NELNET INC, 10-Q filed on 11/6/2014
Quarterly Report
Document and Entity Information Document (USD $)
9 Months Ended
Sep. 30, 2014
Jun. 28, 2013
Oct. 31, 2014
Common Class A [Member]
Oct. 31, 2014
Common Class B [Member]
Document Information [Line Items]
 
 
 
 
Entity Registrant Name
NELNET INC 
 
 
 
Document Type
10-Q 
 
 
 
Current Fiscal Year End Date
--12-31 
 
 
 
Entity Common Stock, Shares Outstanding
 
 
34,772,102 
11,486,932 
Entity Public Float
 
$ 940,529,760.75 
 
 
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
No 
 
 
 
Document Period End Date
Sep. 30, 2014 
 
 
 
Document Fiscal Year Focus
2014 
 
 
 
Document Fiscal Period Focus
Q3 
 
 
 
Consolidated Balance Sheets (unaudited) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Assets:
 
 
Student loans receivable (net of allowance for loan losses)
$ 28,701,344 
$ 25,907,589 
Cash and cash equivalents:
 
 
Cash and cash equivalents - not held at a related party
32,610 
8,537 
Cash and cash equivalents - held at a related party
41,969 
54,730 
Total cash and cash equivalents
74,579 
63,267 
Investments
147,780 
192,040 
Restricted cash and investments
867,507 
735,123 
Restricted cash - due to customers
72,836 
167,576 
Accrued interest receivable
352,205 
314,553 
Accounts receivable (net of allowance for doubtful accounts)
59,510 
56,072 
Goodwill
126,200 
117,118 
Intangible assets, net
42,876 
6,132 
Property and equipment, net
44,647 
33,829 
Other assets
141,156 
115,043 
Fair value of derivative instruments
68,009 
62,507 
Total assets
30,698,649 
27,770,849 
Liabilities:
 
 
Bonds and notes payable
28,737,456 
25,955,289 
Accrued interest payable
25,221 
21,725 
Other liabilities
190,765 
164,300 
Due to customers
72,836 
167,576 
Fair value of derivative instruments
14,814 
17,969 
Total liabilities
29,041,092 
26,326,859 
Nelnet, Inc. shareholders' equity:
 
 
Preferred stock
0 
0 
Additional paid-in capital
18,150 
24,887 
Retained earnings
1,633,577 
1,413,492 
Accumulated other comprehensive earnings
5,099 
4,819 
Total Nelnet, Inc. shareholders' equity
1,657,289 
1,443,662 
Noncontrolling interest
268 
328 
Total equity
1,657,557 
1,443,990 
Total liabilities and equity
30,698,649 
27,770,849 
Common Class A [Member]
 
 
Nelnet, Inc. shareholders' equity:
 
 
Common stock
348 
349 
Total equity
348 
349 
Common Class B [Member]
 
 
Nelnet, Inc. shareholders' equity:
 
 
Common stock
115 
115 
Total equity
115 
115 
Variable Interest Entity, Primary Beneficiary [Member]
 
 
Assets:
 
 
Student loans receivable (net of allowance for loan losses)
28,831,931 
26,020,629 
Cash and cash equivalents:
 
 
Restricted cash and investments
863,960 
732,771 
Other assets
351,516 
313,748 
Fair value of derivative instruments
(3,427)
36,834 
Liabilities:
 
 
Bonds and notes payable
29,084,859 
26,244,222 
Other liabilities
340,630 
303,142 
Equity:
 
 
Net assets of consolidated variable interest entities
$ 618,491 
$ 556,618 
Consolidated Balance Sheets (unaudited) (Parentheticals) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Allowance for loan losses
$ 51,968 
$ 55,122 
Allowance for doubtful accounts
$ 1,842 
$ 3,845 
Preferred stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, authorized shares
50,000,000 
50,000,000 
Preferred stock, issued shares
0 
0 
Preferred stock, outstanding shares
0 
0 
Common Class A [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized
600,000,000 
600,000,000 
Shares Issued
34,796,723 
34,881,338 
Shares Outstanding
34,796,723 
34,881,338 
Common Class B [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized
60,000,000 
60,000,000 
Shares Issued
11,486,932 
11,495,377 
Shares Outstanding
11,486,932 
11,495,377 
Consolidated Statements of Income (unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Interest income:
 
 
 
 
Loan interest
$ 187,862 
$ 158,675 
$ 520,224 
$ 472,277 
Investment interest
1,562 
1,562 
5,023 
4,662 
Total interest income
189,424 
160,237 
525,247 
476,939 
Interest expense:
 
 
 
 
Interest on bonds and notes payable
71,937 
55,315 
201,176 
171,800 
Net interest income
117,487 
104,922 
324,071 
305,139 
Less provision for loan losses
2,000 
5,000 
6,000 
15,000 
Net interest income after provision for loan losses
115,487 
99,922 
318,071 
290,139 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
52,659 
64,582 
183,876 
180,261 
Tuition payment processing and campus commerce revenue
26,399 
19,927 
73,468 
61,694 
Enrollment services revenue
22,936 
22,563 
65,092 
76,343 
Other income
7,650 
8,613 
41,096 
30,317 
Gain on sale of loans and debt repurchases
0 
2,138 
57 
10,900 
Derivative market value and foreign currency adjustments and derivative settlements, net
24,203 
(16,648)
21,508 
24,612 
Total other income (expense)
133,847 
101,175 
385,097 
384,127 
Operating expenses:
 
 
 
 
Salaries and benefits
61,098 
48,712 
167,470 
144,049 
Cost of Services
14,178 
14,668 
41,964 
51,097 
Depreciation and amortization
5,493 
4,340 
15,490 
13,037 
Other
36,676 
39,887 
112,680 
109,193 
Total operating expenses
117,445 
107,607 
337,604 
317,376 
Income before income taxes
131,889 
93,490 
365,564 
356,890 
Income tax expense
(46,513)
(30,444)
(130,202)
(123,637)
Net income
85,376 
63,046 
235,362 
233,253 
Net income attributable to noncontrolling interest
157 
216 
1,363 
1,101 
Net income attributable to Nelnet, Inc.
$ 85,219 
$ 62,830 
$ 233,999 
$ 232,152 
Earnings per common share:
 
 
 
 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
$ 1.84 
$ 1.35 
$ 5.03 
$ 4.98 
Weighted average common shares outstanding - basic and diluted
46,432,680 
46,496,612 
46,496,309 
46,593,241 
Consolidated Statements of Comprehensive Income (unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Net income
$ 85,376 
$ 63,046 
$ 235,362 
$ 233,253 
Available-for-sale securities:
 
 
 
 
Unrealized holding gains (losses) arising during period, net
(738)
5,689 
8,763 
6,875 
Less reclassification adjustment for gains recognized in net income, net
(8)
(730)
(8,319)
(2,246)
Income tax effect
276 
(1,834)
(164)
(1,720)
Total other comprehensive income (loss)
(470)
3,125 
280 
2,909 
Comprehensive income
84,906 
66,171 
235,642 
236,162 
Comprehensive income attributable to noncontrolling interest
157 
216 
1,363 
1,101 
Comprehensive income attributable to Nelnet, Inc.
$ 84,749 
$ 65,955 
$ 234,279 
$ 235,061 
Consolidated Statements of Shareholders' Equity (unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Preferred Stock [Member]
Common Class A [Member]
Common Class B [Member]
Additional paid-in capital [Member]
Retained earnings [Member]
Accumulated other comprehensive earnings [Member]
Noncontrolling interest [Member]
Balance at Jun. 30, 2013
$ 1,319,595 
$ 0 
$ 350 
$ 115 
$ 27,004 
$ 1,289,416 
$ 2,597 
$ 113 
Balance (in Shares) at Jun. 30, 2013
 
0 
34,988,110 
11,495,377 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
62,830 
 
 
 
 
62,830 
 
 
Net income attributable to noncontrolling interest
216 
 
 
 
 
 
 
216 
Net income
63,046 
 
 
 
 
 
 
 
Other comprehensive income (loss)
3,125 
 
 
 
 
 
3,125 
 
Distribution to noncontrolling interest
(279)
 
 
 
 
 
 
(279)
Cash dividend on Class A and Class B common stock
(4,637)
 
 
 
 
(4,637)
 
 
Issuance of common stock, net of forfeitures
264 
 
0 
0 
264 
 
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
(745)
0 
 
 
 
 
Compensation expense for stock based awards
824 
 
 
 
824 
 
 
 
Repurchase of common stock
(4,025)
 
(1)
0 
(4,024)
 
 
 
Repurchase of common stock (in Shares)
 
 
(111,220)
0 
 
 
 
 
Balance at Sep. 30, 2013
1,377,913 
0 
349 
115 
24,068 
1,347,609 
5,722 
50 
Balance (in Shares) at Sep. 30, 2013
 
0 
34,876,145 
11,495,377 
 
 
 
 
Balance at Dec. 31, 2012
1,165,213 
0 
351 
115 
32,540 
1,129,389 
2,813 
5 
Balance (in Shares) at Dec. 31, 2012
 
0 
35,116,913 
11,495,377 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
232,152 
 
 
 
 
232,152 
 
 
Net income attributable to noncontrolling interest
1,101 
 
 
 
 
 
 
1,101 
Noncontrolling Interest, Increase from Sale of Parent Equity Interest
5 
 
 
 
 
 
 
5 
Net income
233,253 
 
 
 
 
 
 
 
Other comprehensive income (loss)
2,909 
 
 
 
 
 
2,909 
 
Distribution to noncontrolling interest
(1,061)
 
 
 
 
 
 
(1,061)
Cash dividend on Class A and Class B common stock
(13,932)
 
 
 
 
(13,932)
 
 
Issuance of common stock, net of forfeitures
2,233 
 
2 
0 
2,231 
 
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
149,608 
0 
 
 
 
 
Compensation expense for stock based awards
2,308 
 
 
 
2,308 
 
 
 
Repurchase of common stock
(13,015)
 
(4)
0 
(13,011)
 
 
 
Repurchase of common stock (in Shares)
 
 
(390,376)
0 
 
 
 
 
Balance at Sep. 30, 2013
1,377,913 
0 
349 
115 
24,068 
1,347,609 
5,722 
50 
Balance (in Shares) at Sep. 30, 2013
 
0 
34,876,145 
11,495,377 
 
 
 
 
Balance at Dec. 31, 2013
1,443,990 
0 
349 
115 
24,887 
1,413,492 
4,819 
328 
Balance (in Shares) at Dec. 31, 2013
 
0 
34,881,338 
11,495,377 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
233,999 
 
 
 
 
233,999 
 
 
Net income attributable to noncontrolling interest
1,363 
 
 
 
 
 
 
1,363 
Noncontrolling Interest, Increase from Sale of Parent Equity Interest
201 
 
 
 
 
 
 
201 
Net income
235,362 
 
 
 
 
 
 
 
Other comprehensive income (loss)
280 
 
 
 
 
 
280 
 
Distribution to noncontrolling interest
(1,624)
 
 
 
 
 
 
(1,624)
Cash dividend on Class A and Class B common stock
(13,914)
 
 
 
 
(13,914)
 
 
Issuance of common stock, net of forfeitures
3,341 
 
2 
0 
3,339 
 
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
234,236 
0 
 
 
 
 
Compensation expense for stock based awards
3,258 
 
 
 
3,258 
 
 
 
Repurchase of common stock
(13,337)
 
(3)
0 
(13,334)
 
 
 
Conversion of Common Stock, Shares Converted
 
 
8,445 
(8,445)
 
 
 
 
Conversion of Common Stock, Amount Converted
0 
 
0 
0 
 
 
 
 
Repurchase of common stock (in Shares)
 
 
(327,296)
0 
 
 
 
 
Balance at Sep. 30, 2014
1,657,557 
0 
348 
115 
18,150 
1,633,577 
5,099 
268 
Balance (in Shares) at Sep. 30, 2014
 
