016
Dec. 31, 2015
ALLO Communications [Member]
Dec. 31, 2017
ALLO Communications [Member]
Dec. 31, 2015
ALLO Communications [Member]
Dec. 31, 2015
Customer Relationships [Member]
ALLO Communications [Member]
Dec. 31, 2015
Trade Names [Member]
ALLO Communications [Member]
Dec. 31, 2017
ALLO Communications [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
Percentage of voting interests acquired
 
 
 
92.50% 
 
 
 
Consideration transferred
 
$ 46.25 
 
 
 
 
 
Ownership percentage sold
1.00% 
 
 
 
 
 
 
Proceeds from sale of variable interest entity
0.5 
 
 
 
 
 
 
Noncontrolling interest, ownership percentage
 
 
7.50% 
 
 
 
 
Noncontrolling Interest, minimum earn up percentage by noncontrolling owners
 
 
11.50% 
 
 
 
 
Maximum earn up percentage by noncontrolling owners
 
 
19.00% 
 
 
 
 
Compensation expense to be recognized over performance period
 
 
 
 
 
 
1.0 
Acquired intangible assets
 
 
 
11.4 
 
 
 
Acquired intangible asset useful life
 
12 years 
 
 
10 years 
15 years 
 
Finite-lived intangible assets acquired
 
 
 
 
6.3 
5.1 
 
Expected tax deductible goodwill
 
 
 
$ 21.1 
 
 
 
Business Combination - Schedule of Assets Acquired at Fair Value (Details) (USD $)
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Business Acquisition [Line Items]
 
 
 
Goodwill
$ 138,759,000 
$ 147,312,000 
$ 146,000,000 
ALLO Communications [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Cash and cash equivalents
 
 
334,000 
Restricted cash
 
 
850,000 
Accounts receivable
 
 
1,935,000 
Property and equipment
 
 
32,479,000 
Other assets
 
 
371,000 
Intangible assets
 
 
11,400,000 
Goodwill
 
 
21,112,000 
Other liabilities
 
 
(4,587,000)
Bonds and notes payable
 
 
(13,904,000)
Net assets acquired
 
 
50,000,000 
Minority interest
 
 
(3,750,000)
Total consideration paid by the Company
 
 
$ 46,250,000 
Intangible Assets - Schedule of Intangible Assets (Details) (USD $)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
 
 
 
Intangible asset useful life
124 months 
 
 
Finite lived intangible assets
$ 38,427,000 
$ 47,813,000 
 
Amortization of intangible assets
9,400,000 
11,600,000 
9,800,000 
Customer Relationships [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Intangible asset useful life
160 months 
 
 
Finite lived intangible assets
24,168,000 
28,335,000 
 
Accumulated amortization
12,715,000 
8,548,000 
 
Trade Names [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Intangible asset useful life
89 months 
 
 
Finite lived intangible assets
9,074,000 
9,919,000 
 
Accumulated amortization
2,498,000 
1,653,000 
 
Computer Software [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Intangible asset useful life
14 months 
 
 
Finite lived intangible assets
4,958,000 
9,296,000 
 
Accumulated amortization
10,013,000 
5,675,000 
 
Noncompete Agreements [Member]
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
Intangible asset useful life
77 months 
 
 
Finite lived intangible assets
227,000 
263,000 
 
Accumulated amortization
$ 127,000 
$ 91,000 
 
Intangible Assets - Schedule of Intangible Assets Future Amortization Expense (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Intangible Assets, Net (Excluding Goodwill) [Abstract]
 
 
2018
$ 10,428 
 
2019
6,990 
 
2020
3,789 
 
2021
3,077 
 
2022
2,474 
 
2023 and thereafter
11,669 
 
Finite lived intangible assets
$ 38,427 
$ 47,813 
Goodwill - Schedule of Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 12 Months Ended
Nov. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Goodwill [Line Items]
 
 
 
Goodwill, begining balance
 
$ 147,312 
$ 146,000 
Goodwill, acquired during period
 
 
1,312 
Impairment expense
(3,600)
(3,626)
 
Sale of Peterson's
 
(4,927)
 
Goodwill, ending balance
 
138,759 
147,312 
Student Loan and Guaranty Servicing [Member]
 
 
 
Goodwill [Line Items]
 
 
 
Goodwill, begining balance
 
8,596 
8,596 
Goodwill, acquired during period
 
 
0 
Impairment expense
 
0 
 
Sale of Peterson's
 
0 
 
Goodwill, ending balance
 
8,596 
8,596 
Tuition Payment Processing and Campus Commerce [Member]
 
 
 
Goodwill [Line Items]
 
 
 
Goodwill, begining balance
 
67,168 
67,168 
Goodwill, acquired during period
 
 
0 
Impairment expense
 
0 
 
Sale of Peterson's
 
0 
 
Goodwill, ending balance
 
67,168 
67,168 
Communications [Member]
 
 
 
Goodwill [Line Items]
 
 
 
Goodwill, begining balance
 
21,112 
19,800 
Goodwill, acquired during period
 
 
1,312 
Impairment expense
 
0 
 
Sale of Peterson's
 
0 
 
Goodwill, ending balance
 
21,112 
21,112 
Asset Generation and Management [Member]
 
 
 
Goodwill [Line Items]
 
 
 
Goodwill, begining balance
 
41,883 
41,883 
Goodwill, acquired during period
 
 
0 
Impairment expense
 
0 
 
Sale of Peterson's
 
0 
 
Goodwill, ending balance
 
41,883 
41,883 
Corporate and Other Activities [Member]
 
 
 
Goodwill [Line Items]
 
 
 
Goodwill, begining balance
 
8,553 
8,553 
Goodwill, acquired during period
 
 
0 
Impairment expense
 
(3,626)
 
Sale of Peterson's
 
(4,927)
 
Goodwill, ending balance
 
$ 0 
$ 8,553 
Goodwill - Narrative (Details) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 12 Months Ended
Dec. 31, 2017
Nov. 30, 2017
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Goodwill [Abstract]
 
 
 
 
 
Impairment expense
 
$ 3,600 
$ 3,626 
 
 
Proceeds from sale of business, net
$ 5,000 
 
$ 4,511 
$ 0 
$ 0 
Property and Equipment (Details) (USD $)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Property, Plant and Equipment [Line Items]
 
 
 
Property and equipment, net
$ 248,051,000 
$ 123,786,000 
 
Depreciation expense
30,200,000 
22,400,000 
16,500,000 
Non-Communications [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
182,248,000 
148,440,000 
 
Accumulated depreciation
105,017,000 
91,285,000 
 
Property and equipment, net
77,231,000 
57,155,000 
 
Non-Communications [Member] |
Computer Equipment and Software [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
124,708,000 
97,317,000 
 
Non-Communications [Member] |
Computer Equipment and Software [Member] |
Minimum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
1 year 
 
 
Non-Communications [Member] |
Computer Equipment and Software [Member] |
Maximum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
5 years 
 
 
Non-Communications [Member] |
Office Furniture and Equipment [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
15,210,000 
12,344,000 
 
Non-Communications [Member] |
Office Furniture and Equipment [Member] |
Minimum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
3 years 
 
 
Non-Communications [Member] |
Office Furniture and Equipment [Member] |
Maximum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
7 years 
 
 
Non-Communications [Member] |
Building and building improvements [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
24,003,000 
13,363,000 
 
Non-Communications [Member] |
Building and building improvements [Member] |
Minimum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
5 years 
 
 
Non-Communications [Member] |
Building and building improvements [Member] |
Maximum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
39 years 
 
 
Non-Communications [Member] |
Transportation Equipment [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
3,813,000 
3,809,000 
 
Non-Communications [Member] |
Transportation Equipment [Member] |
Minimum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
4 years 
 
 
Non-Communications [Member] |
Transportation Equipment [Member] |
Maximum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
10 years 
 
 
Non-Communications [Member] |
Leasehold Improvements [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
7,759,000 
3,579,000 
 
Non-Communications [Member] |
Leasehold Improvements [Member] |
Minimum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
5 years 
 
 
Non-Communications [Member] |
Leasehold Improvements [Member] |
Maximum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
15 years 
 
 
Non-Communications [Member] |
Land [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
2,628,000 
1,682,000 
 
Non-Communications [Member] |
Construction in progress [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
4,127,000 
16,346,000 
 
Communications [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
186,398,000 
71,297,000 
 
Accumulated depreciation
15,578,000 
4,666,000 
 
Property and equipment, net
170,820,000 
66,631,000 
 
Communications [Member] |
Computer Equipment and Software [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
3,790,000 
2,026,000 
 
Communications [Member] |
Computer Equipment and Software [Member] |
Minimum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
1 year 
 
 
Communications [Member] |
Computer Equipment and Software [Member] |
Maximum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
5 years 
 
 
Communications [Member] |
Transportation Equipment [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
5,759,000 
2,966,000 
 
Communications [Member] |
Transportation Equipment [Member] |
Minimum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
4 years 
 
 
Communications [Member] |
Transportation Equipment [Member] |
Maximum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
10 years 
 
 
Communications [Member] |
Land [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
70,000 
70,000 
 
Communications [Member] |
Construction in progress [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
11,620,000 
12,537,000 
 
Communications [Member] |
Network plant and fiber [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
138,122,000 
40,844,000 
 
Communications [Member] |
Network plant and fiber [Member] |
Minimum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
5 years 
 
 
Communications [Member] |
Network plant and fiber [Member] |
Maximum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
15 years 
 
 
Communications [Member] |
Central office [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
10,754,000 
6,448,000 
 
Communications [Member] |
Central office [Member] |
Minimum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
5 years 
 
 
Communications [Member] |
Central office [Member] |
Maximum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
15 years 
 
 
Communications [Member] |
Customer located property [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
13,767,000 
5,138,000 
 
