NELNET INC, 10-Q filed on 5/10/2021
Quarterly Report
v3.21.1
Cover Page - shares
3 Months Ended
Mar. 31, 2021
Apr. 30, 2021
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2021  
Document Transition Report false  
Entity File Number 001-31924  
Entity Registrant Name NELNET, INC.  
Entity Incorporation, State or Country Code NE  
Entity Tax Identification Number 84-0748903  
Entity Address, Address Line One 121 South 13th Street, Suite 100  
Entity Address, City or Town Lincoln,  
Entity Address, State or Province NE  
Entity Address, Postal Zip Code 68508  
City Area Code 402  
Local Phone Number 458-2370  
Title of 12(b) Security Class A Common Stock, Par Value $0.01 per Share  
Trading Symbol NNI  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Current Fiscal Year End Date --12-31  
Amendment Flag false  
Entity Central Index Key 0001258602  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q1  
Common Class A    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   27,370,797
Common Class B    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   11,154,171
v3.21.1
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Assets:    
Loans and accrued interest receivable (net of allowance for loan losses of $157,394 and $175,698, respectively) $ 19,737,530 $ 20,185,656
Cash and cash equivalents:    
Cash and cash equivalents - not held at a related party 50,586 33,292
Cash and cash equivalents - held at a related party 93,643 87,957
Total cash and cash equivalents 144,229 121,249
Investments 973,099 992,940
Restricted cash 609,881 553,175
Restricted cash - due to customers 193,081 283,971
Accounts receivable (net of allowance for doubtful accounts of $2,091 and $1,824, respectively) 80,283 76,460
Goodwill 142,092 142,092
Intangible assets, net 66,718 75,070
Property and equipment, net 130,450 123,527
Other assets 89,845 92,020
Total assets 22,167,208 22,646,160
Liabilities:    
Bonds and notes payable 18,754,715 19,320,726
Accrued interest payable 5,527 28,701
Bank deposits 111,830 54,633
Other liabilities 315,454 312,280
Due to customers 230,581 301,471
Total liabilities 19,418,107 20,017,811
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 5,859 3,794
Retained earnings 2,736,923 2,621,762
Accumulated other comprehensive earnings 9,022 6,102
Total Nelnet, Inc. shareholders' equity 2,752,190 2,632,042
Noncontrolling interests (3,089) (3,693)
Total equity 2,749,101 2,628,349
Total liabilities and equity 22,167,208 22,646,160
Variable Interest Entity, Primary Beneficiary    
Assets:    
Loans and accrued interest receivable (net of allowance for loan losses of $157,394 and $175,698, respectively) 19,575,058 20,132,996
Cash and cash equivalents:    
Restricted cash 551,983 499,223
Liabilities:    
Bonds and notes payable 18,888,943 19,355,375
Common stock:    
Accrued interest payable and other liabilities 67,348 83,127
Net assets of consolidated education and other lending variable interest entities 1,170,750 1,193,717
Class A, $0.01 par value. Authorized 600,000,000 shares; issued and outstanding 27,367,797 shares and 27,193,154 shares, respectively    
Common stock:    
Common stock 274 272
Class B, convertible, $0.01 par value. Authorized 60,000,000 shares; issued and outstanding 11,154,171 shares and 11,155,571 shares, respectively    
Common stock:    
Common stock $ 112 $ 112
v3.21.1
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Allowance for loan losses $ 157,394 $ 175,698
Allowance for doubtful accounts $ 2,091 $ 1,824
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    
Par value (in dollars per share) $ 0.01 $ 0.01
Shares authorized (in shares) 600,000,000 600,000,000
Shares issued (in shares) 27,367,797 27,193,154
Shares outstanding (in shares) 27,367,797 27,193,154
Common Class B    
Par value (in dollars per share) $ 0.01 $ 0.01
Shares authorized (in shares) 60,000,000 60,000,000
Shares issued (in shares) 11,154,171 11,155,571
Shares outstanding (in shares) 11,154,171 11,155,571
v3.21.1
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Interest income:    
Loan interest $ 124,117 $ 181,793
Investment interest 4,986 7,398
Total interest income 129,103 189,191
Interest expense:    
Interest on bonds and notes payable and bank deposits 27,773 134,118
Net interest income 101,330 55,073
Less (negative provision) provision for loan losses (17,048) 76,299
Net interest income after provision for loan losses 118,378 (21,226)