0 
34,796,723 
11,486,932 
 
 
 
 
Balance at Jun. 30, 2014
1,580,128 
0 
349 
115 
20,721 
1,552,988 
5,569 
386 
Balance (in Shares) at Jun. 30, 2014
 
0 
34,859,786 
11,491,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
85,219 
 
 
 
 
85,219 
 
 
Net income attributable to noncontrolling interest
157 
 
 
 
 
 
 
157 
Net income
85,376 
 
 
 
 
 
 
 
Other comprehensive income (loss)
(470)
 
 
 
 
 
(470)
 
Distribution to noncontrolling interest
(275)
 
 
 
 
 
 
(275)
Cash dividend on Class A and Class B common stock
(4,630)
 
 
 
 
(4,630)
 
 
Issuance of common stock, net of forfeitures
213 
 
0 
0 
213 
 
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
28,729 
0 
 
 
 
 
Compensation expense for stock based awards
1,248 
 
 
 
1,248 
 
 
 
Repurchase of common stock
(4,033)
 
(1)
0 
(4,032)
 
 
 
Conversion of Common Stock, Shares Converted
 
 
5,000 
(5,000)
 
 
 
 
Conversion of Common Stock, Amount Converted
0 
 
0 
0 
 
 
 
 
Repurchase of common stock (in Shares)
 
 
(96,792)
0 
 
 
 
 
Balance at Sep. 30, 2014
$ 1,657,557 
$ 0 
$ 348 
$ 115 
$ 18,150 
$ 1,633,577 
$ 5,099 
$ 268 
Balance (in Shares) at Sep. 30, 2014
 
0 
34,796,723 
11,486,932 
 
 
 
 
Consolidated Statements of Shareholders' Equity (unaudited) (Parentheticals)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Common Class A [Member]
 
 
 
 
Dividends paid per common share
$ 0.10 
$ 0.10 
$ 0.30 
$ 0.30 
Common Class B [Member]
 
 
 
 
Dividends paid per common share
$ 0.10 
$ 0.10 
$ 0.30 
$ 0.30 
Consolidated Statements of Cash Flows (unaudited) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Net income attributable to Nelnet, Inc.
$ 233,999 
$ 232,152 
Net income attributable to noncontrolling interest
1,363 
1,101 
Net income
235,362 
233,253 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization, including debt discounts and student loan premiums and deferred origination costs
78,318 
58,330 
Student loan discount accretion
(32,393)
(26,333)
Provision for loan losses
6,000 
15,000 
Derivative market value adjustment
431 
(73,743)
Foreign currency transaction adjustment
(39,216)
25,902 
Payment for interest rate swap option
(9,087)
0 
Payments to terminate and/or amend derivative instruments, net of proceeds
0 
(6,469)
Gain on sale of loans
0 
(34)
Gain from debt repurchases
(57)
(10,866)
Gain from sales of available-for-sale securities, net
(8,319)
(2,246)
Purchases of student loans - held for sale
0 
(28,480)
Purchases of trading securities, net
(3,380)
0 
Deferred income tax expense (benefit)
21,391 
13,279 
Non-cash compensation expense
3,364 
2,513 
Other
5,638 
44 
Decrease in accrued interest receivable
4,303 
4,168 
(Increase) decrease in accounts receivable
(1,884)
687 
Decrease (increase) in other assets
2,723 
(2,445)
Increase (decrease) in accrued interest payable
2,314 
(552)
(Decrease) increase in other liabilities
(2,441)
598 
Net cash provided by operating activities
263,067 
202,606 
Cash flows from investing activities, net of acquisitions:
 
 
Purchases of student loans and student loan residual interests
(3,211,153)
(1,696,253)
Purchases Of Student Loans From Related Party
(175)
(466,941)
Net proceeds from student loan repayments, claims, capitalized interest, participations, and other
2,721,886 
2,269,253 
Proceeds from sale of student loans
8 
11,287 
Purchases of available-for-sale securities
(143,695)
(196,657)
Proceeds from sales of available-for-sale securities
200,098 
52,733 
Purchases of other investments, net
(35,454)
(8,316)
Repayments of notes and other receivables
11,006 
0 
Purchases of property and equipment, net
(21,691)
(11,720)
(Increase) Decrease in restricted cash and investments
(32,720)
140,536 
Business acquisition, net of cash acquired
(45,583)
0 
Net cash (used in) provided by investing activities
(557,473)
93,922 
Cash flows from financing activities, net of borrowings assumed:
 
 
Payments on bonds and notes payable
(3,013,378)
(4,159,079)
Proceeds from issuance of bonds and notes payable
3,362,227 
3,888,772 
Payments of debt issuance costs
(14,933)
(13,295)
Dividends paid
(13,914)
(13,932)
Repurchases of common stock
(13,337)
(13,015)
Proceeds from issuance of common stock
476 
437 
Issuance of noncontrolling interest
201 
5 
Distribution to noncontrolling interest
(1,624)
(1,061)
Net cash provided by (used in) financing activities
305,718 
(311,168)
Net increase (decrease) in cash and cash equivalents
11,312 
(14,640)
Cash and cash equivalents, beginning of period
63,267 
66,031 
Cash and cash equivalents, end of period
74,579 
51,391 
Supplemental disclosures of cash flow information:
 
 
Interest paid
155,962 
148,482 
Income taxes paid, net of refunds
118,866 
114,744 
Noncash activity:
 
 
Investing activity - student loans and other assets acquired
2,571,997 
0 
Financing activity - borrowings and other liabilities assumed in acquisition of student loans
$ 2,444,874 
$ 0 
Basis of Financial Reporting
Basis of Financial Reporting
Basis of Financial Reporting

The accompanying unaudited consolidated financial statements of Nelnet, Inc. and subsidiaries (the “Company”) as of September 30, 2014 and for the three and nine months ended September 30, 2014 and 2013 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2013 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results for the year ending December 31, 2014. 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, 2013 (the "2013 Annual Report").

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

Student loans receivable consisted of the following:
 
As of
 
As of
 
September 30, 2014
 
December 31, 2013
Federally insured loans
 
 
 
Stafford and other
$
6,218,910

 
6,686,626

Consolidation
22,632,689

 
19,363,577

Total
28,851,599

 
26,050,203

Non-federally insured loans
77,623

 
71,103

 
28,929,222

 
26,121,306

Loan discount, net of unamortized loan premiums and deferred origination costs (a)
(175,910
)
 
(158,595
)
Allowance for loan losses – federally insured loans
(39,470
)
 
(43,440
)
Allowance for loan losses – non-federally insured loans
(12,498
)
 
(11,682
)
 
$
28,701,344

 
25,907,589



(a)
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. As of September 30, 2014 and December 31, 2013, "loan discount, net of unamortized loan premiums and deferred origination costs" included $28.8 million and $20.2 million, respectively, of non-accretable discount associated with purchased loans of $8.4 billion and $4.4 billion, respectively.

Student Loan Residual Interests

On April 25, 2014, the Company acquired the ownership interest in three Federal Family Education Loan Program ("FFEL Program" or "FFELP") student loan securitization trusts giving the Company rights to the residual interest in a total of $2.6 billion of securitized federally insured loans and related assets. The three trusts include loans funded to term with $2.6 billion (par value) of notes payable that carry interest rates on a spread to LIBOR or are set and periodically reset via a "dutch auction".

The Company has consolidated these trusts on its consolidated balance sheet because management has determined the Company is the primary beneficiary of the trusts. Upon acquisition, the Company recorded all assets and liabilities of the trusts at fair value, resulting in the recognition of a student loan discount of $68.7 million and a notes payable discount of $163.7 million. These discounts will be accreted using the effective interest method over the lives of the underlying assets and liabilities. All other assets acquired and liabilities assumed (restricted cash, accrued interest receivable/payable, and other assets/liabilities) were recorded at cost, which approximates fair value.

Activity in the Allowance for Loan Losses

The provision for loan losses represents the periodic expense of maintaining an allowance appropriate to absorb losses, net of recoveries, inherent in the portfolio of student loans. Activity in the allowance for loan losses is shown below.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013
 
2014
 
2013
Balance at beginning of period
$
52,467

 
51,611

 
55,122

 
51,902

Provision for loan losses:
 
 
 
 
 

 
 

Federally insured loans
2,000

 
5,000

 
7,000

 
16,000

Non-federally insured loans
—

 
—

 
(1,000
)
 
(1,000
)
Total provision for loan losses
2,000

 
5,000

 
6,000

 
15,000

Charge-offs:
 

 
 

 
 

 
 

Federally insured loans
(3,521
)
 
(3,142
)
 
(11,290
)
 
(12,472
)
Non-federally insured loans
(623
)
 
(906
)
 
(1,642
)
 
(2,270
)
Total charge-offs
(4,144
)
 
(4,048
)
 
(12,932
)
 
(14,742
)
Recoveries - non-federally insured loans
279

 
363

 
989

 
1,173

Purchase (sale) of federally insured loans, net
70

 
700

 
320

 
(1,243
)
Transfer from repurchase obligation related to non-federally insured loans repurchased, net
1,296

 
571

 
2,469

 
2,107

Balance at end of period
$
51,968

 
54,197

 
51,968

 
54,197

 
 
 
 
 
 
 
 
Allocation of the allowance for loan losses:
 
 
 

 
 

 
 

Federally insured loans
$
39,470

 
42,406

 
39,470

 
42,406

Non-federally insured loans
12,498

 
11,791

 
12,498

 
11,791

Total allowance for loan losses
$
51,968

 
54,197

 
51,968

 
54,197


Repurchase Obligations

As of September 30, 2014, the Company had participated a cumulative amount of $103.6 million (par value) of non-federally insured loans to third parties. Loans participated under these agreements have been accounted for by the Company as loan sales. Accordingly, the participation interests sold are not included in the Company’s consolidated balance sheets. Per the terms of the servicing agreements, the Company’s servicing operations are obligated to repurchase loans subject to the participation interests in the event such loans become 60 days or 90 days delinquent.

In addition, in 2011, the Company sold a portfolio of non-federally insured loans for proceeds of $91.3 million (100% of par value).  The Company retained credit risk related to this portfolio and will pay cash to purchase back any loans which become 60 days delinquent. As of September 30, 2014, the balance of this portfolio was $57.0 million (par value).

The Company’s estimate related to its obligation to repurchase these loans is included in “other liabilities” in the Company’s consolidated balance sheets. The activity related to this accrual is detailed below.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013
 
2014
 
2013
Beginning balance
$
14,827

 
14,594

 
16,143

 
16,130

Loans repurchased
(1,296
)
 
(571
)
 
(2,612
)
 
(2,107
)
Ending balance
$
13,531

 
14,023

 
13,531

 
14,023


Student Loan Status and Delinquencies

Delinquencies have the potential to adversely impact the Company’s earnings through increased servicing and collection costs and account charge-offs.  The percent of non-federally insured loans that were delinquent 31 days or greater as of September 30, 2014, December 31, 2013, and September 30, 2013 was 11.7 percent, 12.7 percent, and 13.4 percent, respectively. The table below shows the Company’s federally insured student loan delinquency amounts.