Communications [Member] |
Customer located property [Member] |
Minimum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
5 years 
 
 
Communications [Member] |
Customer located property [Member] |
Maximum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
10 years 
 
 
Communications [Member] |
Other [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Property and plant gross
$ 2,516,000 
$ 1,268,000 
 
Communications [Member] |
Other [Member] |
Minimum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
1 year 
 
 
Communications [Member] |
Other [Member] |
Maximum [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Useful life
39 years 
 
 
Shareholders' Equity - Classes of Common Stock (Details)
12 Months Ended
Dec. 31, 2017
Common Class B [Member]
 
Class of Stock [Line Items]
 
Votes per common share
10 
Common Class A [Member]
 
Class of Stock [Line Items]
 
Votes per common share
1 
Shareholders' Equity - Schedule of Stock Repurchases (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Class of Stock [Line Items]
 
 
 
Repurchase shares authorized (in shares)
5,000,000 
 
 
Remaining number of shares authorized to be repurchased (in shares)
3,100,000 
 
 
Total shares repurchased (in shares)
1,473,054 
2,038,368 
2,449,159 
Purchase price
$ 68,896 
$ 69,091 
$ 96,169 
Average price of shares repurchased (in dollars per share)
$ 46.77 
$ 33.90 
$ 39.27 
Earnings per Common Share - Schedule of Earnings per Common Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$ 48,100 
$ 46,303 
$ 28,737 
$ 50,026 
$ 98,346 
$ 84,294 
$ 26,150 
$ 47,961 
$ 173,166 
$ 256,751 
$ 267,979 
Weighted average common shares outstanding - basic and diluted (in shares)
 
 
 
 
 
 
 
 
41,791,941 
42,669,070 
45,529,340 
Earnings per share - basic and diluted (in dollars per share)
$ 1.17 
$ 1.11 
$ 0.68 
$ 1.18 
$ 2.32 
$ 1.98 
$ 0.61 
$ 1.11 
$ 4.14 
$ 6.02 
$ 5.89 
Antidilutive securities excluded from computation of earnings per share (in shares)
 
 
 
 
 
 
 
 
0 
0 
0 
Unvested restricted stock shareholders [Member]
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
1,724 
2,688 
2,850 
Weighted average common shares outstanding - basic and diluted (in shares)
 
 
 
 
 
 
 
 
415,977 
446,735 
484,141 
Earnings per share - basic and diluted (in dollars per share)
 
 
 
 
 
 
 
 
$ 4.14 
$ 6.02 
$ 5.89 
Common shareholders [Member]
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
$ 171,442 
$ 254,063 
$ 265,129 
Weighted average common shares outstanding - basic and diluted (in shares)
 
 
 
 
 
 
 
 
41,375,964 
42,222,335 
45,045,199 
Earnings per share - basic and diluted (in dollars per share)
 
 
 
 
 
 
 
 
$ 4.14 
$ 6.02 
$ 5.89 
Shares Issued - Deferred [Member]
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Non employee director stock, cumulative deferred shares (in shares)
171,519 
 
 
 
 
 
 
 
171,519 
 
 
Income Taxes - Narrative (Details) (USD $)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income Tax Contingency [Line Items]
 
 
 
Unrecognized tax benefits
$ 28,400,000 
$ 28,004,000 
$ 27,688,000 
Tax benefits which would favorable affect effective tax rate
22,400,000 
 
 
Anticipated uncertain tax position adjustment
7,100,000 
 
 
Income tax penalties and interest accrued
4,500,000 
3,500,000 
 
Interest on income taxes expense
800,000 
300,000 
1,200,000 
Income taxes receivable
42,400,000 
13,000,000 
 
Favorably affect the effective tax rate [Member]
 
 
 
Income Tax Contingency [Line Items]
 
 
 
Anticipated uncertain tax position adjustment
$ 5,600,000 
 
 
Income Taxes - Schedule of Unrecognized Tax Benefits (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
 
 
Gross balance - beginning of year
$ 28,004 
$ 27,688 
Additions based on tax positions of prior years
145 
904 
Additions based on tax positions related to the current year
2,903 
4,347 
Settlements with taxing authorities
0 
0 
Reductions for tax positions of prior years
(356)
(3,088)
Reductions based on tax positions related to the current year
0 
0 
Reductions due to lapse of applicable statutes of limitations
(2,275)
(1,847)
Gross balance - end of year
$ 28,400 
$ 28,004 
Income Taxes - Schedule of Provision for Income Tax Expense (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Current:
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
$ 65,196 
$ 111,302 
$ 140,778 
State
 
 
 
 
 
 
 
 
1,246 
3,019 
4,530 
Foreign
 
 
 
 
 
 
 
 
(35)
(13)
23 
Total current provision
 
 
 
 
 
 
 
 
66,407 
114,308 
145,331 
Deferred:
 
 
 
 
 
 
 
 
 
 
 
Federal
 
 
 
 
 
 
 
 
(8,270)
25,423 
3,572 
State
 
 
 
 
 
 
 
 
6,618 
1,976 
3,875 
Foreign
 
 
 
 
 
 
 
 
108 
(394)
(398)
Total deferred provision
 
 
 
 
 
 
 
 
(1,544)
27,005 
7,049 
Provision for income tax expense
$ (5,486)
$ 25,562 
$ 16,032 
$ 28,755 
$ 54,128 
$ 47,715 
$ 15,036 
$ 24,433 
$ 64,863 
$ 141,313 
$ 152,380 
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 12 Months Ended
Dec. 22, 2017
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Income Tax Disclosure [Abstract]
 
 
 
 
Tax expense at federal rate
 
35.00% 
35.00% 
35.00% 
Increase (decrease) resulting from:
 
 
 
 
Reduction of statutory federal rate (a)
 
(8.00%)
0.00% 
0.00% 
State tax, net of federal income tax benefit
 
1.60% 
1.10% 
1.00% 
Provision for uncertain federal and state tax matters
 
0.00% 
0.00% 
0.90% 
Tax credits
 
(1.30%)
(0.60%)
(0.50%)
Other
 
0.00% 
0.00% 
(0.10%)
Effective tax rate
 
27.30% 
35.50% 
36.30% 
Income tax benefit as result of the Tax Cuts and Jobs Act of 2017
$ 19.3 
$ 19.3 
 
 
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Deferred tax assets:
 
 
Student loans
$ 13,532 
$ 20,980 
Deferred revenue
3,246 
2,699 
Securitizations
2,970 
5,675 
Intangible assets
2,899 
4,821 
Accrued expenses
2,246 
3,533 
Stock compensation
1,744 
2,948 
Total gross deferred tax assets
26,637 
40,656 
Less valuation allowance
(254)
(264)
Net deferred tax assets
26,383 
40,392 
Deferred tax liabilities:
 
 
Basis in certain derivative contracts
23,051 
46,636 
Partnership basis
21,474 
4,976 
Loan origination services
8,001 
13,019 
Depreciation
4,958 
5,128 
Debt repurchases
3,856 
12,457 
Debt and equity investments
1,767 
3,246 
Other
823 
360 
Total gross deferred tax liabilities
63,930 
85,822 
Net deferred tax liability
$ (37,547)
$ (45,430)
Segment Reporting (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
operating_segment
Dec. 31, 2016
Dec. 31, 2015
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Number of operating segments
 
 
 
 
 
 
 
 
4 
 
 
Total interest income
 
 
 
 
 
 
 
 
$ 770,426 
$ 760,746 
$ 734,109 
Interest expense
 
 
 
 
 
 
 
 
465,188 
388,183 
302,210 
Net interest income
73,235 
75,237 
79,842 
76,925 
78,960 
99,795 
92,200 
101,609 
305,238 
372,563 
431,899 
Less provision for loan losses
3,750 
6,700 
3,000 
1,000 
3,000 
6,000 
2,000 
2,500 
14,450 
13,500 
10,150 
Net interest income (loss) after provision for loan losses
69,485 
68,537 
76,842 
75,925 
75,960 
93,795 
90,200 
99,109 
290,788 
359,063 
421,749 
Other income:
 
 
 
 
 
 
 
 
 
 
 
Loan systems and servicing revenue
55,921 
55,950 
56,899 
54,229 
53,764 
54,350 
54,402 
52,330 
223,000 
214,846 
239,858 
Intersegment servicing revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Tuition payment processing, school information, and campus commerce revenue
32,457 
35,450 
34,224 
43,620 
30,519 
33,071 
30,483 
38,657 
145,751 
132,730 
120,365 
Communications revenue
8,122 
6,751 
5,719 
5,106 
4,492 
4,343 
4,478 
4,346 
25,700 
17,659 
0 
Enrollment services revenue
 
 
 
 
0 
0 
0 
4,326 
0 
4,326 
51,073 
Other income
7,952 
19,756 
12,485 
12,632 
15,218 
15,150 
9,765 
13,796 
52,826 
53,929 
47,262 
Gain on sale of loans and debt repurchases, net
(2,635)
116 
442 
4,980 
5,720 
2,160 
0 
101 
2,902 
7,981 
5,153 
Derivative settlements, net
 
 
 
 
 
 
 
 
667 
(21,949)
(24,250)
Derivative market value and foreign currency transaction adjustments, net
 
 
 
 
 
 
 
 
(19,221)
71,744 
28,651 
Total other income
 
 
 
 
 
 
 
 
431,625 
481,266 
468,112 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Salaries and benefits
81,201 
74,193 
74,628 
71,863 
68,017 
63,743 
60,923 
63,242 
301,885 
255,924 
247,914 
Depreciation and amortization
11,854 
10,051 
9,038 
8,598 
9,116 
8,994 
8,183 
7,640 
39,541 
33,933 
26,343 
Loan servicing fees
3,064 
8,017 
5,628 
6,025 
5,726 
5,880 
7,216 
6,928 
22,734 
25,750 
30,213 
Cost to provide communications services
3,160 
2,632 
2,203 
1,954 
1,697 
1,784 
1,681 
1,703 
9,950 
6,866 
0 
Cost to provide enrollment services
 