Other income/expense:    
Other (4,604) 8,281
Gain on sale of loans 0 18,206
Impairment expense and provision for beneficial interests, net (2,436) 34,087
Derivative market value adjustments and derivative settlements, net 34,505 (16,365)
Total other income/expense 239,112 190,626
Cost of services:    
Cost of services 27,052 28,388
Operating expenses:    
Salaries and benefits 115,791 119,878
Depreciation and amortization 20,184 27,648
Other expenses 36,698 43,384
Total operating expenses 172,673 190,910
Income (loss) before income taxes 157,765 (49,898)
Income tax (expense) benefit (34,861) 10,133
Net income (loss) 122,904 (39,765)
Net loss (income) attributable to noncontrolling interests 694 (767)
Net income (loss) attributable to Nelnet, Inc. $ 123,598 $ (40,532)
Earnings per common share:    
Net (loss) income attributable to Nelnet, Inc. shareholders - basic and diluted (in dollars per share) $ 3.20 $ (1.01)
Weighted average common shares outstanding - basic and diluted (in shares) 38,603,555 39,955,514
Loan servicing and systems    
Other income/expense:    
Revenue $ 111,517 $ 112,735
Education technology, services, and payment processing    
Other income/expense:    
Revenue 95,258 83,675
Cost of services:    
Cost of services 27,052 22,806
Communications services    
Other income/expense:    
Revenue 0 18,181
Cost of services:    
Cost of services $ 0 $ 5,582
v3.21.1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Statement of Comprehensive Income [Abstract]    
Net income (loss) $ 122,904 $ (39,765)
Other comprehensive income (loss):    
Net changes related to foreign currency translation adjustments 1 0
Net changes related to available-for-sale debt securities:    
Unrealized gains (losses) during period, net 4,349 (3,015)
Reclassification of (gains) losses to net income, net (508) 235
Income tax effect (922) 667
Unrealized gains (losses) during period after reclassifications and tax 2,919 (2,113)
Other comprehensive income (loss) 2,920 (2,113)
Comprehensive income (loss) 125,824 (41,878)
Comprehensive loss (income) attributable to noncontrolling interests 694 (767)
Comprehensive income (loss) attributable to Nelnet, Inc. $ 126,518 $ (42,645)
v3.21.1
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)
$ in Thousands
Total
Cumulative Effect, Period Of Adoption, Adjustment
Preferred stock
Common stock
Common Class A
Common stock
Common Class B
Additional paid-in capital
 Retained earnings
 Retained earnings
Cumulative Effect, Period Of Adoption, Adjustment
Accumulated other comprehensive (loss) earnings
Noncontrolling interests
Balance (in shares) at Dec. 31, 2019     0 28,458,495 11,271,609          
Balance at Dec. 31, 2019 $ 2,391,094 $ (18,867) $ 0 $ 285 $ 113 $ 5,715 $ 2,377,627 $ (18,867) $ 2,972 $ 4,382
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Issuance of noncontrolling interests 26                 26
Net income (loss) (39,765)           (40,532)     767
Other comprehensive loss (2,113)               (2,113)  
Distribution to noncontrolling interests (55)                 (55)
Cash dividend on Class A and Class B common stock (7,946)           (7,946)      
Issuance of common stock, net of forfeitures (in shares)       148,422            
Issuance of common stock, net of forfeitures 2,941     $ 1   2,940        
Compensation expense for stock based awards 1,738         1,738        
Repurchase of common stock (in shares)       (24,885)            
Repurchase of common stock (1,253)         (1,253)        
Balance (in shares) at Mar. 31, 2020     0 28,582,032 11,271,609          
Balance at Mar. 31, 2020 2,325,800   $ 0 $ 286 $ 113 9,140 2,310,282   859 5,120
Balance (in shares) at Dec. 31, 2020     0 27,193,154 11,155,571          
Balance at Dec. 31, 2020 2,628,349   $ 0 $ 272 $ 112 3,794 2,621,762   6,102 (3,693)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Issuance of noncontrolling interests 1,400                 1,400
Net income (loss) 122,904           123,598     (694)
Other comprehensive loss 2,920               2,920  
Distribution to noncontrolling interests (102)                 (102)
Cash dividend on Class A and Class B common stock (8,437)           (8,437)      
Issuance of common stock, net of forfeitures (in shares)       199,442            
Issuance of common stock, net of forfeitures 2,091     $ 2   2,089        
Compensation expense for stock based awards 1,985         1,985        