 
As of September 30, 2014
 
As of December 31, 2013
 
As of September 30, 2013
Federally insured loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
3,072,318

 
 
 
$
2,872,505

 
 
 
$
3,039,819

 
 
Loans in forbearance
3,505,103

 
 
 
3,370,025

 
 
 
3,396,748

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
18,672,178

 
83.8
%
 
16,337,922

 
82.5
%
 
15,236,060

 
83.1
%
Loans delinquent 31-60 days
990,696

 
4.5

 
967,318

 
4.9

 
851,397

 
4.6

Loans delinquent 61-90 days
569,879

 
2.6

 
550,333

 
2.8

 
480,285

 
2.6

Loans delinquent 91-120 days
452,463

 
2.0

 
390,791

 
2.0

 
372,697

 
2.0

Loans delinquent 121-270 days
1,183,616

 
5.3

 
1,117,936

 
5.6

 
978,234

 
5.3

Loans delinquent 271 days or greater
405,346

 
1.8

 
443,373

 
2.2

 
437,337

 
2.4

Total loans in repayment
22,274,178

 
100.0
%
 
19,807,673

 
100.0
%
 
18,356,010

 
100.0
%
Total federally insured loans
$
28,851,599

 
 

 
$
26,050,203

 
 

 
$
24,792,577

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

The following tables summarize the Company’s outstanding debt obligations by type of instrument:
 
As of September 30, 2014
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
26,639,879

 
0.24% - 6.90%
 
5/25/18 - 8/26/52
Bonds and notes based on auction or remarketing
1,557,875

 
0.07% - 2.11%
 
5/1/28 - 11/26/46
Total variable-rate bonds and notes
28,197,754

 
 
 
 
FFELP warehouse facilities
787,042

 
0.16% - 0.25%
 
1/17/16 - 6/11/17
Unsecured line of credit
—

 
—
 
6/30/19
Unsecured debt - Junior Subordinated Hybrid Securities
96,457

 
3.61%
 
9/15/61
Other borrowings
63,504

 
1.66% - 5.10%
 
11/14/14 - 12/31/18
 
29,144,757

 
 
 
 
Discount on bonds and notes payable
(407,301
)
 
 
 
 
Total
$
28,737,456

 
 
 
 
 
As of December 31, 2013
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
23,479,893

 
0.25% - 6.90%
 
5/25/18 - 8/26/52
Bonds and notes based on auction or remarketing
1,134,250

 
0.07% - 2.17%
 
5/1/28 - 11/26/46
Total variable-rate bonds and notes
24,614,143

 
 
 
 
FFELP warehouse facilities
1,396,344

 
0.17% - 0.25%
 
1/17/16 - 6/12/16
Unsecured line of credit
45,000

 
1.67%
 
3/28/18
Unsecured debt - Junior Subordinated Hybrid Securities
96,457

 
3.62%
 
9/15/61
Other borrowings
61,401

 
1.67% - 5.10%
 
4/11/14 - 11/11/15
 
26,213,345

 
 
 
 
Discount on bonds and notes payable
(258,056
)
 
 
 
 
Total
$
25,955,289

 
 
 
 


FFELP Warehouse Facilities

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

As of September 30, 2014, the Company had three FFELP warehouse facilities as summarized below.
 
 
NHELP-III
 
NHELP-II (a)
 
NFSLW-I (b)
 
Total
Maximum financing amount
 
$
750,000

 
500,000

 
500,000

 
1,750,000

Amount outstanding
 
438,265

 
40,433

 
308,344

 
787,042

Amount available
 
$
311,735

 
459,567

 
191,656

 
962,958

Expiration of liquidity provisions
 
February 5, 2015

 
December 17, 2014

 
June 11, 2015

 
 
Final maturity date
 
January 17, 2016

 
December 17, 2016

 
June 11, 2017

 
 
Maximum advance rates
 
92.2 - 95.0%

 
84.5 - 94.5%

 
92.0 - 98.0%

 
 
Minimum advance rates
 
92.2 - 95.0%

 
84.5 - 94.5%

 
84.0 - 90.0%

 
 
Advanced as equity support
 
$
26,264

 
4,195

 
14,778

 
45,237


(a)
On September 30, 2014, the Company amended the agreement for this warehouse facility to change the expiration date for the liquidity provisions to December 17, 2014, and change the maturity date to December 17, 2016.
(b)
On April 15, 2014, the Company amended the agreement for this warehouse facility to change the expiration date for the liquidity provisions to June 11, 2015, and change the maturity date to June 11, 2017.

Asset-backed Securitizations

The following table summarizes the asset-backed securitization transactions completed during the nine months ended September 30, 2014.
 
 
2014-1
 
2014-2
 
2014-3
 
2014-4
 
2014-5
 
2014-6 (a)
 
Total
 
 
 
 
Class A-1 notes
 
Class A-2 notes
 
Class A-3 notes
 
2014-2 total
 
 
 
Class A-1 notes
 
Class A-2 notes
 
2014-4 total
 
 
 
 
 
 
Date securities issued
 
2/6/14
 
3/12/14
 
3/12/14
 
3/12/14
 
3/12/14
 
4/30/14
 
5/23/14
 
5/23/14
 
5/23/14
 
6/18/14
 
7/31/14
 
 
Total original principal amount
 
$
458,500

 
 
 
 
 
 
 
509,000

 
719,800

 
 
 
 
 
384,500

 
603,000

 
565,000

 
$
3,239,800

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class A senior notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
$
445,000

 
191,000

 
222,000

 
84,000

 
497,000

 
700,700

 
267,500

 
107,500

 
375,000

 
587,000

 
565,000

 
3,169,700

Bond discount
 
—

 
—

 
—

 
(535
)
 
(535
)
 
—

 
—

 
—

 
—

 
—

 
(3,124
)
 
(3,659
)
Issue price
 
$
445,000

 
191,000

 
222,000

 
83,465

 
496,465

 
700,700

 
267,500

 
107,500

 
375,000

 
587,000

 
561,876

 
3,166,041

Cost of funds (1-month LIBOR plus:)
 
0.57
%
 
0.28
%
 
0.60
%
 
0.85
%
 
 
 
0.58
%
 
0.54
%
 
0.95
%
 
 
 
0.55
%
 
0.65
%
 
 
Final maturity date
 
9/25/41

 
6/25/21

 
3/25/30

 
7/27/37

 
 
 
6/25/41

 
11/27/34

 
11/25/43

 
 
 
7/25/41

 
11/25/47

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class B subordinated notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
$
13,500

 
 
 
 
 
 
 
12,000

 
19,100

 
 
 
 
 
9,500

 
16,000

 

 
70,100

Bond discount
 
(1,132
)
 
 
 
 
 
 
 
(1,046
)
 
(1,467
)
 
 
 
 
 
(1,138
)
 
(1,232
)
 

 
(6,015
)
Issue price
 
$
12,368

 
 
 
 
 
 
 
10,954

 
17,633

 

 
 
 
8,362

 
14,768

 

 
64,085

Cost of funds (1-month LIBOR plus:)
 
1.50
%
 
 
 
 
 
 
 
1.50
%
 
1.50
%
 
 
 
 
 
1.50
%
 
1.50
%
 

 
 
Final maturity date
 
10/25/47

 
 
 
 
 
 
 
6/25/41

 
10/25/50

 
 
 
 
 
9/25/51

 
5/25/49

 


 
 

(a)
Total original principal amount excludes the Class B subordinated notes of $8.3 million that were retained at issuance. As of September 30, 2014, the Company has a total of $64.6 million (par value) of its own Class B subordinated notes remaining from prior completed asset-backed securitizations that are not included in the Company's consolidated balance sheet. If the Company sells these notes to third parties, the Company would obtain cash proceeds equal to the market value of the notes on the date of such sale.  Upon sale, these notes would be shown as “bonds and notes payable” in the Company's consolidated balance sheet.  The Company believes the market value of such notes is currently less than par value.  Any excess of the par value over the market value on the date of sale would be recognized by the Company as interest expense over the life of the bonds.

Unsecured Line of Credit

On June 30, 2014, the Company's unsecured line of credit was amended to increase the line of credit from $275.0 million to $350.0 million and extend the maturity date from March 28, 2018 to June 30, 2019. In addition, the amendment revised certain covenants related to maintenance of a minimum consolidated net worth, limitations on recourse indebtedness and liens, and a limitation on the amount of non-federally insured student loans in the Company’s portfolio. As of September 30, 2014, the $350.0 million unsecured line of credit had no amount outstanding and $350.0 million was available for future use.

Other Borrowings

On October 31, 2014, the Company amended its existing $50.0 million line of credit, which is collateralized by asset-backed security investments, to increase the borrowing capacity to $75.0 million and extend the maturity date to October 31, 2016. The renewed line of credit has covenants and cross default provisions similar to those under the Company's unsecured line of credit.

Debt Repurchases

The Company repurchased $2.5 million (par value) and $15.4 million (par value) of its own asset-backed debt securities during the three months ended September 30, 2014 and 2013, respectively, and recognized no gain on such purchases for the three months ended September 30, 2014, and gains of $2.1 million for the same period in 2013. During the nine months ended September 30, 2014 and 2013, the Company repurchased $4.0 million (par value) and $84.7 million (par value), respectively, of its own asset-backed debt securities and recognized gains on such purchases of approximately $57,000 and $10.9 million, respectively.
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments

The Company uses derivative financial instruments primarily to manage interest rate risk and foreign currency exchange risk. 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 2013 Annual Report. A tabular presentation of such derivatives outstanding as of September 30, 2014 and December 31, 2013 is presented below.

Basis Swaps

The following table summarizes the Company’s basis swaps outstanding as of September 30, 2014 and December 31, 2013 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").
 
 
Maturity
 
Notional amount
 
 
2021
 
 
$
250,000

 
 
2022
 
 
1,900,000

 
 
2023
 
 
3,650,000

 
 
2024
 
 
250,000

 
 
2026
 
 
800,000

 
 
2028
 
 
100,000

 
 
2036
 
 
700,000

 
 
2039
(a)
 
150,000

 
 
2040
(b)
 
200,000

 
 
 
 
 
$
8,000,000

(c)
(a)This derivative has a forward effective start date in 2015.
(b)This derivative has a forward effective start date in 2020.
(c)
The weighted average rate paid by the Company on the 1:3 Basis Swaps as of September 30, 2014 and December 31, 2013 was one-month LIBOR plus 3.5 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 September 30, 2014
 
As of December 31, 2013
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
 
 
 
2014
 
$
—

 
—
%
 
$
1,750,000

 
0.71
%
2015
 
1,100,000

 
0.89

 
1,100,000

 
0.89

2016
 
750,000

 
0.85

 
750,000

 
0.85

2017
 
1,250,000

 
0.86

 
1,250,000

 
0.86

 
 
$
3,100,000

 
0.87
%
 
$
4,850,000

 
0.81
%

(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 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. The Company recorded this derivative instrument at fair value and will record the change in fair value of the instrument on the consolidated statement of income.

Interest Rate Swaps – Unsecured Debt Hedges

The Company had the following derivatives outstanding as of September 30, 2014 and December 31, 2013 that are used to effectively convert the variable interest rate on a portion of the Junior Subordinated Hybrid Securities ("Hybrid Securities") to a fixed rate.
 
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. As a result of the Euro Notes, the Company is exposed to market risk related to fluctuations in foreign currency exchange rates between the U.S. dollar and Euro. The principal and accrued interest on these notes are re-measured at each reporting period and recorded in the Company’s consolidated balance sheet in U.S. dollars based on the foreign currency exchange rate on that date.

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

The following table shows the income statement impact as a result of the re-measurement of the Euro Notes and the change in the fair value of the related derivative instrument.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013 (b)
 
2014
 
2013 (b)
Re-measurement of Euro Notes
$
37,418

 
(39,974
)
 
39,216

 
(25,902
)
Change in fair value of cross-currency interest rate swaps
(37,224
)
 
39,074

 
(40,261
)
 
18,978

Total impact to consolidated statements of income - income (expense) (a)
$
194

 
(900
)
 
(1,045
)
 
(6,924
)
(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.
(b)
The 2013 operating results include the re-measurement of an additional €420.5 million of student loan asset-backed Euro notes and the change in fair value of a related cross-currency interest rate swap entered into in connection with the issuance of such notes. In November 2013, the principal amount outstanding on the notes was changed to U.S. dollars and the cross-currency interest swap was terminated.
The re-measurement of the Euro-denominated bonds generally correlates with the change in fair value of the corresponding cross-currency interest rate swap. However, the Company will experience unrealized gains or losses related to the cross-currency interest rate swap if the two underlying indices (and related forward curve) do not move in parallel.