 
 
 
 
 
 
 
 
3,623 
41,733 
Other expenses
38,809 
29,743 
26,521 
26,547 
31,245 
26,391 
29,409 
28,376 
121,619 
115,419 
123,014 
Intersegment expenses, net
 
 
 
 
 
 
 
 
0 
0 
0 
Total operating expenses
 
 
 
 
 
 
 
 
495,729 
441,515 
469,217 
Income (loss) before income taxes
 
 
 
 
 
 
 
 
226,684 
398,814 
420,644 
Income tax (expense) benefit
5,486 
(25,562)
(16,032)
(28,755)
(54,128)
(47,715)
(15,036)
(24,433)
(64,863)
(141,313)
(152,380)
Net income (loss)
45,714 
43,535 
24,651 
47,920 
98,931 
84,363 
26,178 
48,029 
161,821 
257,501 
268,264 
Net loss (income) attributable to noncontrolling interests
2,386 
2,768 
4,086 
2,106 
(585)
(69)
(28)
(68)
11,345 
(750)
(285)
Net income attributable to Nelnet, Inc.
48,100 
46,303 
28,737 
50,026 
98,346 
84,294 
26,150 
47,961 
173,166 
256,751 
267,979 
Total assets
23,964,435 
 
 
 
27,193,095 
 
 
 
23,964,435 
27,193,095 
30,419,144 
Operating Segments [Member] |
Loan Systems and Servicing [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total interest income
 
 
 
 
 
 
 
 
513 
111 
49 
Interest expense
 
 
 
 
 
 
 
 
3 
0 
0 
Net interest income
 
 
 
 
 
 
 
 
510 
111 
49 
Less provision for loan losses
 
 
 
 
 
 
 
 
0 
0 
0 
Net interest income (loss) after provision for loan losses
 
 
 
 
 
 
 
 
510 
111 
49 
Other income:
 
 
 
 
 
 
 
 
 
 
 
Loan systems and servicing revenue
 
 
 
 
 
 
 
 
223,000 
214,846 
239,858 
Intersegment servicing revenue
 
 
 
 
 
 
 
 
41,674 
45,381 
50,354 
Tuition payment processing, school information, and campus commerce revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Communications revenue
 
 
 
 
 
 
 
 
0 
0 
 
Enrollment services revenue
 
 
 
 
 
 
 
 
 
0 
0 
Other income
 
 
 
 
 
 
 
 
0 
0 
0 
Gain on sale of loans and debt repurchases, net
 
 
 
 
 
 
 
 
0 
0 
0 
Derivative settlements, net
 
 
 
 
 
 
 
 
0 
0 
0 
Derivative market value and foreign currency transaction adjustments, net
 
 
 
 
 
 
 
 
0 
0 
0 
Total other income
 
 
 
 
 
 
 
 
264,674 
260,227 
290,212 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Salaries and benefits
 
 
 
 
 
 
 
 
156,256 
132,072 
134,635 
Depreciation and amortization
 
 
 
 
 
 
 
 
2,864 
1,980 
1,931 
Loan servicing fees
 
 
 
 
 
 
 
 
0 
0 
0 
Cost to provide communications services
 
 
 
 
 
 
 
 
0 
0 
 
Cost to provide enrollment services
 
 
 
 
 
 
 
 
 
0 
0 
Other expenses
 
 
 
 
 
 
 
 
39,126 
40,715 
57,799 
Intersegment expenses, net
 
 
 
 
 
 
 
 
31,871 
24,204 
29,706 
Total operating expenses
 
 
 
 
 
 
 
 
230,117 
198,971 
224,071 
Income (loss) before income taxes
 
 
 
 
 
 
 
 
35,067 
61,367 
66,190 
Income tax (expense) benefit
 
 
 
 
 
 
 
 
(18,128)
(23,319)
(25,153)
Net income (loss)
 
 
 
 
 
 
 
 
16,939 
38,048 
41,037 
Net loss (income) attributable to noncontrolling interests
 
 
 
 
 
 
 
 
12,640 
0 
20 
Net income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
29,579 
38,048 
41,057 
Total assets
122,330 
 
 
 
55,469 
 
 
 
122,330 
55,469 
80,459 
Operating Segments [Member] |
Tuition Payment Processing and Campus Commerce [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total interest income
 
 
 
 
 
 
 
 
17 
9 
3 
Interest expense
 
 
 
 
 
 
 
 
0 
0 
0 
Net interest income
 
 
 
 
 
 
 
 
17 
9 
3 
Less provision for loan losses
 
 
 
 
 
 
 
 
0 
0 
0 
Net interest income (loss) after provision for loan losses
 
 
 
 
 
 
 
 
17 
9 
3 
Other income:
 
 
 
 
 
 
 
 
 
 
 
Loan systems and servicing revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Intersegment servicing revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Tuition payment processing, school information, and campus commerce revenue
 
 
 
 
 
 
 
 
145,751 
132,730 
120,365 
Communications revenue
 
 
 
 
 
 
 
 
0 
0 
 
Enrollment services revenue
 
 
 
 
 
 
 
 
 
0 
0 
Other income
 
 
 
 
 
 
 
 
0 
0 
(925)
Gain on sale of loans and debt repurchases, net
 
 
 
 
 
 
 
 
0 
0 
0 
Derivative settlements, net
 
 
 
 
 
 
 
 
0 
0 
0 
Derivative market value and foreign currency transaction adjustments, net
 
 
 
 
 
 
 
 
0 
0 
0 
Total other income
 
 
 
 
 
 
 
 
145,751 
132,730 
119,440 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Salaries and benefits
 
 
 
 
 
 
 
 
69,500 
62,329 
55,523 
Depreciation and amortization
 
 
 
 
 
 
 
 
9,424 
10,595 
8,992 
Loan servicing fees
 
 
 
 
 
 
 
 
0 
0 
0 
Cost to provide communications services
 
 
 
 
 
 
 
 
0 
0 
 
Cost to provide enrollment services
 
 
 
 
 
 
 
 
 
0 
0 
Other expenses
 
 
 
 
 
 
 
 
19,138 
18,486 
15,161 
Intersegment expenses, net
 
 
 
 
 
 
 
 
9,079 
6,615 
8,617 
Total operating expenses
 
 
 
 
 
 
 
 
107,141 
98,025 
88,293 
Income (loss) before income taxes
 
 
 
 
 
 
 
 
38,627 
34,714 
31,150 
Income tax (expense) benefit
 
 
 
 
 
 
 
 
(14,678)
(13,191)
(11,838)
Net income (loss)
 
 
 
 
 
 
 
 
23,949 
21,523 
19,312 
Net loss (income) attributable to noncontrolling interests
 
 
 
 
 
 
 
 
0 
0 
0 
Net income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
23,949 
21,523 
19,312 
Total assets
250,351 
 
 
 
230,283 
 
 
 
250,351 
230,283 
229,615 
Operating Segments [Member] |
Communications [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total interest income
 
 
 
 
 
 
 
 
3 
1 
0 
Interest expense
 
 
 
 
 
 
 
 
5,427 
1,271 
0 
Net interest income
 
 
 
 
 
 
 
 
(5,424)
(1,270)
0 
Less provision for loan losses
 
 
 
 
 
 
 
 
0 
0 
0 
Net interest income (loss) after provision for loan losses
 
 
 
 
 
 
 
 
(5,424)
(1,270)
0 
Other income:
 
 
 
 
 
 
 
 
 
 
 
Loan systems and servicing revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Intersegment servicing revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Tuition payment processing, school information, and campus commerce revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Communications revenue
 
 
 
 
 
 
 
 
25,700 
17,659 
 
Enrollment services revenue
 
 
 
 
 
 
 
 
 
0 
0 
Other income
 
 
 
 
 
 
 
 
0 
0 
0 
Gain on sale of loans and debt repurchases, net
 
 
 
 
 
 
 
 
0 
0 
0 
Derivative settlements, net
 
 
 
 
 
 
 
 
0 
0 
0 
Derivative market value and foreign currency transaction adjustments, net
 
 
 
 
 
 
 
 
0 
0 
0 
Total other income
 
 
 
 
 
 
 
 
25,700 
17,659 
0 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Salaries and benefits
 
 
 
 
 
 
 
 
14,947 
7,649 
0 
Depreciation and amortization
 
 
 
 
 
 
 
 
11,835 
6,060 
0 
Loan servicing fees
 
 
 
 
 
 
 
 
0 
0 
0 
Cost to provide communications services
 
 
 
 
 
 
 
 
9,950 
6,866 
 
Cost to provide enrollment services
 
 
 
 
 
 
 
 
 
0 
0 
Other expenses
 
 
 
 
 
 
 
 
8,074 
4,370 
0 
Intersegment expenses, net
 
 
 
 
 
 
 
 
2,101 
958 
0 
Total operating expenses
 
 
 
 
 
 
 
 
46,907 
25,903 
0 
Income (loss) before income taxes
 
 
 
 
 
 
 
 
(26,631)
(9,514)
0 
Income tax (expense) benefit
 
 
 
 
 
 
 
 
10,120 
3,615 
0 
Net income (loss)
 
 
 
 
 
 
 
 
(16,511)
(5,899)
0 
Net loss (income) attributable to noncontrolling interests
 
 
 
 
 
 
 
 
0 
0 
0 
Net income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
(16,511)
(5,899)
0 
Total assets
214,336 
 
 
 
103,104 
 
 
 