Repurchase of common stock (in shares)       (26,199)            
Repurchase of common stock (2,009)         (2,009)        
Conversion of common stock (in shares)       1,400 (1,400)          
Conversion of common stock 0                  
Balance (in shares) at Mar. 31, 2021     0 27,367,797 11,154,171          
Balance at Mar. 31, 2021 $ 2,749,101   $ 0 $ 274 $ 112 $ 5,859 $ 2,736,923   $ 9,022 $ (3,089)
v3.21.1
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Common Class A    
Cash dividend on common stock (in dollars per share) $ 0.22 $ 0.20
Common Class B    
Cash dividend on common stock (in dollars per share) $ 0.22 $ 0.20
v3.21.1
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Net cash provided by operating activities:    
Net income (loss) attributable to Nelnet, Inc. $ 123,598 $ (40,532)
Net (loss) income attributable to noncontrolling interests (694) 767
Net income (loss) 122,904 (39,765)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:    
Depreciation and amortization, including debt discounts and loan premiums and deferred origination costs 38,415 48,763
Loan discount accretion (7,218) (9,442)
Provision (negative provision) for loan losses (17,048) 76,299
Derivative market value adjustments (38,809) 20,602
Proceeds from (payments to) clearinghouse - initial and variation margin, net 38,081 (20,386)
Gain from sale of loans 0 (18,206)
Loss from investments, net 13,849 4,046
Purchases of equity securities - trading (13,512) 0
Deferred income tax expense (benefit) 15,405 (26,000)
Non-cash compensation expense 2,052 1,857
(Negative provision) provision for beneficial interests and impairment expense (2,436) 34,087
Increase in loan and investment accrued interest receivable (114) (33,167)
(Increase) decrease in accounts receivable (3,831) 52,185
Decrease in other assets, net 5,147 31,363
Decrease (increase) in the carrying amount of ROU asset 1,418 (1,000)
Decrease in accrued interest payable (23,174) (3,411)
Decrease in other liabilities (10,375) (42,047)
Decrease in the carrying amount of lease liability (1,247) (2,382)
Decrease in due to customers (70,849) (217,851)
Net cash provided by (used in) operating activities 48,658 (144,455)
Cash flows from investing activities, net of acquisition:    
Purchases and originations of loans (152,329) (409,404)
Purchases of loans from a related party (19,731) (41,217)
Net proceeds from loan repayments, claims, and capitalized interest 637,275 517,347
Proceeds from sale of loans 0 90,461
Purchases of available-for-sale securities (44,335) (29,658)
Proceeds from sales of available-for-sale securities 18,077 22,197
Proceeds from beneficial interest in loan securitizations 8,603 11,264
Purchases of other investments (71,590) (32,892)
Proceeds from other investments 110,290 3,135
Purchases of property and equipment (17,898) (25,561)
Net cash provided by investing activities 468,362 105,672
Cash flows from financing activities:    
Payments on bonds and notes payable (584,303) (1,263,204)
Proceeds from issuance of bonds and notes payable 7,800 1,193,388
Payments of debt issuance costs (614) (4,854)
Increase in bank deposits, net 57,197 0
Dividends paid (8,437) (7,946)
Repurchases of common stock (2,009) (1,253)
Proceeds from issuance of common stock 381 411
Issuance of noncontrolling interests 1,940 0
Distribution to noncontrolling interests (102) (22)
Net cash used in financing activities (528,147) (83,480)
Effect of exchange rate changes on cash (77) 0
Net decrease in cash, cash equivalents, and restricted cash (11,204) (122,263)
Cash, cash equivalents, and restricted cash, beginning of period 958,395 1,222,601
Cash, cash equivalents, and restricted cash, end of period 947,191 1,100,338
Supplemental disclosures of cash flow information:    
Cash disbursements made for interest 39,686 125,184
Cash disbursements made for income taxes, net of refunds and credits received [1] 199 80
Cash disbursements made for operating leases 2,098 2,702
Non-cash operating, investing, and financing activity:    
ROU assets obtained in exchange for lease obligations 740 1,411
Receipt of beneficial interest in consumer loan securitizations 0 38,490
Distribution to noncontrolling interest $ 0 $ 33
[1] For the three months ended March 31, 2021 and 2020, respectively, the Company utilized $2.0 million and $9.4 million, respectively, of federal and state tax credits related primarily to renewable energy.