Consolidated Financial Statement Impact Related to Derivatives

The following table summarizes the fair value of the Company’s derivatives as reflected in the consolidated balance sheets:
 
Fair value of asset derivatives
 
Fair value of liability derivatives
 
As of
 
As of
 
As of
 
As of
 
September 30,
2014
 
December 31,
2013
 
September 30,
2014
 
December 31,
2013
1:3 basis swaps
$
50,965

 
18,490

 
—

 
—

Interest rate swaps - floor income hedges
8,804

 
7,183

 
6,297

 
15,849

Interest rate swap option - floor income hedge
8,240

 
—

 
—

 
—

Interest rate swaps - hybrid debt hedges
—

 
—

 
5,090

 
2,120

Cross-currency interest rate swap
—


36,834

 
3,427

 
—

Total
$
68,009

 
62,507

 
14,814

 
17,969



During the nine months ended September 30, 2013, the Company terminated certain derivatives for gross proceeds and payments of $2.7 million and $9.2 million, respectively. There were no derivative terminations during the first nine months of 2014.

Offsetting of Derivative Assets/Liabilities

The Company records derivative instruments in the consolidated balance sheets on a gross basis as either an asset or liability measured at its fair value. Certain of the Company's derivative instruments are subject to right of offset provisions with counterparties. The following tables include the gross amounts related to the Company's derivative portfolio recognized in the consolidated balance sheets, reconciled to the net amount when excluding derivatives subject to enforceable master netting arrangements and cash collateral received/pledged:

 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative assets
 
Gross amounts of recognized assets presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral received
 
Net asset (liability)
Balance as of September 30, 2014
 
$
68,009

 
(11,387
)
 
—

 
56,622

Balance as of December 31, 2013
 
62,507

 
(15,437
)
 
(15,959
)
 
31,111


 
 
 
 
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 (received)
 
Net asset (liability)
Balance as of September 30, 2014
 
$
(14,814
)
 
11,387

 
(22,422
)
 
(25,849
)
Balance as of December 31, 2013
 
(17,969
)
 
15,437

 
3,630

 
1,098



The following table summarizes the effect of derivative instruments in the consolidated statements of income.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013
 
2014
 
2013
Settlements:
 

 
 

 
 

 
 

1:3 basis swaps
$
808

 
781

 
2,547

 
2,474

Interest rate swaps - floor income hedges
(5,421
)
 
(7,178
)
 
(19,345
)
 
(24,017
)
Interest rate swaps - hybrid debt hedges
(259
)
 
(256
)
 
(767
)
 
(1,413
)
Cross-currency interest rate swaps
38

 
(35
)
 
288

 
(273
)
Total settlements - expense
(4,834
)
 
(6,688
)
 
(17,277
)
 
(23,229
)
Change in fair value:
 

 
 

 
 

 
 

1:3 basis swaps
19,455

 
(2,161
)
 
32,475

 
9,402

Interest rate swaps - floor income hedges
10,628

 
(9,599
)
 
11,173

 
33,231

Interest rate swap option - floor income hedge
(847
)
 
—

 
(847
)
 
—

Interest rate swaps - hybrid debt hedges
(393
)
 
2,700

 
(2,971
)
 
11,790

Cross-currency interest rate swaps
(37,224
)
 
39,074

 
(40,261
)
 
18,978

Other
—

 
—

 
—

 
342

Total change in fair value - income (expense)
(8,381
)
 
30,014

 
(431
)
 
73,743

Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
37,418

 
(39,974
)
 
39,216

 
(25,902
)
Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense)
$
24,203

 
(16,648
)
 
21,508

 
24,612

Investments
Investments
Investments

A summary of the Company's investments and restricted investments follows:
 
As of September 30, 2014
 
As of December 31, 2013
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses (a)
 
Fair value
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
 
 
 
 
 
 
 
 
Investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities (b)
$
123,898

 
6,309

 
(153
)
 
130,054

 
171,931

 
7,111

 
(1,241
)
 
177,801

Equity securities
1,478

 
1,959

 
(21
)
 
3,416

 
1,502

 
1,783

 
(3
)
 
3,282

Total available-for-sale investments
$
125,376

 
8,268

 
(174
)
 
133,470

 
173,433

 
8,894

 
(1,244
)
 
181,083

Trading investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed securities
 
 
 
 
 
 
5,370

 
 
 
 
 
 
 
10,957

Equity securities
 
 
 
 
 
 
8,940

 
 
 
 
 
 
 
—

Total trading investments
 
 
 
 
 
 
14,310

 
 
 
 
 
 
 
10,957

Total available-for-sale and trading investments

 

 

 
$
147,780

 
 
 
 
 


 
192,040

Restricted Investments (c):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guaranteed investment contracts - held-to-maturity
 
 
 
 
 
 
$
8,205

 
 
 
 
 
 
 
7,285


    
(a)
As of September 30, 2014, the Company considered the decline in market value of its available-for-sale investments to be temporary in nature and did not consider any of its investments other-than-temporarily impaired.

(b)
As of September 30, 2014, the stated maturities of the majority of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years.

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

The amounts reclassified from accumulated other comprehensive income related to the realized gains and losses on available-for-sale-securities is summarized below.
 
 
Three months ended September 30,
 
Nine months ended September 30,
Affected line item in the consolidated statements of income - income (expense):
 
2014
 
2013
 
2014
 
2013
Other income
 
$
8

 
730

 
8,319

 
2,246

Income tax expense
 
(3
)
 
(270
)
 
(3,078
)
 
(831
)
Net
 
$
5

 
460

 
5,241

 
1,415

Business Combination (Notes)
Business Combination Disclosure [Text Block]
Business Combination

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.

Wilcomp Software, L.P. (d.b.a. RenWeb School Management Software) (“RenWeb”)

On June 3, 2014, the Company purchased 100 percent of the ownership interests of RenWeb. RenWeb provides school information systems for private and faith-based schools that help schools automate administrative processes such as admissions, scheduling, student billing, attendance, and grade book management. The combination of RenWeb’s school administration software and the Company’s tuition management and financial needs assessment services are expected to significantly increase the value of the Company’s offerings in this area, allowing the Company to deliver a comprehensive suite of solutions to schools.

The initial consideration paid by the Company for RenWeb was $44.0 million. In addition to the initial purchase price, additional payments are to be paid by the Company to the former owners of RenWeb based on certain operating results and other performance measures of RenWeb as defined in the purchase agreement. The contingent payments, if any, are payable when earned and the potential undiscounted amount of all future payments that the Company could be required to make under the contingent consideration arrangement is between $0 and $4.0 million. Such payments, if any, will be paid no later than January 2017. As of the acquisition date, the Company accrued $2.3 million as additional consideration, which represented the estimated fair value of the contingent consideration arrangement. From the acquisition date through September 30, 2014, there has been no change in the estimated fair value of the contingent consideration.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date.
Cash and cash equivalents
 
$
326

Accounts receivable
 
961

Property and equipment
 
105

Other assets
 
22

Intangible assets
 
37,188

Excess cost over fair value of net assets acquired (goodwill)
 
9,082

Other liabilities
 
(1,341
)
Net assets acquired
 
$
46,343



The $37.2 million of acquired intangible assets on the date of acquisition had a weighted-average useful life of approximately 18 years. The intangible assets that made up this amount included customer relationships of $25.5 million (20-year useful life), trade name of $6.4 million (20-year useful life), computer software of $4.9 million (5-year useful life), and non-competition agreements of $0.4 million (10-year useful life).
The $9.1 million of goodwill was assigned to the Tuition Payment Processing and Campus Commerce operating segment and is expected to be deductible for tax purposes. The amount allocated to goodwill was primarily attributable to anticipated synergies as discussed previously.

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 Disclosure [Text Block]
Intangible Assets

Intangible assets consist of the following:

 
Weighted average remaining useful life as of September 30, 2014 (months)
 
As of September 30, 2014
 
As of December 31, 2013
 
 
 
Amortizable intangible assets:
 
 
 
Customer relationships (net of accumulated amortization of $22,866 and $19,821, respectively)
207
 
$
28,612

 
6,132

Computer software (net of accumulated amortization of $1,210 and $0, respectively)
44
 
7,656

 
—

Trade names (net of accumulated amortization of $156 and $0, respectively)
236
 
6,266

 
—

Covenants not to compete (net of accumulated amortization of $12 and $0, respectively)
116
 
342

 
—

Total - amortizable intangible assets
181
 
$
42,876

 
6,132



The Company recorded amortization expense on its intangible assets of $2.0 million and $0.8 million during the three months ended September 30, 2014 and 2013, respectively, and $4.4 million and $2.5 million during the nine months ended September 30, 2014 and 2013, respectively. The Company will continue to amortize intangible assets over their remaining useful lives. As of September 30, 2014 the Company estimates it will record amortization expense as follows:

2014 (Q4)
$
1,984

2015
8,695

2016
5,349

2017
3,862

2018
3,533

2019 and thereafter
19,453

 
$
42,876

Goodwill Goodwill
Goodwill Disclosure [Text Block]
Goodwill

The change in the carrying amount of goodwill by operating segment was as follows:

 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment Services
 
Asset Generation and Management
 
Total
Balance as of December 31, 2013
$
8,596

 
58,086

 
8,553

 
41,883

 
117,118

Goodwill acquired during the period
—

 
9,082

 
—

 
—

 
9,082

Balance as of September 30, 2014
$
8,596

 
67,168

 
8,553

 
41,883

 
126,200

Earnings per Common Share
Earnings Per Common Share
Earnings per Common Share

Presented below is a summary of the components used to calculate basic and diluted earnings per share. The Company applies the two-class method in computing both basic and diluted earnings per share, which requires the calculation of separate earnings per share amounts for common stock and unvested share based awards. Unvested share-based awards that contain nonforfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock.
 
Three months ended September 30,
 
2014
 
2013
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
84,330

 
889

 
85,219

 
62,277

 
553

 
62,830

 
 
 
 
 


 
 
 
 
 
 
Denominator:


 


 


 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
45,948,255

 
484,425

 
46,432,680

 
46,086,743

 
409,869

 
46,496,612

Earnings per share - basic and diluted
$
1.84

 
1.84

 
1.84

 
1.35

 
1.35

 
1.35

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30,
 
2014
 
2013
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
231,725

 
2,274

 
233,999

 
230,141

 
2,011

 
232,152

 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
46,044,429

 
451,880

 
46,496,309

 
46,189,200

 
404,041

 
46,593,241

Earnings per share - basic and diluted
$
5.03

 
5.03

 
5.03

 
4.98

 
4.98

 
4.98



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.
Segment Reporting
Segment Reporting
Segment Reporting

See note 1 of the notes to consolidated financial statements included in the 2013 Annual Report for a description of the Company's operating segments. The following tables include the results of each of the Company's operating segments reconciled to the consolidated financial statements.
 