214,336 
103,104 
68,760 
Operating Segments [Member] |
Asset Generation and Management [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total interest income
 
 
 
 
 
 
 
 
764,225 
754,788 
728,199 
Interest expense
 
 
 
 
 
 
 
 
464,256 
385,913 
297,625 
Net interest income
 
 
 
 
 
 
 
 
299,969 
368,875 
430,574 
Less provision for loan losses
 
 
 
 
 
 
 
 
14,450 
13,500 
10,150 
Net interest income (loss) after provision for loan losses
 
 
 
 
 
 
 
 
285,519 
355,375 
420,424 
Other income:
 
 
 
 
 
 
 
 
 
 
 
Loan systems and servicing revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Intersegment servicing revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Tuition payment processing, school information, and campus commerce revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Communications revenue
 
 
 
 
 
 
 
 
0 
0 
 
Enrollment services revenue
 
 
 
 
 
 
 
 
 
0 
0 
Other income
 
 
 
 
 
 
 
 
13,424 
15,709 
15,939 
Gain on sale of loans and debt repurchases, net
 
 
 
 
 
 
 
 
(1,567)
5,846 
2,034 
Derivative settlements, net
 
 
 
 
 
 
 
 
1,448 
(21,034)
(23,238)
Derivative market value and foreign currency transaction adjustments, net
 
 
 
 
 
 
 
 
(19,357)
70,368 
27,216 
Total other income
 
 
 
 
 
 
 
 
(6,052)
70,889 
21,951 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Salaries and benefits
 
 
 
 
 
 
 
 
1,548 
1,985 
2,172 
Depreciation and amortization
 
 
 
 
 
 
 
 
0 
0 
0 
Loan servicing fees
 
 
 
 
 
 
 
 
22,734 
25,750 
30,213 
Cost to provide communications services
 
 
 
 
 
 
 
 
0 
0 
 
Cost to provide enrollment services
 
 
 
 
 
 
 
 
 
0 
0 
Other expenses
 
 
 
 
 
 
 
 
3,900 
6,005 
5,083 
Intersegment expenses, net
 
 
 
 
 
 
 
 
42,830 
46,494 
50,899 
Total operating expenses
 
 
 
 
 
 
 
 
71,012 
80,234 
88,367 
Income (loss) before income taxes
 
 
 
 
 
 
 
 
208,455 
346,030 
354,008 
Income tax (expense) benefit
 
 
 
 
 
 
 
 
(79,213)
(131,492)
(134,522)
Net income (loss)
 
 
 
 
 
 
 
 
129,242 
214,538 
219,486 
Net loss (income) attributable to noncontrolling interests
 
 
 
 
 
 
 
 
0 
0 
0 
Net income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
129,242 
214,538 
219,486 
Total assets
22,910,974 
 
 
 
26,378,467 
 
 
 
22,910,974 
26,378,467 
29,634,280 
Corporate and Other Activities [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total interest income
 
 
 
 
 
 
 
 
13,643 
10,913 
7,686 
Interest expense
 
 
 
 
 
 
 
 
3,477 
6,076 
6,413 
Net interest income
 
 
 
 
 
 
 
 
10,166 
4,837 
1,273 
Less provision for loan losses
 
 
 
 
 
 
 
 
0 
0 
0 
Net interest income (loss) after provision for loan losses
 
 
 
 
 
 
 
 
10,166 
4,837 
1,273 
Other income:
 
 
 
 
 
 
 
 
 
 
 
Loan systems and servicing revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Intersegment servicing revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Tuition payment processing, school information, and campus commerce revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Communications revenue
 
 
 
 
 
 
 
 
0 
0 
 
Enrollment services revenue
 
 
 
 
 
 
 
 
 
4,326 
51,073 
Other income
 
 
 
 
 
 
 
 
39,402 
38,221 
32,248 
Gain on sale of loans and debt repurchases, net
 
 
 
 
 
 
 
 
4,469 
2,135 
3,119 
Derivative settlements, net
 
 
 
 
 
 
 
 
(781)
(915)
(1,012)
Derivative market value and foreign currency transaction adjustments, net
 
 
 
 
 
 
 
 
136 
1,376 
1,435 
Total other income
 
 
 
 
 
 
 
 
43,226 
45,143 
86,863 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Salaries and benefits
 
 
 
 
 
 
 
 
59,633 
51,889 
55,585 
Depreciation and amortization
 
 
 
 
 
 
 
 
15,418 
15,298 
15,420 
Loan servicing fees
 
 
 
 
 
 
 
 
0 
0 
0 
Cost to provide communications services
 
 
 
 
 
 
 
 
0 
0 
 
Cost to provide enrollment services
 
 
 
 
 
 
 
 
 
3,623 
41,733 
Other expenses
 
 
 
 
 
 
 
 
51,381 
45,843 
44,971 
Intersegment expenses, net
 
 
 
 
 
 
 
 
(44,208)
(32,889)
(38,868)
Total operating expenses
 
 
 
 
 
 
 
 
82,224 
83,764 
118,841 
Income (loss) before income taxes
 
 
 
 
 
 
 
 
(28,832)
(33,784)
(30,705)
Income tax (expense) benefit
 
 
 
 
 
 
 
 
37,036 
23,074 
19,132 
Net income (loss)
 
 
 
 
 
 
 
 
8,204 
(10,710)
(11,573)
Net loss (income) attributable to noncontrolling interests
 
 
 
 
 
 
 
 
(1,295)
(750)
(305)
Net income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
6,909 
(11,460)
(11,878)
Total assets
877,859 
 
 
 
682,459 
 
 
 
877,859 
682,459 
624,953 
Eliminations [Member]
 
 
 
 
 
 
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Total interest income
 
 
 
 
 
 
 
 
(7,976)
(5,076)
(1,828)
Interest expense
 
 
 
 
 
 
 
 
(7,976)
(5,076)
(1,828)
Net interest income
 
 
 
 
 
 
 
 
0 
0 
0 
Less provision for loan losses
 
 
 
 
 
 
 
 
0 
0 
0 
Net interest income (loss) after provision for loan losses
 
 
 
 
 
 
 
 
0 
0 
0 
Other income:
 
 
 
 
 
 
 
 
 
 
 
Loan systems and servicing revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Intersegment servicing revenue
 
 
 
 
 
 
 
 
(41,674)
(45,381)
(50,354)
Tuition payment processing, school information, and campus commerce revenue
 
 
 
 
 
 
 
 
0 
0 
0 
Communications revenue
 
 
 
 
 
 
 
 
0 
0 
 
Enrollment services revenue
 
 
 
 
 
 
 
 
 
0 
0 
Other income
 
 
 
 
 
 
 
 
0 
0 
0 
Gain on sale of loans and debt repurchases, net
 
 
 
 
 
 
 
 
0 
0 
0 
Derivative settlements, net
 
 
 
 
 
 
 
 
0 
0 
0 
Derivative market value and foreign currency transaction adjustments, net
 
 
 
 
 
 
 
 
0 
0 
0 
Total other income
 
 
 
 
 
 
 
 
(41,674)
(45,381)
(50,354)
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
Salaries and benefits
 
 
 
 
 
 
 
 
0 
0 
0 
Depreciation and amortization
 
 
 
 
 
 
 
 
0 
0 
0 
Loan servicing fees
 
 
 
 
 
 
 
 
0 
0 
0 
Cost to provide communications services
 
 
 
 
 
 
 
 
0 
0 
 
Cost to provide enrollment services
 
 
 
 
 
 
 
 
 
0 
0 
Other expenses
 
 
 
 
 
 
 
 
0 
0 
0 
Intersegment expenses, net
 
 
 
 
 
 
 
 
(41,674)
(45,381)
(50,354)
Total operating expenses
 
 
 
 
 
 
 
 
(41,674)
(45,381)
(50,354)
Income (loss) before income taxes
 
 
 
 
 
 
 
 
0 
0 
0 
Income tax (expense) benefit
 
 
 
 
 
 
 
 
0 
0 
0 
Net income (loss)
 
 
 
 
 
 
 
 
0 
0 
0 
Net loss (income) attributable to noncontrolling interests
 
 
 
 
 
 
 
 
0 
0 
0 
Net income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
0 
0 
0 
Total assets
$ (411,415)
 
 
 
$ (256,687)
 
 
 
$ (411,415)
$ (256,687)
$ (218,923)
Major Customer (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2017
Concentration Risk Department of Education [Member]
Dec. 31, 2016
Concentration Risk Department of Education [Member]
Dec. 31, 2015
Concentration Risk Department of Education [Member]
Feb. 7, 2018
Subsequent Event [Member]
Great Lakes Educational Loan Services [Member]
Concentration Risk [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loan systems and servicing revenue
$ 55,921 
$ 55,950 
$ 56,899 
$ 54,229 
$ 53,764 
$ 54,350 
$ 54,402 
$ 52,330 
$ 223,000 
$ 214,846 
$ 239,858 
$ 155,800 
$ 151,700 
$ 133,200 
 
Percentage of voting interests acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
Leases - Schedule of future Minimum Lease Payments for Operating Leases (Details) (USD $)
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Leases [Abstract]
 
 
 
2018
$ 5,277,000 
 
 
2019
4,337,000 
 
 
2020
3,628,000 
 
 
2021
2,002,000 
 
 
2022
1,649,000 
 
 
2023 and thereafter
4,857,000 
 
 
Total minimum lease payments
21,750,000 
 
 
Rent expense
$ 5,700,000 
$ 6,000,000 
$ 5,500,000 
Defined Contribution Benefit Plan Defined Contribution Benefit Plan (Details) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Defined Contribution Benefit Plan [Line Items]
 
 
 