v3.21.1
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)
$ in Thousands
Mar. 31, 2021
Mar. 31, 2020
Statement of Cash Flows [Abstract]    
Federal and state tax credit utilized $ 2,000 $ 9,400
Cash and cash equivalents:    
Total cash and cash equivalents 144,229 204,844
Restricted cash 609,881 675,589
Restricted cash - due to customers 193,081 219,905
Cash, cash equivalents, and restricted cash $ 947,191 $ 1,100,338
v3.21.1
Basis of Financial Reporting
3 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Financial Reporting Basis of Financial ReportingThe accompanying unaudited consolidated financial statements of Nelnet, Inc. and subsidiaries (the “Company”) as of March 31, 2021 and for the three months ended March 31, 2021 and 2020 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2020 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results for the year ending December 31, 2021. The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the "2020 Annual Report").
v3.21.1
Loans and Accrued Interest Receivable and Allowance for Loan Losses
3 Months Ended
Mar. 31, 2021
Receivables [Abstract]  
Loans and Accrued Interest Receivable and Allowance for Loan Losses Loans and Accrued Interest Receivable and Allowance for Loan Losses
Loans and accrued interest receivable consisted of the following:
As ofAs of
 March 31, 2021December 31, 2020
Federally insured student loans:
Stafford and other$4,283,566 4,383,000 
Consolidation14,321,817 14,746,173 
Total18,605,383 19,129,173 
Private education loans314,048 320,589 
Private education loans - Nelnet Bank79,231 17,543 
Consumer loans110,792 109,346 
 19,109,454 19,576,651 
Accrued interest receivable794,561 794,611 
Loan discount, net of unamortized loan premiums and deferred origination costs
(9,091)(9,908)
Allowance for loan losses:
Federally insured loans(121,846)(128,590)
Private education loans(20,670)(19,529)
Private education loans - Nelnet Bank(744)(323)
Consumer loans(14,134)(27,256)
 $19,737,530 20,185,656 
Activity in the Allowance for Loan Losses
The following table presents the activity in the allowance for loan losses by portfolio segment.
Balance at beginning of periodImpact of ASC 326 adoptionProvision (negative provision) for loan lossesCharge-offsRecoveriesInitial allowance on loans purchased with credit deterioration (a)Loan salesBalance at end of period
 Three months ended March 31, 2021
Federally insured loans$128,590 — (7,483)(61)— 800 — 121,846 
Private education loans19,529 — 1,431 (493)202 — 20,670 
Private education loans - Nelnet Bank323 — 422 — — — (1)744 
Consumer loans27,256 — (11,418)(1,950)246 — — 14,134 
$175,698 — (17,048)(2,504)448 800 — 157,394 
Three months ended March 31, 2020
Federally insured loans$36,763 72,291 39,323 (6,318)— 4,700 — 146,759 
Private education loans9,597 4,797 9,800 (1,330)192 — — 23,056 
Consumer loans15,554 13,926 27,176 (4,350)247 — (13,500)39,053 
$61,914 91,014 76,299 (11,998)439 4,700 (13,500)208,868 
a) During the three months ended March 31, 2021 and 2020, the Company acquired $54.0 million (par value) and $291.2 million (par value), respectively, of federally insured rehabilitation loans that met the definition of PCD loans when they were purchased by the Company.