Three months ended September 30, 2014
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
5

 
2

 
—

 
7

 
187,949

 
1,814

 
(346
)
 
189,424

Interest expense
—

 
—

 
—

 
—

 
71,037

 
1,246

 
(346
)
 
71,937

Net interest income
5

 
2

 
—

 
7

 
116,912

 
568

 
—

 
117,487

Less provision for loan losses
—

 
—

 
—

 
—

 
2,000

 
—

 
—

 
2,000

Net interest income after provision for loan losses
5

 
2

 
—

 
7

 
114,912

 
568

 
—

 
115,487

Other income:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
52,659

 
—

 
—

 
52,659

 
—

 
—

 
—

 
52,659

Intersegment servicing revenue
13,432

 
—

 
—

 
13,432

 
—

 
—

 
(13,432
)
 
—

Tuition payment processing and campus commerce revenue
—

 
26,399

 
—

 
26,399

 
—

 
—

 
—

 
26,399

Enrollment services revenue
—

 
—

 
22,936

 
22,936

 
—

 
—

 
—

 
22,936

Other income
—

 
—

 
—

 
—

 
4,294

 
3,356

 
—

 
7,650

Gain on sale of loans and debt repurchases
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Derivative market value and foreign currency adjustments, net
—

 
—

 
—

 
—

 
29,430

 
(393
)
 
—

 
29,037

Derivative settlements, net
—

 
—

 
—

 
—

 
(4,575
)
 
(259
)
 
—

 
(4,834
)
Total other income
66,091

 
26,399

 
22,936

 
115,426

 
29,149

 
2,704

 
(13,432
)
 
133,847

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
37,062

 
13,288

 
4,474

 
54,824

 
565

 
5,709

 
—

 
61,098

Cost to provide enrollment services
—

 
—

 
14,178

 
14,178

 
—

 
—

 
—

 
14,178

Depreciation and amortization
2,558

 
2,396

 
41

 
4,995

 
—

 
498

 
—

 
5,493

Other
15,028

 
3,312

 
1,624

 
19,964

 
8,636

 
8,076

 
—

 
36,676

Intersegment expenses, net
906

 
1,481

 
761

 
3,148

 
13,611

 
(3,327
)
 
(13,432
)
 
—

Total operating expenses
55,554

 
20,477

 
21,078

 
97,109

 
22,812

 
10,956

 
(13,432
)
 
117,445

Income (loss) before income taxes and corporate overhead allocation
10,542

 
5,924

 
1,858

 
18,324

 
121,249

 
(7,684
)
 
—

 
131,889

Corporate overhead allocation
(2,567
)
 
(856
)
 
(855
)
 
(4,278
)
 
(1,026
)
 
5,304

 
—

 
—

Income (loss) before income taxes
7,975

 
5,068

 
1,003

 
14,046

 
120,223

 
(2,380
)
 
—

 
131,889

Income tax (expense) benefit
(3,030
)
 
(1,926
)
 
(381
)
 
(5,337
)
 
(45,684
)
 
4,508

 
—

 
(46,513
)
Net income
4,945

 
3,142

 
622

 
8,709

 
74,539

 
2,128

 
—

 
85,376

  Net income attributable to noncontrolling interest
—

 
—

 
—

 
—

 
—

 
157

 
—

 
157

Net income attributable to Nelnet, Inc.
$
4,945

 
3,142

 
622

 
8,709

 
74,539

 
1,971

 
—

 
85,219

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended September 30, 2013
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
10

 
—

 
—

 
10

 
158,793

 
2,201

 
(767
)
 
160,237

Interest expense
—

 
—

 
—

 
—

 
56,100

 
(18
)
 
(767
)
 
55,315

Net interest income
10

 
—

 
—

 
10

 
102,693

 
2,219

 
—

 
104,922

Less provision for loan losses
—

 
—

 
—

 
—

 
5,000

 
—

 
—

 
5,000

Net interest income after provision for loan losses
10

 
—

 
—

 
10

 
97,693

 
2,219

 
—

 
99,922

Other income:
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
64,582

 
—

 
—

 
64,582

 
—

 
—

 
—

 
64,582

Intersegment servicing revenue
13,519

 
—

 
—

 
13,519

 
—

 
—

 
(13,519
)
 
—

Tuition payment processing and campus commerce revenue
—

 
19,927

 
—

 
19,927

 
—

 
—

 
—

 
19,927

Enrollment services revenue
—

 
—

 
22,563

 
22,563

 
—

 
—

 
—

 
22,563

Other income
—

 
—

 
—

 
—

 
3,981

 
4,632

 
—

 
8,613

Gain on sale of loans and debt repurchases
—

 
—

 
—

 
—

 
2,138

 
—

 
—

 
2,138

Derivative market value and foreign currency adjustments, net
—

 
—

 
—

 
—

 
(12,660
)
 
2,700

 
—

 
(9,960
)
Derivative settlements, net
—

 
—

 
—

 
—

 
(6,432
)
 
(256
)
 
—

 
(6,688
)
Total other income
78,101

 
19,927

 
22,563

 
120,591

 
(12,973
)
 
7,076

 
(13,519
)
 
101,175

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
29,719

 
9,229

 
4,491

 
43,439

 
555

 
4,718

 
—

 
48,712

Cost to provide enrollment services
—

 
—

 
14,668

 
14,668

 
—

 
—

 
—

 
14,668

Depreciation and amortization
2,677

 
1,117

 
57

 
3,851

 
—

 
489

 
—

 
4,340

Other
19,752

 
1,908

 
1,556

 
23,216

 
7,939

 
8,732

 
—

 
39,887

Intersegment expenses, net
1,457

 
1,431

 
1,139

 
4,027

 
13,705

 
(4,213
)
 
(13,519
)
 
—

Total operating expenses
53,605

 
13,685

 
21,911

 
89,201

 
22,199

 
9,726

 
(13,519
)
 
107,607

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

 
6,242

 
652

 
31,400

 
62,521

 
(431
)
 
—

 
93,490

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

 
—

 
—

Income before income taxes
22,684

 
5,635

 
45

 
28,364

 
61,219

 
3,907

 
—

 
93,490

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

 
—

 
(30,444
)
Net income
14,064

 
3,494

 
28

 
17,586

 
37,956

 
7,504

 
—

 
63,046

  Net income attributable to noncontrolling interest
—

 
—

 
—

 
—

 
—

 
216

 
—

 
216

Net income attributable to Nelnet, Inc.
$
14,064

 
3,494

 
28

 
17,586

 
37,956

 
7,288

 
—

 
62,830

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2014
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
25

 
5

 
—

 
30

 
520,514

 
6,508

 
(1,805
)
 
525,247

Interest expense
—

 
—

 
—

 
—

 
198,449

 
4,532

 
(1,805
)
 
201,176

Net interest income
25

 
5

 
—

 
30

 
322,065

 
1,976

 
—

 
324,071

Less provision for loan losses
—

 
—

 
—

 
—

 
6,000

 
—

 
—

 
6,000

Net interest income after provision for loan losses
25

 
5

 
—

 
30

 
316,065

 
1,976

 
—

 
318,071

Other income:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
183,876

 
—

 
—

 
183,876

 
—

 
—

 
—

 
183,876

Intersegment servicing revenue
41,453

 
—

 
—

 
41,453

 
—

 
—

 
(41,453
)
 
—

Tuition payment processing and campus commerce revenue
—

 
73,468

 
—

 
73,468

 
—

 
—

 
—

 
73,468

Enrollment services revenue
—

 
—

 
65,092

 
65,092

 
—

 
—

 
—

 
65,092

Other income
—

 
—

 
—

 
—

 
12,954

 
28,142

 
—

 
41,096

Gain on sale of loans and debt repurchases
—

 
—

 
—

 
—

 
57

 
—

 
—

 
57

Derivative market value and foreign currency adjustments, net
—

 
—

 
—

 
—

 
41,755

 
(2,970
)
 
—

 
38,785

Derivative settlements, net
—

 
—

 
—

 
—

 
(16,510
)
 
(767
)
 
—

 
(17,277
)
Total other income
225,329

 
73,468

 
65,092

 
363,889

 
38,256

 
24,405

 
(41,453
)
 
385,097

Operating expenses:
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 

Salaries and benefits
102,462

 
34,427

 
12,986

 
149,875

 
1,744

 
15,851

 
—

 
167,470

Cost to provide enrollment services
—

 
—

 
41,964

 
41,964

 
—

 
—

 
—

 
41,964

Depreciation and amortization
8,166

 
5,669

 
129

 
13,964

 
—

 
1,526

 
—

 
15,490

Other
53,295

 
8,915

 
4,917

 
67,127

 
24,627

 
20,926

 
—

 
112,680

Intersegment expenses, net
3,113

 
4,305

 
2,711

 
10,129

 
41,950

 
(10,626
)
 
(41,453
)
 
—

Total operating expenses
167,036

 
53,316

 
62,707

 
283,059

 
68,321

 
27,677

 
(41,453
)
 
337,604

Income (loss) before income taxes and corporate overhead allocation
58,318

 
20,157

 
2,385

 
80,860

 
286,000

 
(1,296
)
 
—

 
365,564

Corporate overhead allocation
(6,487
)
 
(2,163
)
 
(2,162
)
 
(10,812
)
 
(3,604
)
 
14,416

 
—

 
—

Income before income taxes
51,831

 
17,994

 
223

 
70,048

 
282,396

 
13,120

 
—

 
365,564

Income tax (expense) benefit
(19,695
)
 
(6,837
)
 
(85
)
 
(26,617
)
 
(107,309
)
 
3,724

 
—

 
(130,202
)
Net income
32,136

 
11,157

 
138

 
43,431

 
175,087

 
16,844

 
—

 
235,362

  Net income attributable to noncontrolling interest
—

 
—

 
—

 
—

 
—

 
1,363

 
—

 
1,363

Net income attributable to Nelnet, Inc.
$
32,136

 
11,157

 
138

 
43,431

 
175,087

 
15,481

 
—

 
233,999

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

 
—

 
—

 
29

 
472,622

 
6,708

 
(2,420
)
 
476,939

Interest expense
—

 
—

 
—

 
—

 
170,502

 
3,718

 
(2,420
)
 
171,800

Net interest income
29

 
—

 
—

 
29

 
302,120

 
2,990

 
—

 
305,139

Less provision for loan losses
—

 
—

 
—

 
—

 
15,000

 
—

 
—

 
15,000

Net interest income after provision for loan losses
29

 
—

 
—

 
29

 
287,120

 
2,990

 
—

 
290,139

Other income:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
180,261

 
—

 
—

 
180,261

 
—

 
—

 
—

 
180,261

Intersegment servicing revenue
42,375

 
—

 
—

 
42,375

 
—

 
—

 
(42,375
)
 
—

Tuition payment processing and campus commerce revenue
—

 
61,694

 
—

 
61,694

 
—

 
—

 
—

 
61,694

Enrollment services revenue
—

 
—

 
76,343

 
76,343

 
—

 
—

 
—

 
76,343

Other income
—

 
—

 
—

 
—

 
11,207

 
19,110

 
—

 
30,317

Gain on sale of loans and debt repurchases
—

 
—

 
—

 
—

 
10,900

 
—

 
—

 
10,900

Derivative market value and foreign currency adjustments, net
—

 
—

 
—

 
—

 
35,711

 
12,130

 
—

 
47,841

Derivative settlements, net
—

 
—

 
—

 
—

 
(21,816
)
 
(1,413
)
 
—

 
(23,229
)
Total other income
222,636

 
61,694

 
76,343

 
360,673

 
36,002

 
29,827

 
(42,375
)
 
384,127

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
86,254

 
28,015

 
15,067

 
129,336

 
1,709

 
13,004

 
—

 
144,049

Cost to provide enrollment services
—

 
—

 
51,097

 
51,097

 
—

 
—

 
—

 
51,097

Depreciation and amortization
8,197

 
3,387

 
179

 
11,763

 
—

 
1,274

 
—

 
13,037

Other
56,173

 
6,387

 
4,450

 
67,010

 
23,375

 
18,808

 
—

 
109,193

Intersegment expenses, net
3,243

 
4,350

 
3,418

 
11,011

 
42,955

 
(11,591
)
 
(42,375
)
 
—

Total operating expenses
153,867

 
42,139

 
74,211

 
270,217

 
68,039

 
21,495

 
(42,375
)
 