Maximum annual employee contribution percentage
100.00% 
 
 
Defined contribution plan cost
$ 6.2 
$ 5.1 
$ 4.6 
Employer Match on Employee Contributions up to Three Percent of Employee Salary [Member]
 
 
 
Defined Contribution Benefit Plan [Line Items]
 
 
 
Employer match percentage
100.00% 
 
 
Employer Match on Employee Contributions Between Three and Five Percent of Employee Salary [Member]
 
 
 
Defined Contribution Benefit Plan [Line Items]
 
 
 
Employer match percentage
50.00% 
 
 
Maximum Employee Contribution Percentage Eligible for 100 Percent Employer Match [Member]
 
 
 
Defined Contribution Benefit Plan [Line Items]
 
 
 
Maximum annual employee contribution percentage
3.00% 
 
 
Maximum Employee Contribution Percentage Eligible for 50 Percent Employer Match After 100 Percent Employer Match [Member]
 
 
 
Defined Contribution Benefit Plan [Line Items]
 
 
 
Maximum annual employee contribution percentage
2.00% 
 
 
Stock Based Compensation Plans - Restricted Stock and Employee Share Purchase Plan (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Restricted Stock Activity
 
 
 
Discount from market price as of purchase date
15.00% 
 
 
Restricted Stock Plan [Member]
 
 
 
Restricted Stock Activity
 
 
 
Non-vested shares at beginning of year (in shares)
447,380 
471,597 
499,463 
Granted (in shares)
107,237 
123,181 
126,946 
Vested (in shares)
(131,988)
(113,507)
(108,424)
Canceled (in shares)
(24,419)
(33,891)
(46,388)
Non-vested shares at end of year (in shares)
398,210 
447,380 
471,597 
Share based compensation expense
$ 8,148 
 
 
Employee Share Purchase Plan [Member]
 
 
 
Restricted Stock Activity
 
 
 
Allocated share-based compensation expense
197 
287 
147 
Shares issued (in shares)
16,989 
25,551 
23,912 
Year one [Member] |
Restricted Stock Plan [Member]
 
 
 
Restricted Stock Activity
 
 
 
Share based compensation expense
3,211 
 
 
Year two [Member] |
Restricted Stock Plan [Member]
 
 
 
Restricted Stock Activity
 
 
 
Share based compensation expense
1,960 
 
 
Year three [Member] |
Restricted Stock Plan [Member]
 
 
 
Restricted Stock Activity
 
 
 
Share based compensation expense
1,211 
 
 
Year four [Member] |
Restricted Stock Plan [Member]
 
 
 
Restricted Stock Activity
 
 
 
Share based compensation expense
731 
 
 
Year five [Member] |
Restricted Stock Plan [Member]
 
 
 
Restricted Stock Activity
 
 
 
Share based compensation expense
439 
 
 
Year six and thereafter [Member] |
Restricted Stock Plan [Member]
 
 
 
Restricted Stock Activity
 
 
 
Share based compensation expense
596 
 
 
Salaries and Benefits |
Restricted Stock Plan [Member]
 
 
 
Restricted Stock Activity
 
 
 
Allocated share-based compensation expense
$ 4,200 
$ 4,100 
$ 5,200 
Stock Based Compensation Plans - Non-employee Directors Compensation Plan (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Share-based Goods and Nonemployee Services Transaction [Line Items]
 
 
 
Non-employee director stock at lower cost
85.00% 
 
 
Non-employee share based compensation expense
$ 922 
$ 922 
$ 905 
Shares issued under non-employee director plan (in shares)
17,829 
24,443 
18,570 
Shares Issued - Deferred [Member]
 
 
 
Share-based Goods and Nonemployee Services Transaction [Line Items]
 
 
 
Shares issued under non-employee director plan (in shares)
10,974 
13,644 
10,406 
Non employee director stock, cumulative deferred shares (in shares)
171,519 
 
 
Shares Issued - Not Deferred [Member]
 
 
 
Share-based Goods and Nonemployee Services Transaction [Line Items]
 
 
 
Shares issued under non-employee director plan (in shares)
6,855 
10,799 
8,164 
Related Parties - Transactions with Union Bank and Trust Company (Details) (USD $)
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Loan Purchases and Sales [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loans receivable, gross
$ 21,995,877,000 
 
 
 
$ 25,103,643,000 
 
 
 
$ 21,995,877,000 
$ 25,103,643,000 
 
Loan Servicing [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loans receivable
21,814,507,000 
 
 
 
24,903,724,000 
 
 
 
21,814,507,000 
24,903,724,000 
 
Loan systems and servicing revenue
55,921,000 
55,950,000 
56,899,000 
54,229,000 
53,764,000 
54,350,000 
54,402,000 
52,330,000 
223,000,000 
214,846,000 
239,858,000 
Accounts receivable, net
54,410,000 
 
 
 
43,972,000 
 
 
 
54,410,000 
43,972,000 
 
Operating Cash Accounts [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents related party
59,770,000 
 
 
 
61,813,000 
 
 
 
59,770,000 
61,813,000 
 
Restricted cash - due to customers
187,121,000 
 
 
 
119,702,000 
 
 
 
187,121,000 
119,702,000 
 
Interest income
 
 
 
 
 
 
 
 
770,426,000 
760,746,000 
734,109,000 
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Loan Servicing [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loans receivable
462,300,000 
 
 
 
483,800,000 
 
 
 
462,300,000 
483,800,000 
563,100,000 
Loan systems and servicing revenue
 
 
 
 
 
 
 
 
500,000 
600,000 
500,000 
Accounts receivable, net
42,000 
 
 
 
36,000 
 
 
 
42,000 
36,000 
 
Funding, Participation Agreement [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Amount of participation, FFELP student loans
552,600,000 
 
 
 
496,800,000 
 
 
 
552,600,000 
496,800,000 
 
Maximum participation to Union Bank FFELP loans
 
 
 
 
 
 
 
 
750,000,000 
 
 
Operating Cash Accounts [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents related party
115,800,000 
 
 
 
74,300,000 
 
 
 
115,800,000 
74,300,000 
 
Restricted cash - due to customers
56,000,000 
 
 
 
12,500,000 
 
 
 
56,000,000 
12,500,000 
 
Interest income
 
 
 
 
 
 
 
 
900,000 
400,000 
200,000 
Lease Arrangements [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Square footage leased to Union Bank and Trust Company (in square feet)
 
 
 
 
 
 
 
 
4,000 
 
 
Operating lease revenue
 
 
 
 
 
 
 
 
74,000 
73,000 
73,000 
529 Plan Administration Fees [Member] |
Received from Union Bank [Member] |
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Other Fees Paid to/Received from Union Bank [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Related party selling, general and administrative expense
 
 
 
 
 
 
 
 
2,000,000 
1,600,000 
3,500,000 
Selling Expense [Member] |
Paid to Union Bank [Member] |
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Other Fees Paid to/Received from Union Bank [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Related party selling, general and administrative expense
 
 
 
 
 
 
 
 
 
13,000 
47,000 
Cash Management [Member] |
Paid to Union Bank [Member] |
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Other Fees Paid to/Received from Union Bank [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Related party selling, general and administrative expense
 
 
 
 
 
 
 
 
127,000 
126,000 
111,000 
Other services [Member] |
Paid to Union Bank [Member] |
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Other Fees Paid to/Received from Union Bank [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Related party selling, general and administrative expense
 
 
 
 
 
 
 
 
 
 
205,000 
General and Administrative Expense [Member] |
Paid to Union Bank [Member] |
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Other Fees Paid to/Received from Union Bank [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Related party selling, general and administrative expense
 
 
 
 
 
 
 
 
 
 
36,000 
Employee Sharing Arrangement [Member] |
Received from Union Bank [Member] |
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Other Fees Paid to/Received from Union Bank [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Related party selling, general and administrative expense
 
 
 
 
 
 
 
 
219,000 
209,000 
201,000 
Health and Productivity Services [Member] |
Received from Union Bank [Member] |
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Other Fees Paid to/Received from Union Bank [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Related party selling, general and administrative expense
 
 
 
 
 
 
 
 
 
10,000 
19,000 
401K Plan Administrative Fees [Member] |
Paid to Union Bank [Member] |
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Other Fees Paid to/Received from Union Bank [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Related party selling, general and administrative expense
 
 
 
 
 
 
 
 
241,000 
280,000 
469,000 
Private education loans [Member] |
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Loan Purchases and Sales [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Loans purchased
 
 
 
 
 
 
 
 
2,900,000 
29,600,000 
4,400,000 
Consumer Loan [Member] |
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Loan Purchases and Sales [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Purchases from related party
 
 
 
 
 
 
 
 
10,300,000 
 
 
Processing Fees Received, Net Of Merchant Fees [Member] |
Union Bank and Trust Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Other Fees Paid to/Received from Union Bank [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Proceeds from processing fees net of merchant fee
 
 
 
 
 
 
 
 
11,000 
 
 
Merchant fees
 
 
 
 
 
 
 