Beginning in March 2020, the coronavirus disease 2019 ("COVID-19") pandemic has caused significant disruptions in the U.S. and world economies. Apart from the impact of the adoption of ASC 326 effective January 1, 2020, the Company’s allowance for loan losses increased during the first quarter of 2020 primarily as a result of the COVID-19 pandemic and its effects on economic conditions.
The Company recorded a negative provision for loan losses for its federally insured and consumer loan portfolios for the three months ended March 31, 2021 due to management's estimate of certain continued improved economic conditions (including the improvement in certain macroeconomic variables (unemployment rates, gross domestic product, and consumer price index) used in the Company's loan loss models) as of March 31, 2021 in comparison to management's estimate of economic conditions used to determine the allowance for loan losses as of December 31, 2020. The Company recorded a provision expense on its private education loan portfolio during the three months ended March 31, 2021 as a result of an increase of loans in forbearance, which was partially offset by management's estimate of certain continued improved economic conditions as of March 31, 2021 in comparison to management's estimate of economic conditions used to determine the allowance for loan losses as of December 31, 2020.
Loan Status and Delinquencies
The key credit quality indicators for the Company's federally insured, private education, and consumer loan portfolios are loan status, including delinquencies. The impact of changes in loan status is incorporated into the allowance for loan losses calculation. 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 status and delinquency amounts.
As of March 31, 2021As of December 31, 2020As of March 31, 2020
Federally insured loans:    
Loans in-school/grace/deferment $1,006,605 5.4 % $1,036,028 5.4 % $1,111,139 5.5 %
Loans in forbearance 1,936,553 10.4  1,973,175 10.3  2,131,735 10.6 
Loans in repayment status:  
Loans current13,787,038 88.0 %13,683,054 84.9 %14,618,767 86.3 %
Loans delinquent 31-60 days425,599 2.7 633,411 3.9 581,665 3.4 
Loans delinquent 61-90 days234,871 1.5 307,936 1.9 405,575 2.4 
Loans delinquent 91-120 days125,471 0.8 800,257 5.0 267,145 1.6 
Loans delinquent 121-270 days1,026,050 6.6 674,975 4.2 756,241 4.5 
Loans delinquent 271 days or greater63,196 0.4 20,337 0.1 312,785 1.8 
Total loans in repayment15,662,225 84.2 100.0 %16,119,970 84.3 100.0 %16,942,178 83.9 100.0 %
Total federally insured loans18,605,383 100.0 % 19,129,173 100.0 % 20,185,052 100.0 %
Accrued interest receivable791,199 791,453 763,924 
Loan discount, net of unamortized premiums and deferred origination costs(14,608)(14,505)(5,732)
Allowance for loan losses(121,846)(128,590)(146,759)
Total federally insured loans and accrued interest receivable, net of allowance for loan losses$19,260,128 $19,777,531 $20,796,485 
Private education loans:
Loans in-school/grace/deferment $10,405 3.3 %$5,049 1.6 %$4,783 1.7 %
Loans in forbearance 7,567 2.4 2,359 0.7 11,428 4.2 
Loans in repayment status:
Loans current292,840 98.9 %310,036 99.0 %252,611 97.9 %
Loans delinquent 31-60 days1,343 0.5 1,099 0.4 1,606 0.6 
Loans delinquent 61-90 days843 0.3 675 0.2 961 0.4 
Loans delinquent 91 days or greater1,050 0.3 1,371 0.4 2,821 1.1 
Total loans in repayment296,076 94.3 100.0 %313,181 97.7 100.0 %257,999 94.1 100.0 %
Total private education loans314,048 100.0 % 320,589 100.0 % 274,210 100.0 %
Accrued interest receivable2,303 2,131 1,716 
Loan premium, net of unaccreted discount2,673 2,691 (138)
Allowance for loan losses(20,670)(19,529)(23,056)