317,376

Income before income taxes and corporate overhead allocation
68,798

 
19,555

 
2,132

 
90,485

 
255,083

 
11,322

 
—

 
356,890

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

 
—

 
—

Income before income taxes
64,466

 
18,112

 
689

 
83,267

 
251,988

 
21,635

 
—

 
356,890

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

 
—

 
(123,637
)
Net income
39,968

 
11,230

 
428

 
51,626

 
156,233

 
25,394

 
—

 
233,253

  Net income attributable to noncontrolling interest
—

 
—

 
—

 
—

 
—

 
1,101

 
—

 
1,101

Net income attributable to Nelnet, Inc.
$
39,968

 
11,230

 
428

 
51,626

 
156,233

 
24,293

 
—

 
232,152

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Major Customer
Concentration Risk Disclosure [Text Block]
Major Customer
The Company is one of four private sector companies awarded a student loan servicing contract by the Department of Education (the "Department") in June 2009 to provide additional servicing capacity for loans owned by the Department, with new loan volume currently being allocated among the four servicers based on certain performance metrics established by the Department. The servicing contract was originally scheduled to expire in June 2014. Effective as of June 17, 2014, the Department extended the servicing contract for an additional five years through June 16, 2019. Revenue earned by the Company's Student Loan and Guaranty Servicing operating segment related to this contract was $31.2 million and $26.0 million for the three months ended September 30, 2014 and 2013, respectively, and $92.1 million and $68.4 million for the nine months ended September 30, 2014 and 2013, respectively.
Related Party Transactions
Related Party Transactions
Related Party Transactions
The Company has entered into certain contractual arrangements with related parties as described in note 19 of the notes to consolidated financial statements included in the 2013 Annual Report.  The following provides an update for a related party transaction that occurred during the first nine months of 2014.
On January 1, 2014, the Company subparticipated the Company's participation interest in a loan receivable from an unrelated third party to Union Bank and Trust Company ("Union Bank"), an entity under common control with the Company. As of September 30, 2014, the participated portion of the loan was $2.2 million, with an obligation to fund an additional $0.9 million. As part of this agreement, Union Bank will pay the Company monthly servicing fees equal to 40 basis points on the participated portion of the outstanding principal balance of the loan.
Fair Value
Fair Value
Fair Value

The following tables present the Company’s financial assets and liabilities that are measured at fair value on a recurring basis. There were no transfers into or out of level 1, level 2, or level 3 for the nine months ended September 30, 2014.
 
As of September 30, 2014
 
As of December 31, 2013
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
Investments:
 
 
 
 


 
 
 
 
 
 
Student loan asset-backed securities
$
—

 
143,955

 
143,955

 
—

 
188,279

 
188,279

Equity securities
3,416

 
—

 
3,416

 
3,282

 
—

 
3,282

Debt securities
409

 
—

 
409

 
479

 
—

 
479

Total investments
3,825

 
143,955

 
147,780

 
3,761

 
188,279

 
192,040

Fair value of derivative instruments
—

 
68,009

 
68,009

 
—

 
62,507

 
62,507

Total assets
$
3,825

 
211,964

 
215,789

 
3,761

 
250,786

 
254,547

Liabilities:
 

 
 

 
 

 
 
 
 
 
 
Fair value of derivative instruments
$
—

 
14,814

 
14,814

 
—

 
17,969

 
17,969

Total liabilities
$
—

 
14,814

 
14,814

 
—

 
17,969

 
17,969


The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:
 
As of September 30, 2014
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
29,975,188

 
28,701,344

 
—

 
—

 
29,975,188

Cash and cash equivalents
74,579

 
74,579

 
74,579

 
—

 
—

Investments
147,780

 
147,780

 
3,825

 
143,955

 
—

Restricted cash
859,302

 
859,302

 
859,302

 
—

 
—

Restricted cash – due to customers
72,836

 
72,836

 
72,836

 
—

 
—

Restricted investments
8,205

 
8,205

 
8,205

 
—

 
—

Accrued interest receivable
352,205

 
352,205

 
—

 
352,205

 
—

Derivative instruments
68,009

 
68,009

 
—

 
68,009

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
28,738,353

 
28,737,456

 
—

 
28,738,353

 
—

Accrued interest payable
25,221

 
25,221

 
—

 
25,221

 
—

Due to customers
72,836

 
72,836

 
72,836

 
—

 
—

Derivative instruments
14,814

 
14,814

 
—

 
14,814

 
—

 
As of December 31, 2013
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
26,641,383

 
25,907,589

 
—

 
—

 
26,641,383

Cash and cash equivalents
63,267

 
63,267

 
63,267

 
—

 
—

Investments
192,040

 
192,040

 
3,761

 
188,279

 
—

Restricted cash
727,838

 
727,838

 
727,838

 
—

 
—

Restricted cash – due to customers
167,576

 
167,576

 
167,576

 
—

 
—

Restricted investments
7,285

 
7,285

 
7,285

 
—

 
—

Accrued interest receivable
314,553

 
314,553

 
—

 
314,553

 
—

Derivative instruments
62,507

 
62,507

 
—

 
62,507

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
25,577,250

 
25,955,289

 
—

 
25,577,250

 
—

Accrued interest payable
21,725

 
21,725

 
—

 
21,725

 
—

Due to customers
167,576

 
167,576

 
167,576

 
—

 
—

Derivative instruments
17,969

 
17,969

 
—

 
17,969

 
—


 
The methodologies for estimating the fair value of financial assets and liabilities are described in note 20 of the notes to consolidated financial statements included in the 2013 Annual Report.
Legal Proceedings
Legal Proceedings
Legal Proceedings

General

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

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

Actions Requesting Certifications of Classes

Proceedings or complaints that involve or ask for certifications of classes generally expand the scope of legal defense costs, as well as alleged potential claim amounts. The Company is currently subject to legal proceedings in which the plaintiffs have made allegations that one or more putative classes should be certified by the applicable court. With respect to the three proceedings specifically discussed below, it is significant to note that, no putative class has actually been certified in any of these proceedings, the Company's position is that class certification would be inappropriate in each such proceeding, the Company has entered into agreements in principle to resolve two of the pending matters for immaterial amounts through a court-approved class-wide settlement, and the Company has been granted a motion for a summary judgment dismissing the case and intends to vigorously contest the appeal and class certification in the remaining matter. The Company has accrued an immaterial amount related to the legal proceedings described below. However, due to the uncertainty and risks inherent in class determination and the overall litigation process, the Company believes that a meaningful estimate of its exposure to any reasonably possible losses or range of reasonably possible losses, in excess of the amount accrued, cannot currently be made.

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

On January 4, 2011, a complaint against Peterson's Nelnet, LLC (“Peterson's”), a subsidiary of Nelnet, Inc. ("Nelnet"), was filed in the U.S. Federal District Court for the District of New Jersey (the “New Jersey District Court”). The complaint alleges that Peterson's sent six advertising faxes to the named plaintiff in 2008-2009 that were not the result of express invitation or permission granted by the plaintiff and did not include certain opt out language. The complaint also alleges that such faxes violated the Federal Telephone Consumer Protection Act (the “TCPA”), purportedly entitling the plaintiff to $500 per violation, trebled for willful violations for each of the six faxes. The complaint further alleges that Peterson's had sent putative class members more than 10,000 faxes that violated the TCPA, amounting to more than $5 million in statutory penalty damages and more than $15 million if trebled for willful violations. The complaint seeks to establish a class action. On September 13, 2013, the named plaintiff filed a motion for class certification, and on October 7, 2013, Peterson's filed a motion to dismiss the named plaintiff's motion for class certification. As of the filing date of this report, the New Jersey District Court has not established, recognized, or certified a class. On January 23, 2014, Peterson's and the named plaintiff reached an agreement in principle whereby Peterson's would, without admitting any wrongdoing or liability, settle all claims in the lawsuit, including potential class action claims, for payment of an immaterial amount. The settlement agreement in principle is subject to finalization and court approval.

Than Zaw v. Nelnet, Inc.

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

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

On August 6, 2012, an Amended Complaint was served on Peterson's, CUnet, LLC (“CUnet”), a subsidiary of Nelnet, and on Nelnet (collectively, the "Keating Defendants"), in connection with a lawsuit by Grant Keating in the U.S. Federal District Court for the Northern District of Ohio (the “Ohio District Court”). The lawsuit was originally instituted on August 24, 2011, and alleges that the Keating Defendants sent an advertising text message to the named plaintiff in June 2011 using an automatic telephone dialing system, and without the plaintiff's express consent. The complaint also alleges that this text message violated the TCPA, purportedly entitling the plaintiff to $500, trebled for a willful violation. The complaint further alleges that the Keating Defendants sent putative class members similar text messages using an automatic telephone dialing system, without such purported class members' consent. The complaint seeks to establish a class action. On August 29, 2013, the Keating Defendants filed motions for summary judgment, and the named plaintiff filed a motion for class certification. On May 12, 2014, the Ohio District Court granted the Keating Defendants' motion for summary judgment, dismissing the case. On September 8, 2014, the named plaintiff filed an appeal brief with the Circuit Court of Appeals and on October 22, 2014, two Keating Defendants filed a responsive brief. As of the filing date of this report, the Ohio District Court has not established, recognized, or certified a class. The Keating Defendants intend to continue to defend themselves vigorously in this lawsuit.
Basis of Financial Reporting Significant Accounting Policies (Policies)
Basis of Financial Reporting
Basis of Financial Reporting

The accompanying unaudited consolidated financial statements of Nelnet, Inc. and subsidiaries (the “Company”) as of September 30, 2014 and for the three and nine months ended September 30, 2014 and 2013 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2013 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2014 are not necessarily indicative of the results for the year ending December 31, 2014. 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, 2013 (the "2013 Annual Report").
Business Combination Business Combination Policy (Policies)
Business Combinations Policy [Policy Text Block]
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.
Student Loans Receivable and Allowance for Loan Losses (Tables)
Schedule of Accounts, Notes, Loans and Financing Receivable 
Student loans receivable consisted of the following:
 
As of
 
As of
 
September 30, 2014
 
December 31, 2013
Federally insured loans
 
 
 
Stafford and other
$
6,218,910

 
6,686,626

Consolidation
22,632,689

 
19,363,577

Total
28,851,599

 
26,050,203

Non-federally insured loans
77,623

 
71,103

 
28,929,222

 
26,121,306

Loan discount, net of unamortized loan premiums and deferred origination costs (a)
(175,910
)
 
(158,595
)
Allowance for loan losses – federally insured loans
(39,470
)
 
(43,440
)
Allowance for loan losses – non-federally insured loans
(12,498
)
 
(11,682
)
 
$
28,701,344

 
25,907,589



(a)
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. As of September 30, 2014 and December 31, 2013, "loan discount, net of unamortized loan premiums and deferred origination costs" included $28.8 million and $20.2 million, respectively, of non-accretable discount associated with purchased loans of $8.4 billion and $4.4 billion, respectively.