 
$ 1,000 
 
 
Related Parties - Related Party Transactions Investment Services (Details) (USD $)
Share data in Thousands, unless otherwise specified
12 Months Ended 12 Months Ended
Dec. 31, 2017
Union Bank and Whitetail Rock Capital Management management agreement dated May 9, 2011, effective as of May 1, 2011 [Member]
Basis_Point
Dec. 31, 2016
Union Bank and Whitetail Rock Capital Management management agreement dated May 9, 2011, effective as of May 1, 2011 [Member]
Dec. 31, 2015
Union Bank and Whitetail Rock Capital Management management agreement dated May 9, 2011, effective as of May 1, 2011 [Member]
Dec. 31, 2017
Union Bank and Whitetail Rock Capital Management management agreement dated January 20, 2012 [Member]
Basis_Point
Dec. 31, 2016
Union Bank and Whitetail Rock Capital Management management agreement dated January 20, 2012 [Member]
Dec. 31, 2015
Union Bank and Whitetail Rock Capital Management management agreement dated January 20, 2012 [Member]
Dec. 31, 2015
Union Bank and Whitetail Rock Capital Management management agreement dated January 20, 2012 [Member]
Board of Directors Chairman [Member]
Dec. 31, 2011
Union Bank and Whitetail Rock Capital Management management agreement dated January 20, 2012 [Member]
Board of Directors Chairman [Member]
Dec. 31, 2016
Union Bank and Whitetail Rock Capital Management management agreement dated January 20, 2012 [Member]
Director [Member]
Dec. 31, 2017
SLABS Fund-I, SLABS Fund-II, SLABS Fund-III, SLABS Fund-IV, and SLABS Fund-V [Member]
Dec. 31, 2016
SLABS Fund-I, SLABS Fund-II, SLABS Fund-III, SLABS Fund-IV, and SLABS Fund-V [Member]
Dec. 31, 2015
SLABS Fund-I, SLABS Fund-II, SLABS Fund-III, SLABS Fund-IV, and SLABS Fund-V [Member]
Dec. 31, 2017
Union Financial Services [Member]
Mr. Butterfield [Member]
Dec. 31, 2017
Union Financial Services [Member]
Mr. Dunlap [Member]
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basis points Whitetail Rock Capital Management earns from Union Bank on outstanding balance
25 
 
 
5 
 
 
 
 
 
50 
 
 
 
 
Amount invested in funds under Whitetail Rock Capital Management management agreement
$ 665,900,000 
 
 
 
 
 
 
 
 
$ 149,400,000 
 
 
 
 
Percent of gains from the sale of securities Whitetail Rock Capital Management earns
50.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fee revenue related to investment services
9,200,000 
4,500,000 
2,700,000 
161,000 
142,000 
71,000 
 
 
 
 
 
 
 
 
Shares contributed to the trusts (in shares)
 
 
 
 
 
 
3,000 
3,375 
1,200 
 
 
 
 
 
Receivables due from Union Bank and Trust
 
 
 
200,000 
800,000 
 
 
 
 
 
 
 
 
 
Ownership percentage, related party
 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
50.00% 
Percentage of basis points earned paid to Union Bank as custodian
 
 
 
 
 
 
 
 
 
50.00% 
 
 
 
 
Fees paid to Union Bank as custodian
 
 
 
 
 
 
 
 
 
$ 300,000 
$ 400,000 
$ 400,000 
 
 
Related Parties - Transactions with Agile Sports Technologies, Inc. (doing business as "Hudl") (Details) (USD $)
12 Months Ended 12 Months Ended
Dec. 31, 2017
Agile Sports Technologies, Inc. [Member]
Mar. 17, 2015
Agile Sports Technologies, Inc. [Member]
Jul. 7, 2017
Agile Sports Technologies, Inc. [Member]
Preferred Stock Investment In Hudl [Member]
Dec. 31, 2017
Assurity Life Insurance Company [Member]
Payment For Insurance Premiums [Member]
Dec. 31, 2017
Assurity Life Insurance Company [Member]
Reinsurance Premiums Paid For By Related Party [Member]
Dec. 31, 2017
Assurity Life Insurance Company [Member]
Annual Insurance Claim Refund [Member]
Dec. 31, 2017
Assurity Life Insurance Company [Member]
Remitted Employee Paid Insurance Premiums [Member]
Dec. 31, 2016
Assurity Life Insurance Company [Member]
Remitted Employee Paid Insurance Premiums [Member]
Dec. 31, 2015
Assurity Life Insurance Company [Member]
Remitted Employee Paid Insurance Premiums [Member]
Dec. 31, 2017
Mr. Dunlap [Member]
Agile Sports Technologies, Inc. [Member]
Dec. 31, 2017
Subsidiaries [Member]
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Cost method investment
 
$ 40,500,000 
$ 10,400,000 
 
 
 
 
 
 
 
 
Ownership percentage, cost method investment
19.70% 
 
 
 
 
 
 
 
 
 
 
Ownership percentage, related party
 
 
 
 
 
 
 
 
 
3.40% 
 
Transaction with related party
 
 
 
1,500,000 
1,400,000 
10,000 
181,000 
166,000 
116,000 
 
 
Payment for insurance claims
 
 
 
 
 
 
 
 
 
 
$ 700,000 
Fair Value - Assets and Liabilities that are Measured at Fair Value (Details) (Fair Value, Measurements, Recurring [Member], USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Assets [Abstract]
 
 
Fair value
$ 80,902 
$ 106,593 
Fair value of derivative instruments
818 
87,531 
Total assets
81,720 
194,124 
Liabilities [Abstract]
 
 
Fair value of derivative instruments
7,063 
77,826 
Total liabilities
7,063 
77,826 
Student loan and other asset-backed securities [Member]
 
 
Assets [Abstract]
 
 
Fair value
76,866 
103,780 
Equity securities [Member]
 
 
Assets [Abstract]
 
 
Fair value
3,928 
2,694 
Debt securities [Member]
 
 
Assets [Abstract]
 
 
Fair value
108 
119 
Level 1 [Member]
 
 
Assets [Abstract]
 
 
Fair value
4,036 
2,813 
Fair value of derivative instruments
0 
0 
Total assets
4,036 
2,813 
Liabilities [Abstract]
 
 
Fair value of derivative instruments
0 
0 
Total liabilities
0 
0 
Level 1 [Member] |
Student loan and other asset-backed securities [Member]
 
 
Assets [Abstract]
 
 
Fair value
0 
0 
Level 1 [Member] |
Equity securities [Member]
 
 
Assets [Abstract]
 
 
Fair value
3,928 
2,694 
Level 1 [Member] |
Debt securities [Member]
 
 
Assets [Abstract]
 
 
Fair value
108 
119 
Level 2 [Member]
 
 
Assets [Abstract]
 
 
Fair value
76,866 
103,780 
Fair value of derivative instruments
818 
87,531 
Total assets
77,684 
191,311 
Liabilities [Abstract]
 
 
Fair value of derivative instruments
7,063 
77,826 
Total liabilities
7,063 
77,826 
Level 2 [Member] |
Student loan and other asset-backed securities [Member]
 
 
Assets [Abstract]
 
 
Fair value
76,866 
103,780 
Level 2 [Member] |
Equity securities [Member]
 
 
Assets [Abstract]
 
 
Fair value
0 
0 
Level 2 [Member] |
Debt securities [Member]
 
 
Assets [Abstract]
 
 
Fair value
$ 0 
$ 0 
Fair Value - Fair Value of Financial Instruments (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Financial assets:
 
 
 
 
Loans receivable
$ 21,814,507 
$ 24,903,724 
 
 
Cash and cash equivalents
66,752 
69,654 
63,529 
130,481 
Restricted cash
688,193 
980,961 
 
 
Restricted cash - due to customers
187,121 
119,702 
 
 
Loan accrued interest receivable
430,385 
391,264 
 
 
Fair value of derivative instruments
818 
87,531 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
21,356,573 
24,668,490 
 
 
Accrued interest payable
50,039 
45,677 
 
 
Due to customers
187,121 
119,702 
 
 
Fair value of derivative instruments
7,063 
77,826 
 
 
Fair value [Member]
 
 
 
 
Financial assets:
 
 
 
 
Loans receivable
23,106,440 
25,653,581 
 
 
Cash and cash equivalents
66,752 
69,654 
 
 
Investments (available-for-sale)
80,902 
106,593 
 
 
Notes receivable
16,393 
17,031 
 
 
Restricted cash
688,193 
980,961 
 
 
Restricted cash - due to customers
187,121 
119,702 
 
 
Loan accrued interest receivable
430,385 
391,264 
 
 
Fair value of derivative instruments
818 
87,531 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
21,521,463 
24,220,996 
 
 
Accrued interest payable
50,039 
45,677 
 
 
Due to customers
187,121 
119,702 
 
 
Fair value of derivative instruments
7,063 
77,826 
 
 
Fair value [Member] |
Level 1 [Member]
 
 
 
 
Financial assets:
 
 
 
 
Loans receivable
0 
0 
 
 
Cash and cash equivalents
66,752 
69,654 
 
 
Investments (available-for-sale)
4,036 
2,813 
 
 
Notes receivable
0 
0 
 
 
Restricted cash
688,193 
980,961 
 
 
Restricted cash - due to customers
187,121 
119,702 
 
 
Loan accrued interest receivable
0 
0 
 
 
Fair value of derivative instruments
0 
0 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
0 
0 
 
 
Accrued interest payable
0 
0 
 
 
Due to customers
187,121 
119,702 
 
 
Fair value of derivative instruments
0 
0 
 
 
Fair value [Member] |
Level 2 [Member]
 
 
 
 
Financial assets:
 
 
 
 
Loans receivable
0 
0 
 
 
Cash and cash equivalents
0 
0 
 
 
Investments (available-for-sale)
76,866 
103,780 
 
 
Notes receivable
16,393 
17,031 
 
 
Restricted cash
0 
0 
 
 
Restricted cash - due to customers
0 
0 
 
 
Loan accrued interest receivable
430,385 
391,264 
 
 
Fair value of derivative instruments
818 
87,531 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
21,521,463 
24,220,996 
 
 
Accrued interest payable
50,039 
45,677 
 
 
Due to customers
0 
0 
 
 
Fair value of derivative instruments
7,063 
77,826 
 
 
Fair value [Member] |
Level 3 [Member]
 
 
 
 
Financial assets:
 
 
 