Total private education loans and accrued interest receivable, net of allowance for loan losses$298,354 $305,882 $252,732 
Private education loans - Nelnet Bank:
Loans in-school/grace/deferment$82 0.1 %$— — %
Loans in forbearance29 — 29 0.2 
Loans in repayment status:
Loans current79,120 100.0 %17,514 100.0 %
Loans delinquent 31-60 days— — — — 
Loans delinquent 61-90 days— — — — 
Loans delinquent 91 days or greater— — — — 
Total loans in repayment79,120 99.9 100.0 %17,514 99.8 100.0 %
Total private education loans79,231 100.0 %17,543 100.0 %
Accrued interest receivable125 26 
Loan premium, net of unaccreted discount999 266 
Allowance for loan losses(744)(323)
Total private education loans and accrued interest receivable, net of allowance for loan losses$79,611 $17,512 
Consumer loans:
Loans in deferment$306 0.3 %$829 0.8 %$— 
Loans in repayment status:
Loans current108,126 97.9 %105,650 97.4 %141,840 97.3 %
Loans delinquent 31-60 days760 0.7 954 0.9 1,525 1.0 
Loans delinquent 61-90 days577 0.5 804 0.7 851 0.6 
Loans delinquent 91 days or greater1,023 0.9 1,109 1.0 1,587 1.1 
Total loans in repayment110,486 99.7 100.0 %108,517 99.2 100.0 %145,803 100.0 %
Total consumer loans110,792 100.0 %109,346 100.0 %145,803 
Accrued interest receivable934 1,001 1,133 
Loan premium1,845 1,640 1,108 
Allowance for loan losses(14,134)(27,256)(39,053)
Total consumer loans and accrued interest receivable, net of allowance for loan losses$99,437 $84,731 $108,991 

Nonaccrual Status
The Company does not place federally insured loans on nonaccrual status due to the government guaranty. The amortized cost of private and consumer loans on nonaccrual status, as well as the allowance for loan losses related to such loans, as of December 31, 2020 and March 31, 2021, was not material.
Amortized Cost Basis by Origination Year
The following table presents the amortized cost of the Company's private education and consumer loans by loan status and delinquency amount as of March 31, 2021 based on year of origination. Effective July 1, 2010, no new loan originations can be made under the FFEL Program and all new federal loan originations must be made under the Federal Direct Loan Program. As such, all the Company’s federally insured loans were originated prior to July 1, 2010.
Three months ended March 31, 20212020201920182017Prior yearsTotal
Private education loans:
Loans in school/grace/deferment$216 2,159 4,948 — — 3,082 10,405 
Loans in forbearance— 488 1,288 131 — 5,660 7,567 
Loans in repayment status:
Loans current1,069 101,577 67,914 636 — 121,644 292,840 
Loans delinquent 31-60 days— 10 114 — — 1,219 1,343 
Loans delinquent 61-90 days— — 59 — — 784 843 
Loans delinquent 91 days or greater— — 120 — — 930 1,050 
Total loans in repayment1,069 101,587 68,207 636 — 124,577 296,076 
Total private education loans$1,285 104,234 74,443 767 — 133,319 314,048 
Accrued interest receivable2,303 
Loan premium, net of unaccreted discount2,673 
Allowance for loan losses(20,670)
Total private education loans and accrued interest receivable, net of allowance for loan losses$298,354 
Private education loans - Nelnet Bank:
Loans in school/grace/deferment$82 — — — — — 82 
Loans in forbearance— 29 — — — — 29 
Loans in repayment status:
Loans current62,647 16,473 — — — — 79,120 
Loans delinquent 31-60 days— — — — — — — 
Loans delinquent 61-90 days— — — — — — — 
Loans delinquent 91 days or greater— — — — — — — 
Total loans in repayment62,647 16,473 — — — — 79,120 
Total private education loans$62,729 16,502 — — — — 79,231 
Accrued interest receivable125 
Loan premium, net of unaccreted discount999 