Allowance for Credit Losses on Financing Receivables 
Activity in the Allowance for Loan Losses

The provision for loan losses represents the periodic expense of maintaining an allowance appropriate to absorb losses, net of recoveries, inherent in the portfolio of student loans. Activity in the allowance for loan losses is shown below.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013
 
2014
 
2013
Balance at beginning of period
$
52,467

 
51,611

 
55,122

 
51,902

Provision for loan losses:
 
 
 
 
 

 
 

Federally insured loans
2,000

 
5,000

 
7,000

 
16,000

Non-federally insured loans
—

 
—

 
(1,000
)
 
(1,000
)
Total provision for loan losses
2,000

 
5,000

 
6,000

 
15,000

Charge-offs:
 

 
 

 
 

 
 

Federally insured loans
(3,521
)
 
(3,142
)
 
(11,290
)
 
(12,472
)
Non-federally insured loans
(623
)
 
(906
)
 
(1,642
)
 
(2,270
)
Total charge-offs
(4,144
)
 
(4,048
)
 
(12,932
)
 
(14,742
)
Recoveries - non-federally insured loans
279

 
363

 
989

 
1,173

Purchase (sale) of federally insured loans, net
70

 
700

 
320

 
(1,243
)
Transfer from repurchase obligation related to non-federally insured loans repurchased, net
1,296

 
571

 
2,469

 
2,107

Balance at end of period
$
51,968

 
54,197

 
51,968

 
54,197

 
 
 
 
 
 
 
 
Allocation of the allowance for loan losses:
 
 
 

 
 

 
 

Federally insured loans
$
39,470

 
42,406

 
39,470

 
42,406

Non-federally insured loans
12,498

 
11,791

 
12,498

 
11,791

Total allowance for loan losses
$
51,968

 
54,197

 
51,968

 
54,197


Accrual Related to Repurchase Obligation Rollforward 
Repurchase Obligations

As of September 30, 2014, the Company had participated a cumulative amount of $103.6 million (par value) of non-federally insured loans to third parties. Loans participated under these agreements have been accounted for by the Company as loan sales. Accordingly, the participation interests sold are not included in the Company’s consolidated balance sheets. Per the terms of the servicing agreements, the Company’s servicing operations are obligated to repurchase loans subject to the participation interests in the event such loans become 60 days or 90 days delinquent.

In addition, in 2011, the Company sold a portfolio of non-federally insured loans for proceeds of $91.3 million (100% of par value).  The Company retained credit risk related to this portfolio and will pay cash to purchase back any loans which become 60 days delinquent. As of September 30, 2014, the balance of this portfolio was $57.0 million (par value).

The Company’s estimate related to its obligation to repurchase these loans is included in “other liabilities” in the Company’s consolidated balance sheets. The activity related to this accrual is detailed below.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013
 
2014
 
2013
Beginning balance
$
14,827

 
14,594

 
16,143

 
16,130

Loans repurchased
(1,296
)
 
(571
)
 
(2,612
)
 
(2,107
)
Ending balance
$
13,531

 
14,023

 
13,531

 
14,023


Financing Receivable Credit Quality Indicators 
Student Loan Status and Delinquencies

Delinquencies have the potential to adversely impact the Company’s earnings through increased servicing and collection costs and account charge-offs.  The percent of non-federally insured loans that were delinquent 31 days or greater as of September 30, 2014, December 31, 2013, and September 30, 2013 was 11.7 percent, 12.7 percent, and 13.4 percent, respectively. The table below shows the Company’s federally insured student loan delinquency amounts.

 
As of September 30, 2014
 
As of December 31, 2013
 
As of September 30, 2013
Federally insured loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
3,072,318

 
 
 
$
2,872,505

 
 
 
$
3,039,819

 
 
Loans in forbearance
3,505,103

 
 
 
3,370,025

 
 
 
3,396,748

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
18,672,178

 
83.8
%
 
16,337,922

 
82.5
%
 
15,236,060

 
83.1
%
Loans delinquent 31-60 days
990,696

 
4.5

 
967,318

 
4.9

 
851,397

 
4.6

Loans delinquent 61-90 days
569,879

 
2.6

 
550,333

 
2.8

 
480,285

 
2.6

Loans delinquent 91-120 days
452,463

 
2.0

 
390,791

 
2.0

 
372,697

 
2.0

Loans delinquent 121-270 days
1,183,616

 
5.3

 
1,117,936

 
5.6

 
978,234

 
5.3

Loans delinquent 271 days or greater
405,346

 
1.8

 
443,373

 
2.2

 
437,337

 
2.4

Total loans in repayment
22,274,178

 
100.0
%
 
19,807,673

 
100.0
%
 
18,356,010

 
100.0
%
Total federally insured loans
$
28,851,599

 
 

 
$
26,050,203

 
 

 
$
24,792,577

 
 


Bonds and Notes payable (Tables)
Schedule of Debt 
The following tables summarize the Company’s outstanding debt obligations by type of instrument:
 
As of September 30, 2014
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
26,639,879

 
0.24% - 6.90%
 
5/25/18 - 8/26/52
Bonds and notes based on auction or remarketing
1,557,875

 
0.07% - 2.11%
 
5/1/28 - 11/26/46
Total variable-rate bonds and notes
28,197,754

 
 
 
 
FFELP warehouse facilities
787,042

 
0.16% - 0.25%
 
1/17/16 - 6/11/17
Unsecured line of credit
—

 
—
 
6/30/19
Unsecured debt - Junior Subordinated Hybrid Securities
96,457

 
3.61%
 
9/15/61
Other borrowings
63,504

 
1.66% - 5.10%
 
11/14/14 - 12/31/18
 
29,144,757

 
 
 
 
Discount on bonds and notes payable
(407,301
)
 
 
 
 
Total
$
28,737,456

 
 
 
 
 
As of December 31, 2013
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
23,479,893

 
0.25% - 6.90%
 
5/25/18 - 8/26/52
Bonds and notes based on auction or remarketing
1,134,250

 
0.07% - 2.17%
 
5/1/28 - 11/26/46
Total variable-rate bonds and notes
24,614,143

 
 
 
 
FFELP warehouse facilities
1,396,344

 
0.17% - 0.25%
 
1/17/16 - 6/12/16
Unsecured line of credit
45,000

 
1.67%
 
3/28/18
Unsecured debt - Junior Subordinated Hybrid Securities
96,457

 
3.62%
 
9/15/61
Other borrowings
61,401

 
1.67% - 5.10%
 
4/11/14 - 11/11/15
 
26,213,345

 
 
 
 
Discount on bonds and notes payable
(258,056
)
 
 
 
 
Total
$
25,955,289

 
 
 
 
Schedule of Line of Credit Facilities 
FFELP Warehouse Facilities

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

As of September 30, 2014, the Company had three FFELP warehouse facilities as summarized below.
 
 
NHELP-III
 
NHELP-II (a)
 
NFSLW-I (b)
 
Total
Maximum financing amount
 
$
750,000

 
500,000

 
500,000

 
1,750,000

Amount outstanding
 
438,265

 
40,433

 
308,344

 
787,042

Amount available
 
$
311,735

 
459,567

 
191,656

 
962,958

Expiration of liquidity provisions
 
February 5, 2015

 
December 17, 2014

 
June 11, 2015

 
 
Final maturity date
 
January 17, 2016

 
December 17, 2016

 
June 11, 2017

 
 
Maximum advance rates
 
92.2 - 95.0%

 
84.5 - 94.5%

 
92.0 - 98.0%

 
 
Minimum advance rates
 
92.2 - 95.0%

 
84.5 - 94.5%

 
84.0 - 90.0%

 
 
Advanced as equity support
 
$
26,264

 
4,195

 
14,778

 
45,237


Schedule of asset-backed securitizations [Table Text Block] 
Asset-backed Securitizations

The following table summarizes the asset-backed securitization transactions completed during the nine months ended September 30, 2014.
 
 
2014-1
 
2014-2
 
2014-3
 
2014-4
 
2014-5
 
2014-6 (a)
 
Total
 
 
 
 
Class A-1 notes
 
Class A-2 notes
 
Class A-3 notes
 
2014-2 total
 
 
 
Class A-1 notes
 
Class A-2 notes
 
2014-4 total
 
 
 
 
 
 
Date securities issued
 
2/6/14
 
3/12/14
 
3/12/14
 
3/12/14
 
3/12/14
 
4/30/14
 
5/23/14
 
5/23/14
 
5/23/14
 
6/18/14
 
7/31/14
 
 
Total original principal amount
 
$
458,500

 
 
 
 
 
 
 
509,000

 
719,800

 
 
 
 
 
384,500

 
603,000

 
565,000

 
$
3,239,800

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class A senior notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
$
445,000

 
191,000

 
222,000

 
84,000

 
497,000

 
700,700

 
267,500

 
107,500

 
375,000

 
587,000

 
565,000

 
3,169,700

Bond discount
 
—

 
—

 
—

 
(535
)
 
(535
)
 
—

 
—

 
—

 
—

 
—

 
(3,124
)
 
(3,659
)
Issue price
 
$
445,000

 
191,000

 
222,000

 
83,465

 
496,465

 
700,700

 
267,500

 
107,500

 
375,000

 
587,000

 
561,876

 
3,166,041

Cost of funds (1-month LIBOR plus:)
 
0.57
%
 
0.28
%
 
0.60
%
 
0.85
%
 
 
 
0.58
%
 
0.54
%
 
0.95
%
 
 
 
0.55
%
 
0.65
%
 
 
Final maturity date
 
9/25/41

 
6/25/21

 
3/25/30

 
7/27/37

 
 
 
6/25/41

 
11/27/34

 
11/25/43

 
 
 
7/25/41

 
11/25/47

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Class B subordinated notes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total original principal amount
 
$
13,500

 
 
 
 
 
 
 
12,000

 
19,100

 
 
 
 
 
9,500

 
16,000

 

 
70,100

Bond discount
 
(1,132
)
 
 
 
 
 
 
 
(1,046
)
 
(1,467
)
 
 
 
 
 
(1,138
)
 
(1,232
)
 

 
(6,015
)
Issue price
 
$
12,368

 
 
 
 
 
 
 
10,954

 
17,633

 

 
 
 
8,362

 
14,768

 

 
64,085

Cost of funds (1-month LIBOR plus:)
 
1.50
%
 
 
 
 
 
 
 
1.50
%
 
1.50
%
 
 
 
 
 
1.50
%
 
1.50
%
 

 
 
Final maturity date
 
10/25/47

 
 
 
 
 
 
 
6/25/41

 
10/25/50

 
 
 
 
 
9/25/51

 
5/25/49

 


 
 

(a)
Total original principal amount excludes the Class B subordinated notes of $8.3 million that were retained at issuance. As of September 30, 2014, the Company has a total of $64.6 million (par value) of its own Class B subordinated notes remaining from prior completed asset-backed securitizations that are not included in the Company's consolidated balance sheet. If the Company sells these notes to third parties, the Company would obtain cash proceeds equal to the market value of the notes on the date of such sale.  Upon sale, these notes would be shown as “bonds and notes payable” in the Company's consolidated balance sheet.  The Company believes the market value of such notes is currently less than par value.  Any excess of the par value over the market value on the date of sale would be recognized by the Company as interest expense over the life of the bonds.

Derivative Financial Instruments (Tables)
Interest Rate Swaps - 1:3 Basis swaps 
Basis Swaps

The following table summarizes the Company’s basis swaps outstanding as of September 30, 2014 and December 31, 2013 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").
 
 
Maturity
 
Notional amount
 
 
2021
 
 
$
250,000

 
 
2022
 
 
1,900,000

 
 
2023
 
 
3,650,000

 
 
2024
 
 
250,000

 
 
2026
 
 
800,000

 
 
2028
 
 
100,000

 
 
2036
 
 
700,000

 
 
2039
(a)
 
150,000

 
 
2040
(b)
 
200,000

 
 
 
 
 
$
8,000,000

(c)
(a)This derivative has a forward effective start date in 2015.
(b)This derivative has a forward effective start date in 2020.
(c)
The weighted average rate paid by the Company on the 1:3 Basis Swaps as of September 30, 2014 and December 31, 2013 was one-month LIBOR plus 3.5 basis points
Interest Rate Swaps - Floor Income Hedges 
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 September 30, 2014
 
As of December 31, 2013
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
 
 
 
2014
 
$
—

 
—
%
 
$
1,750,000

 
0.71
%
2015
 
1,100,000

 
0.89

 
1,100,000

 
0.89

2016
 
750,000

 
0.85

 
750,000

 
0.85

2017
 
1,250,000

 
0.86

 
1,250,000

 
0.86

 
 
$
3,100,000

 
0.87
%
 
$
4,850,000

 
0.81
%

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

The Company had the following derivatives outstanding as of September 30, 2014 and December 31, 2013 that are used to effectively convert the variable interest rate on a portion of the Junior Subordinated Hybrid Securities ("Hybrid Securities") to a fixed rate.
 