 
Loans receivable
23,106,440 
25,653,581 
 
 
Cash and cash equivalents
0 
0 
 
 
Investments (available-for-sale)
0 
0 
 
 
Notes receivable
0 
0 
 
 
Restricted cash
0 
0 
 
 
Restricted cash - due to customers
0 
0 
 
 
Loan accrued interest receivable
0 
0 
 
 
Fair value of derivative instruments
0 
0 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
0 
0 
 
 
Accrued interest payable
0 
0 
 
 
Due to customers
0 
0 
 
 
Fair value of derivative instruments
0 
0 
 
 
Carrying value [Member]
 
 
 
 
Financial assets:
 
 
 
 
Loans receivable
21,814,507 
24,903,724 
 
 
Cash and cash equivalents
66,752 
69,654 
 
 
Investments (available-for-sale)
80,902 
106,593 
 
 
Notes receivable
16,393 
17,031 
 
 
Restricted cash
688,193 
980,961 
 
 
Restricted cash - due to customers
187,121 
119,702 
 
 
Loan accrued interest receivable
430,385 
391,264 
 
 
Fair value of derivative instruments
818 
87,531 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
21,356,573 
24,668,490 
 
 
Accrued interest payable
50,039 
45,677 
 
 
Due to customers
187,121 
119,702 
 
 
Fair value of derivative instruments
$ 7,063 
$ 77,826 
 
 
Quarterly Financial Information (Unaudited) Quarterly Financial Information (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Quarterly Financial Information Disclosure [Abstract]
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$ 73,235 
$ 75,237 
$ 79,842 
$ 76,925 
$ 78,960 
$ 99,795 
$ 92,200 
$ 101,609 
$ 305,238 
$ 372,563 
$ 431,899 
Less provision for loan losses
3,750 
6,700 
3,000 
1,000 
3,000 
6,000 
2,000 
2,500 
14,450 
13,500 
10,150 
Net interest income after provision for loan losses
69,485 
68,537 
76,842 
75,925 
75,960 
93,795 
90,200 
99,109 
290,788 
359,063 
421,749 
Loan systems and servicing revenue
55,921 
55,950 
56,899 
54,229 
53,764 
54,350 
54,402 
52,330 
223,000 
214,846 
239,858 
Tuition payment processing, school information, and campus commerce revenue
32,457 
35,450 
34,224 
43,620 
30,519 
33,071 
30,483 
38,657 
145,751 
132,730 
120,365 
Communications revenue
8,122 
6,751 
5,719 
5,106 
4,492 
4,343 
4,478 
4,346 
25,700 
17,659 
0 
Enrollment services revenue
 
 
 
 
0 
0 
0 
4,326 
0 
4,326 
51,073 
Other income
7,952 
19,756 
12,485 
12,632 
15,218 
15,150 
9,765 
13,796 
52,826 
53,929 
47,262 
Gain on sale of loans and debt repurchases, net
(2,635)
116 
442 
4,980 
5,720 
2,160 
0 
101 
2,902 
7,981 
5,153 
Derivative market value and foreign currency transaction adjustments and derivative settlements, net
7,014 
7,173 
(27,910)
(4,830)
83,187 
36,001 
(40,702)
(28,691)
(18,554)
49,795 
4,401 
Salaries and benefits
(81,201)
(74,193)
(74,628)
(71,863)
(68,017)
(63,743)
(60,923)
(63,242)
(301,885)
(255,924)
(247,914)
Depreciation and amortization
(11,854)
(10,051)
(9,038)
(8,598)
(9,116)
(8,994)
(8,183)
(7,640)
(39,541)
(33,933)
(26,343)
Loan servicing fees
(3,064)
(8,017)
(5,628)
(6,025)
(5,726)
(5,880)
(7,216)
(6,928)
(22,734)
(25,750)
(30,213)
Cost to provide communications services
(3,160)
(2,632)
(2,203)
(1,954)
(1,697)
(1,784)
(1,681)
(1,703)
(9,950)
(6,866)
0 
Cost to provide enrollment services
 
 
 
 
0 
0 
0 
(3,623)
0 
(3,623)
(41,733)
Operating expenses
(38,809)
(29,743)
(26,521)
(26,547)
(31,245)
(26,391)
(29,409)
(28,376)
(121,619)
(115,419)
(123,014)
Income tax (expense) benefit
5,486 
(25,562)
(16,032)
(28,755)
(54,128)
(47,715)
(15,036)
(24,433)
(64,863)
(141,313)
(152,380)
Net income
45,714 
43,535 
24,651 
47,920 
98,931 
84,363 
26,178 
48,029 
161,821 
257,501 
268,264 
Net loss (income) attributable to noncontrolling interests
2,386 
2,768 
4,086 
2,106 
(585)
(69)
(28)
(68)
11,345 
(750)
(285)
Net income attributable to Nelnet, Inc.
$ 48,100 
$ 46,303 
$ 28,737 
$ 50,026 
$ 98,346 
$ 84,294 
$ 26,150 
$ 47,961 
$ 173,166 
$ 256,751 
$ 267,979 
Earnings per common share:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted (in dollars per share)
$ 1.17 
$ 1.11 
$ 0.68 
$ 1.18 
$ 2.32 
$ 1.98 
$ 0.61 
$ 1.11 
$ 4.14 
$ 6.02 
$ 5.89 
Condensed Parent Company Financial Statements - Condensed Parent Balance Sheets (Details) (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Assets:
 
 
 
 
Cash and cash equivalents
$ 66,752 
$ 69,654 
$ 63,529 
$ 130,481 
Restricted cash
688,193 
980,961 
 
 
Other assets
56,474 
23,232 
 
 
Fair value of derivative instruments
818 
87,531 
 
 
Total assets
23,964,435 
27,193,095 
30,419,144 
 
Liabilities:
 
 
 
 
Notes payable
21,356,573 
24,668,490 
 
 
Other liabilities
198,252 
210,475 
 
 
Fair value of derivative instruments
7,063 
77,826 
 
 
Total liabilities
21,799,048 
25,122,170 
 
 
Nelnet, Inc. shareholders' equity:
 
 
 
 
Additional paid-in capital
521 
420 
 
 
Retained earnings
2,143,983 
2,056,084 
 
 
Accumulated other comprehensive earnings
4,617 
4,730 
 
 
Total Nelnet, Inc. shareholders' equity
2,149,529 
2,061,655 
 
 
Noncontrolling interests
15,858 
9,270 
 
 
Total equity
2,165,387 
2,070,925 
1,892,158 
1,725,678 
Total liabilities and equity
23,964,435 
27,193,095 
 
 
Parent Company [Member]
 
 
 
 
Assets:
 
 
 
 
Cash and cash equivalents
21,001 
29,734 
19,419 
30,712 
Investments and notes receivable
149,236 
167,711 
 
 
Investment in subsidiary debt
75,659 
71,815 
 
 
Restricted cash
44,149 
7,805 
 
 
Investment in subsidiaries
1,681,690 
1,537,507 
 
 
Notes receivable from subsidiaries
212,077 
161,284 
 
 
Other assets
131,790 
136,685 
 
 
Fair value of derivative instruments
818 
86,379 
 
 
Total assets
2,316,420 
2,198,920 
 
 
Liabilities:
 
 
 
 
Notes payable
79,120 
48,085 
 
 
Other liabilities
76,638 
74,706 
 
 
Fair value of derivative instruments
7,063 
10,221 
 
 
Total liabilities
162,821 
133,012 
 
 
Nelnet, Inc. shareholders' equity:
 
 
 
 
Common stock
408 
421 
 
 
Additional paid-in capital
521 
420 
 
 
Retained earnings
2,143,983 
2,056,084 
 
 
Accumulated other comprehensive earnings
4,617 
4,730 
 
 
Total Nelnet, Inc. shareholders' equity
2,149,529 
2,061,655 
 
 
Noncontrolling interests
4,070 
4,253 
 
 
Total equity
2,153,599 
2,065,908 
 
 
Total liabilities and equity
$ 2,316,420 
$ 2,198,920 
 
 
Condensed Parent Company Financial Statements - Condensed Parent Statements of Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Investment interest
 
 
 
 
 
 
 
 
$ 12,695 
$ 9,466 
$ 7,851 
Interest on bonds and notes payable
 
 
 
 
 
 
 
 
465,188 
388,183 
302,210 
Net interest income (expense)
73,235 
75,237 
79,842 
76,925 
78,960 
99,795 
92,200 
101,609 
305,238 
372,563 
431,899 
Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
Other income
7,952 
19,756 
12,485 
12,632 
15,218 
15,150 
9,765 
13,796 
52,826 
53,929 
47,262 
Gain from debt repurchases, net
(2,635)
116 
442 
4,980 
5,720 
2,160 
0 
101 
2,902 
7,981 
5,153 
Derivative market value and foreign currency transaction adjustments and derivative settlements, net
7,014 
7,173 
(27,910)
(4,830)
83,187 
36,001 
(40,702)
(28,691)
(18,554)
49,795 
4,401 
Total other income
 
 
 
 
 
 
 
 
431,625 
481,266 
468,112 
Operating expenses
 
 
 
 
 
 
 
 
495,729 
441,515 
469,217 
Income tax (expense) benefit
5,486 
(25,562)
(16,032)
(28,755)
(54,128)
(47,715)
(15,036)
(24,433)
(64,863)
(141,313)
(152,380)
Net income
45,714 
43,535 
24,651 
47,920 
98,931 
84,363 
26,178 
48,029 
161,821 
257,501 
268,264 
Net (loss) income attributable to noncontrolling interests
2,386 
2,768 
4,086 
2,106 
(585)
(69)
(28)
(68)
11,345 
(750)
(285)
Net income attributable to Nelnet, Inc.
48,100 
46,303 
28,737 
50,026 
98,346 
84,294 
26,150 
47,961 
173,166 
256,751 
267,979 
Parent Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Investment interest
 
 
 