Allowance for loan losses(744)
Total private education loans and accrued interest receivable, net of allowance for loan losses$79,611 
Consumer loans:
Loans in deferment$— 33 177 96 — — 306 
Loans in repayment status:
Loans current18,713 51,409 18,771 17,360 1,873 — 108,126 
Loans delinquent 31-60 days— 339 272 120 29 — 760 
Loans delinquent 61-90 days— 311 185 64 17 — 577 
Loans delinquent 91 days or greater— 312 297 404 10 — 1,023 
Total loans in repayment18,713 52,371 19,525 17,948 1,929 — 110,486 
Total consumer loans$18,713 52,404 19,702 18,044 1,929 — 110,792 
Accrued interest receivable934 
Loan premium1,845 
Allowance for loan losses(14,134)
Total consumer loans and accrued interest receivable, net of allowance for loan losses$99,437 
v3.21.1
Bonds and Notes Payable
3 Months Ended
Mar. 31, 2021
Debt Disclosure [Abstract]  
Bonds and Notes Payable Bonds and Notes Payable
The following tables summarize the Company’s outstanding debt obligations by type of instrument:
 As of March 31, 2021
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$16,716,369 
0.19% - 2.11%
5/27/25 - 10/25/68
Bonds and notes based on auction747,075 
1.07% - 2.15%
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes17,463,444 
Fixed-rate bonds and notes issued in FFELP loan asset-backed securitizations
915,947 
1.42% - 3.45%
10/25/67 / 8/27/68
FFELP warehouse facilities247,018 
0.23%
5/20/22 / 2/26/24
Private education loan warehouse facility158,197 0.26%2/13/23
Variable-rate bonds and notes issued in private education loan asset-backed securitizations
44,844 
1.65% / 1.86%
12/26/40 / 6/25/49
Fixed-rate bonds and notes issued in private education loan asset-backed securitization
35,196 
3.60% / 5.35%
12/26/40 / 12/28/43
Unsecured line of credit— 12/16/24
Other borrowings118,537 
0.81% / 1.86%
5/4/21 / 5/30/22
 18,983,183   
Discount on bonds and notes payable and debt issuance costs(228,468)
Total$18,754,715 

 As of December 31, 2020
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$17,127,643 
0.28% - 2.05%
5/27/25 - 10/25/68
Bonds and notes based on auction749,925 
1.12% - 2.14%
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes17,877,568 
Fixed-rate bonds and notes issued in FFELP loan asset-backed securitizations923,076 
1.42% - 3.45%
10/25/67 - 8/27/68
FFELP warehouse facilities252,165 
0.27% / 0.31%
5/20/22 / 2/26/23
Private education loan warehouse facility150,397 0.28%2/13/22
Consumer loan warehouse facility25,809 0.28%4/23/22
Variable-rate bonds and notes issued in private education loan asset-backed securitizations49,025 
1.65% / 1.90%
12/26/40 / 6/25/49
Fixed-rate bonds and notes issued in private education loan asset-backed securitization37,251 
3.60% / 5.35%
12/26/40 / 12/28/43
Unsecured line of credit120,000 1.65%12/16/24
Other borrowings123,558 
0.84% / 1.90%
5/4/21 / 5/30/22
 19,558,849   
Discount on bonds and notes payable and debt issuance costs(238,123)
Total$19,320,726 
FFELP Warehouse Facilities
The Company funds the majority 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 March 31, 2021, the Company had two FFELP warehouse facilities as summarized below.
NFSLW-INHELP-II (a)Total
Maximum financing amount
$260,000 50,000 310,000 
Amount outstanding247,018 — 247,018 
Amount available$12,982 50,000 62,982 
Expiration of liquidity provisions
May 20, 2021February 26, 2022
Final maturity dateMay 20, 2022February 26, 2024
Advanced as equity support$20,529 — 20,529 

(a)    On February 26, 2021, the Company extended the expiration of liquidity provisions and the maturity date for this warehouse facility an additional year to February 26, 2022 and February 26, 2024, respectively.

Private Education Loan Warehouse Facility
During 2020, the Company obtained a private education loan warehouse facility that had an aggregate maximum financing amount available of $200.0 million. On February 12, 2021, the Company decreased the maximum financing amount available for this facility to $175.0 million and extended the liquidity provisions and final maturity date to February 13, 2022 and February 13, 2023, respectively. As of March 31, 2021, $158.2 million was outstanding under this warehouse facility and $16.8 million was available for future funding. The facility has an advance rate of 80 to 90 percent and, as of March 31, 2021, the Company had $17.0 million advanced as equity support under this facility.
Consumer Loan Warehouse Facility
The Company had a $100.0 million consumer loan warehouse facility. On March 31, 2021, the Company terminated this facility.
Unsecured Line of Credit
The Company has a $455.0 million unsecured line of credit that has a maturity date of December 16, 2024. As of March 31, 2021, no amount was outstanding on the line of credit and $455.0 million was available for future use. The line of credit provides that the Company may increase the aggregate financing commitments, through the existing lenders and/or through new lenders, up to a total of $550.0 million, subject to certain conditions.
Other Borrowings
The Company has an agreement with Union Bank and Trust Company ("Union Bank"), a related party, as trustee for various grantor trusts, under which Union Bank has agreed to purchase from the Company participation interests in student loan asset-backed securities. As of March 31, 2021, $113.5 million of student loan asset-backed securities 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. The Company can participate student loan asset-backed securities to Union Bank to the extent of availability under the grantor trusts, up to $100.0 million or an amount in excess of $100.0 million if mutually agreed to by both parties. Student loan asset-backed securities under this agreement have been accounted for by the Company as a secured borrowing.
Accrued Interest Liability
During the first quarter of 2021, the Company reversed a historical accrued interest liability of $23.8 million on certain bonds, which liability the Company determined is no longer probable of being required to be paid. The liability was initially recorded when certain asset-backed securitizations were acquired in 2011 and 2013. The reduction of this liability is reflected in (a reduction of) "interest on bonds and notes payable and bank deposits" in the consolidated statements of operations.
v3.21.1
Derivative Financial Instruments
3 Months Ended
Mar. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
The Company uses derivative financial instruments to manage interest rate risk. Derivative instruments used as part of the Company's risk management strategy are further described in note 6 of the notes to consolidated financial statements included in the 2020 Annual Report. A tabular presentation of such derivatives outstanding as of March 31, 2021 and December 31, 2020 is presented below.
Basis Swaps
The following table summarizes the Company’s outstanding basis swaps as of March 31, 2021 and December 31, 2020, 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").
MaturityNotional amount
2021$250,000 
20222,000,000 
2023750,000 
20241,750,000 
20261,150,000 
2027250,000 
$6,150,000 

The weighted average rate paid by the Company on the 1:3 Basis Swaps as of March 31, 2021 and December 31, 2020 was one-month LIBOR plus 9.1 basis points.
Interest Rate Swaps – Floor Income Hedges
The following table summarizes the outstanding derivative instruments used by the Company to economically hedge loans earning fixed rate floor income.
As of March 31, 2021As of December 31, 2020
MaturityNotional amountWeighted average fixed rate paid by the Company (a)Notional amountWeighted average fixed rate paid by the Company (a)
2021$600,000 2.15 %$600,000 2.15 %
2022 (b)500,000 0.94 500,000 0.94 
2023900,000 0.62 900,000 0.62 
2024 (c)2,500,000 0.35 2,000,000 0.32 
2025500,000 0.35 500,000 0.35 
 $5,000,000 0.67 %$4,500,000 0.70 %

(a)    For all interest rate derivatives, the Company receives discrete three-month LIBOR.
(b)    $250.0 million of the derivatives outstanding at March 31, 2021 and December 31, 2020 have forward effective start dates in June 2021.
(c)    $500.0 million of the derivatives outstanding at March 31, 2021 and December 31, 2020 have forward effective start dates in June 2021.
Consolidated Financial Statement Impact Related to Derivatives - Statements of Operations
The following table summarizes the components of "derivative market value adjustments and derivative settlements, net" included in the consolidated statements of operations.
Three months ended March 31,
 20212020
Settlements:  
1:3 basis swaps$(19)2,112 
Interest rate swaps - floor income hedges(4,285)