 
 
 
 
 
13,060 
9,794 
5,776 
Interest on bonds and notes payable
 
 
 
 
 
 
 
 
3,315 
6,049 
6,242 
Net interest income (expense)
 
 
 
 
 
 
 
 
9,745 
3,745 
(466)
Other income (expense):
 
 
 
 
 
 
 
 
 
 
 
Other income
 
 
 
 
 
 
 
 
3,483 
7,037 
4,012 
Gain from debt repurchases, net
 
 
 
 
 
 
 
 
2,964 
8,083 
4,904 
Equity in subsidiaries income
 
 
 
 
 
 
 
 
170,897 
239,405 
276,825 
Derivative market value and foreign currency transaction adjustments and derivative settlements, net
 
 
 
 
 
 
 
 
(603)
45,203 
8,416 
Total other income
 
 
 
 
 
 
 
 
176,741 
299,728 
294,157 
Operating expenses
 
 
 
 
 
 
 
 
6,117 
8,183 
5,057 
Income before income taxes
 
 
 
 
 
 
 
 
180,369 
295,290 
288,634 
Income tax (expense) benefit
 
 
 
 
 
 
 
 
(7,491)
(38,642)
(20,655)
Net income
 
 
 
 
 
 
 
 
172,878 
256,648 
267,979 
Net (loss) income attributable to noncontrolling interests
 
 
 
 
 
 
 
 
288 
103 
0 
Net income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
$ 173,166 
$ 256,751 
$ 267,979 
Condensed Parent Company Financial Statements - Condensed Parent Statement of Comprehensive Income (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 12 Months Ended
Dec. 31, 2017
Sep. 30, 2017
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Net income
$ 45,714 
$ 43,535 
$ 24,651 
$ 47,920 
$ 98,931 
$ 84,363 
$ 26,178 
$ 48,029 
$ 161,821 
$ 257,501 
$ 268,264 
Unrealized holding gains (losses) arising during period, net
 
 
 
 
 
 
 
 
2,349 
5,789 
(1,570)
Reclassification adjustment for gains recognized in net income, net of losses
 
 
 
 
 
 
 
 
(2,528)
(1,907)
(2,955)
Income tax effect
 
 
 
 
 
 
 
 
66 
(1,436)
1,674 
Total other comprehensive (loss) income
 
 
 
 
 
 
 
 
(113)
2,446 
(2,851)
Comprehensive income
 
 
 
 
 
 
 
 
161,708 
259,947 
265,413 
Comprehensive loss (income) attributable to noncontrolling interests
 
 
 
 
 
 
 
 
11,345 
(750)
(285)
Comprehensive income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
173,053 
259,197 
265,128 
Parent Company [Member]
 
 
 
 
 
 
 
 
 
 
 
Net income
 
 
 
 
 
 
 
 
172,878 
256,648 
267,979 
Unrealized holding gains (losses) arising during period, net
 
 
 
 
 
 
 
 
2,349 
5,789 
(1,570)
Reclassification adjustment for gains recognized in net income, net of losses
 
 
 
 
 
 
 
 
(2,528)
(1,907)
(2,955)
Income tax effect
 
 
 
 
 
 
 
 
66 
(1,436)
1,674 
Total other comprehensive (loss) income
 
 
 
 
 
 
 
 
(113)
2,446 
(2,851)
Comprehensive income
 
 
 
 
 
 
 
 
172,765 
259,094 
265,128 
Comprehensive loss (income) attributable to noncontrolling interests
 
 
 
 
 
 
 
 
288 
103 
0 
Comprehensive income attributable to Nelnet, Inc.
 
 
 
 
 
 
 
 
$ 173,053 
$ 259,197 
$ 265,128 
Condensed Parent Company Financial Statements - Condensed Parent Statements of Cash Flows (Details) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Net income attributable to Nelnet, Inc.
$ 173,166 
$ 256,751 
$ 267,979 
Net loss attributable to noncontrolling interest
(11,345)
750 
285 
Net income
161,821 
257,501 
268,264 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization, including debt discounts and loan premiums and deferred origination costs
137,823 
122,547 
123,736 
Proceeds from termination of derivative instruments, net of payments
30,400 
(4,000)
 
Payment to enter into derivative instrument
(929)
0 
(2,936)
Proceeds from clearinghouse to settle variation margin, net
48,985 
0 
0 
Gain from sales of available-for-sale securities, net of losses
(2,528)
(1,907)
(2,955)
Deferred income tax (benefit) expense
(1,544)
27,005 
7,049 
Non-cash compensation expense
4,416 
4,348 
5,347 
Decrease (increase) in other assets
(34,457)
(2,203)
375 
(Decrease) increase in other liabilities
(2,341)
2,409 
(8,736)
Net cash provided by operating activities
227,508 
325,257 
391,365 
Cash flows from investing activities, net of acquisitions:
 
 
 
(Increase) decrease in restricted cash
320,108 
(147,487)
67,108 
Purchases of available-for-sale securities
(128,523)
(94,673)
(100,476)
Business and asset acquisitions, net of cash acquired
0 
0 
(46,966)
Net cash provided by investing activities
3,270,090 
3,259,415 
1,417,362 
Cash flows from financing activities, net of borrowings assumed:
 
 
 
Payments on notes payable
(5,403,224)
(4,134,890)
(4,368,180)
Proceeds from issuance of notes payable
1,984,558 
650,909 
2,614,595 
Payments of debt issuance costs
(6,497)
(5,845)
(11,162)
Dividends paid
(24,097)
(21,188)
(19,025)
Repurchases of common stock
(68,896)
(69,091)
(96,169)
Proceeds from issuance of common stock
678 
889 
801 
Issuance of noncontrolling interests
19,473 
1,241 
3,693 
Distribution to noncontrolling interests
(1,645)
(572)
(232)
Net cash used in financing activities
(3,500,500)
(3,578,547)
(1,875,679)
Net (decrease) increase in cash and cash equivalents
(2,902)
6,125 
(66,952)
Cash and cash equivalents, beginning of year
69,654 
63,529 
130,481 
Cash and cash equivalents, end of year
66,752 
69,654 
63,529 
Cash disbursements made for:
 
 
 
Interest
390,278 
301,118 
228,248 
Income taxes, net of refunds
96,721 
115,415 
147,235 
Noncash investing and financing activities:
 
 
 
Issuance of noncontrolling interest
0 
20 
3,750 
Parent Company [Member]
 
 
 
Net income attributable to Nelnet, Inc.
173,166 
256,751 
267,979 
Net loss attributable to noncontrolling interest
(288)
(103)
0 
Net income
172,878 
256,648 
267,979 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization, including debt discounts and loan premiums and deferred origination costs
420 
391 
327 
Derivative market value adjustment
7,591 
(62,268)
(31,411)
Proceeds from termination of derivative instruments, net of payments
2,100 
3,999 
65,527 
Payment to enter into derivative instrument
(929)
0 
0 
Proceeds from clearinghouse to settle variation margin, net
48,985 
0 
0 
Equity in earnings of subsidiaries
(170,897)
(239,405)
(276,825)
Gain from sales of available-for-sale securities, net of losses
(2,528)
(1,907)
(2,955)
Gain from debt repurchases, net
(2,964)
(8,083)
(4,904)
Deferred income tax (benefit) expense
(8,056)
20,071 
3,228 
Non-cash compensation expense
4,416 
4,348 
5,347 
Other
2,967 
1,117 
1,946 
Decrease (increase) in other assets
4,171 
32,262 
(8,541)
(Decrease) increase in other liabilities
10,104 
(594)
6,597 
Net cash provided by operating activities
68,258 
6,579 
26,315 
Cash flows from investing activities, net of acquisitions:
 
 
 
(Increase) decrease in restricted cash
(9,004)
6,997 
(13,825)
Purchases of available-for-sale securities
(127,567)
(94,920)
(98,332)
Proceeds from sales of available-for-sale securities
156,727 
139,427 
94,722 
Capital contributions/distributions to/from subsidiaries, net
29,426 
223,386 
120,291 
(Increase) decrease in notes receivable from subsidiaries
(50,793)
8,561 
(84,061)
Proceeds from investments and notes receivable
4,823 
9,952 
12,253 
(Purchases of) proceeds from subsidiary debt, net
(3,844)
(13,800)
72,125 
Purchases of investments and issuances of notes receivable
(18,023)
(4,365)
(53,388)
Business and asset acquisitions, net of cash acquired
0 
0 
(45,916)
Net cash provided by investing activities
(18,255)
275,238 
3,869 
Cash flows from financing activities, net of borrowings assumed:
 
 
 
Payments on notes payable
(27,480)
(412,000)
(42,541)
Proceeds from issuance of notes payable
61,059 
230,000 
116,460 
Payments of debt issuance costs
0 
(613)
(773)
Dividends paid
(24,097)
(21,188)
(19,025)
Repurchases of common stock
(68,896)
(69,091)
(96,169)
Proceeds from issuance of common stock
678 
889 
801 
Issuance of noncontrolling interests
0 
501 
0 
Distribution to noncontrolling interests
0 
0 
(230)
Net cash used in financing activities
(58,736)
(271,502)
(41,477)
Net (decrease) increase in cash and cash equivalents
(8,733)
10,315 
(11,293)
Cash and cash equivalents, beginning of year
29,734 
19,419 
30,712 
Cash and cash equivalents, end of year
21,001 
29,734 
19,419 
Cash disbursements made for:
 
 
 
Interest
2,882 
5,533 
5,914 
Income taxes, net of refunds
96,721 
115,415 
147,130 
Noncash investing and financing activities:
 
 
 
Issuance of noncontrolling interest
0 
0 
3,750 
Contributions of investments to subsidiaries, net
$ 2,092 
$ 1,884 
$ 0