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 
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. As a result of the Euro Notes, the Company is exposed to market risk related to fluctuations in foreign currency exchange rates between the U.S. dollar and Euro. The principal and accrued interest on these notes are re-measured at each reporting period and recorded in the Company’s consolidated balance sheet in U.S. dollars based on the foreign currency exchange rate on that date.

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

The following table shows the income statement impact as a result of the re-measurement of the Euro Notes and the change in the fair value of the related derivative instrument.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013 (b)
 
2014
 
2013 (b)
Re-measurement of Euro Notes
$
37,418

 
(39,974
)
 
39,216

 
(25,902
)
Change in fair value of cross-currency interest rate swaps
(37,224
)
 
39,074

 
(40,261
)
 
18,978

Total impact to consolidated statements of income - income (expense) (a)
$
194

 
(900
)
 
(1,045
)
 
(6,924
)
(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.
(b)
The 2013 operating results include the re-measurement of an additional €420.5 million of student loan asset-backed Euro notes and the change in fair value of a related cross-currency interest rate swap entered into in connection with the issuance of such notes. In November 2013, the principal amount outstanding on the notes was changed to U.S. dollars and the cross-currency interest swap was terminated.
The re-measurement of the Euro-denominated bonds generally correlates with the change in fair value of the corresponding cross-currency interest rate swap. However, the Company will experience unrealized gains or losses related to the cross-currency interest rate swap if the two underlying indices (and related forward curve) do not move in parallel.
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value 
Consolidated Financial Statement Impact Related to Derivatives

The following table summarizes the fair value of the Company’s derivatives as reflected in the consolidated balance sheets:
 
Fair value of asset derivatives
 
Fair value of liability derivatives
 
As of
 
As of
 
As of
 
As of
 
September 30,
2014
 
December 31,
2013
 
September 30,
2014
 
December 31,
2013
1:3 basis swaps
$
50,965

 
18,490

 
—

 
—

Interest rate swaps - floor income hedges
8,804

 
7,183

 
6,297

 
15,849

Interest rate swap option - floor income hedge
8,240

 
—

 
—

 
—

Interest rate swaps - hybrid debt hedges
—

 
—

 
5,090

 
2,120

Cross-currency interest rate swap
—


36,834

 
3,427

 
—

Total
$
68,009

 
62,507

 
14,814

 
17,969



During the nine months ended September 30, 2013, the Company terminated certain derivatives for gross proceeds and payments of $2.7 million and $9.2 million, respectively. There were no derivative terminations during the first nine months of 2014.
Schedule of Derivative Instruments [Table Text Block] 
Offsetting of Derivative Assets/Liabilities

The Company records derivative instruments in the consolidated balance sheets on a gross basis as either an asset or liability measured at its fair value. Certain of the Company's derivative instruments are subject to right of offset provisions with counterparties. The following tables include the gross amounts related to the Company's derivative portfolio recognized in the consolidated balance sheets, reconciled to the net amount when excluding derivatives subject to enforceable master netting arrangements and cash collateral received/pledged:

 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative assets
 
Gross amounts of recognized assets presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral received
 
Net asset (liability)
Balance as of September 30, 2014
 
$
68,009

 
(11,387
)
 
—

 
56,622

Balance as of December 31, 2013
 
62,507

 
(15,437
)
 
(15,959
)
 
31,111


 
 
 
 
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 (received)
 
Net asset (liability)
Balance as of September 30, 2014
 
$
(14,814
)
 
11,387

 
(22,422
)
 
(25,849
)
Balance as of December 31, 2013
 
(17,969
)
 
15,437

 
3,630

 
1,098

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance 

The following table summarizes the effect of derivative instruments in the consolidated statements of income.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2014
 
2013
 
2014
 
2013
Settlements:
 

 
 

 
 

 
 

1:3 basis swaps
$
808

 
781

 
2,547

 
2,474

Interest rate swaps - floor income hedges
(5,421
)
 
(7,178
)
 
(19,345
)
 
(24,017
)
Interest rate swaps - hybrid debt hedges
(259
)
 
(256
)
 
(767
)
 
(1,413
)
Cross-currency interest rate swaps
38

 
(35
)
 
288

 
(273
)
Total settlements - expense
(4,834
)
 
(6,688
)
 
(17,277
)
 
(23,229
)
Change in fair value:
 

 
 

 
 

 
 

1:3 basis swaps
19,455

 
(2,161
)
 
32,475

 
9,402

Interest rate swaps - floor income hedges
10,628

 
(9,599
)
 
11,173

 
33,231

Interest rate swap option - floor income hedge
(847
)
 
—

 
(847
)
 
—

Interest rate swaps - hybrid debt hedges
(393
)
 
2,700

 
(2,971
)
 
11,790

Cross-currency interest rate swaps
(37,224
)
 
39,074

 
(40,261
)
 
18,978

Other
—

 
—

 
—

 
342

Total change in fair value - income (expense)
(8,381
)
 
30,014

 
(431
)
 
73,743

Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
37,418

 
(39,974
)
 
39,216

 
(25,902
)
Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense)
$
24,203

 
(16,648
)
 
21,508

 
24,612

Investments (Tables)
Summary Investment Holdings 
A summary of the Company's investments and restricted investments follows:
 
As of September 30, 2014
 
As of December 31, 2013
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses (a)
 
Fair value
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
 
 
 
 
 
 
 
 
Investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities (b)
$
123,898

 
6,309

 
(153
)
 
130,054

 
171,931

 
7,111

 
(1,241
)
 
177,801

Equity securities
1,478

 
1,959

 
(21
)
 
3,416

 
1,502

 
1,783

 
(3
)
 
3,282

Total available-for-sale investments
$
125,376

 
8,268

 
(174
)
 
133,470

 
173,433

 
8,894

 
(1,244
)
 
181,083

Trading investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed securities
 
 
 
 
 
 
5,370

 
 
 
 
 
 
 
10,957

Equity securities
 
 
 
 
 
 
8,940

 
 
 
 
 
 
 
—

Total trading investments
 
 
 
 
 
 
14,310

 
 
 
 
 
 
 
10,957

Total available-for-sale and trading investments

 

 

 
$
147,780

 
 
 
 
 


 
192,040

Restricted Investments (c):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Guaranteed investment contracts - held-to-maturity
 
 
 
 
 
 
$
8,205

 
 
 
 
 
 
 
7,285


    
(a)
As of September 30, 2014, the Company considered the decline in market value of its available-for-sale investments to be temporary in nature and did not consider any of its investments other-than-temporarily impaired.

(b)
As of September 30, 2014, the stated maturities of the majority of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years.

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

Realized Gain (Loss) on Investments [Table Text Block] 
The amounts reclassified from accumulated other comprehensive income related to the realized gains and losses on available-for-sale-securities is summarized below.
 
 
Three months ended September 30,
 
Nine months ended September 30,
Affected line item in the consolidated statements of income - income (expense):
 
2014
 
2013
 
2014
 
2013
Other income
 
$
8

 
730

 
8,319

 
2,246

Income tax expense
 
(3
)
 
(270
)
 
(3,078
)
 
(831
)
Net
 
$
5

 
460

 
5,241

 
1,415

Business Combination Estimated Fair Value of Assets (Tables)
Fair Value, by Balance Sheet Grouping [Table Text Block]
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date.
Cash and cash equivalents
 
$
326

Accounts receivable
 
961

Property and equipment
 
105

Other assets
 
22

Intangible assets
 
37,188

Excess cost over fair value of net assets acquired (goodwill)
 
9,082

Other liabilities
 
(1,341
)
Net assets acquired
 
$
46,343

The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:
 
As of September 30, 2014
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
29,975,188

 
28,701,344

 
—

 
—

 
29,975,188

Cash and cash equivalents
74,579

 
74,579

 
74,579

 
—

 
—

Investments
147,780

 
147,780

 
3,825

 
143,955

 
—

Restricted cash
859,302

 
859,302

 
859,302

 
—

 
—

Restricted cash – due to customers
72,836

 
72,836

 
72,836

 
—

 
—

Restricted investments
8,205

 
8,205

 
8,205

 
—

 
—

Accrued interest receivable
352,205

 
352,205

 
—

 
352,205

 
—

Derivative instruments
68,009

 
68,009

 
—

 
68,009

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
28,738,353

 
28,737,456

 
—

 
28,738,353

 
—

Accrued interest payable
25,221

 
25,221

 
—

 
25,221

 
—

Due to customers
72,836

 
72,836

 
72,836

 
—

 
—

Derivative instruments
14,814

 
14,814

 
—

 
14,814

 
—

 
As of December 31, 2013
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
26,641,383

 
25,907,589

 
—

 
—

 
26,641,383

Cash and cash equivalents
63,267

 
63,267

 
63,267

 
—

 
—

Investments
192,040

 
192,040

 
3,761

 
188,279

 
—

Restricted cash
727,838

 
727,838

 
727,838

 
—

 
—

Restricted cash – due to customers
167,576

 
167,576

 
167,576

 
—

 
—

Restricted investments
7,285

 
7,285

 
7,285

 
—

 
—

Accrued interest receivable
314,553

 
314,553

 
—

 
314,553

 
—

Derivative instruments
62,507

 
62,507

 
—

 
62,507

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
25,577,250

 
25,955,289

 
—

 
25,577,250

 
—

Accrued interest payable
21,725

 
21,725

 
—

 
21,725

 
—

Due to customers
167,576

 
167,576

 
167,576

 
—

 
—

Derivative instruments
17,969

 
17,969

 
—

 
17,969

 
—

Intangible Assets Intangible Assets (Tables)
Schedule of Finite-Lived Intangible Assets [Table Text Block] 
Intangible assets consist of the following:

 
Weighted average remaining useful life as of September 30, 2014 (months)
 
As of September 30, 2014
 
As of December 31, 2013
 
 
 
Amortizable intangible assets:
 
 
 
Customer relationships (net of accumulated amortization of $22,866 and $19,821, respectively)
207
 
$
28,612

 
6,132

Computer software (net of accumulated amortization of $1,210 and $0, respectively)
44
 
7,656

 
—

Trade names (net of accumulated amortization of $156 and $0, respectively)
236
 
6,266

 
—

Covenants not to compete (net of accumulated amortization of $12 and $0, respectively)
116
 
342

 
—

Total - amortizable intangible assets
181
 
$
42,876

 
6,132

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] 
The Company recorded amortization expense on its intangible assets of $2.0 million and $0.8 million during the three months ended September 30, 2014 and 2013, respectively, and $4.4 million and $2.5 million during the nine months ended September 30, 2014 and 2013, respectively. The Company will continue to amortize intangible assets over their remaining useful lives. As of September 30, 2014 the Company estimates it will record amortization expense as follows:

2014 (Q4)
$
1,984

2015
8,695

2016
5,349

2017
3,862

2018
3,533

2019 and thereafter
19,453

 
$
42,876

Goodwill Goodwill (Tables)
Schedule of Goodwill [Table Text Block]
The change in the carrying amount of goodwill by operating segment was as follows:

 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment Services
 
Asset Generation and Management
 
Total
Balance as of December 31, 2013
$
8,596

 
58,086

 
8,553

 
41,883

 
117,118

Goodwill acquired during the period
—

 
9,082

 
—

 
—

 
9,082

Balance as of September 30, 2014
$
8,596

 
67,168

 
8,553

 
41,883

 
126,200

Earnings per Common Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted
 
Three months ended September 30,
 
2014
 
2013
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
84,330

 
889

 
85,219

 
62,277

 
553

 
62,830

 
 
 
 
 


 
 
 
 
 
 
Denominator:


 


 


 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
45,948,255

 
484,425

 
46,432,680

 
46,086,743

 
409,869

 
46,496,612

Earnings per share - basic and diluted
$
1.84

 
1.84

 
1.84

 
1.35

 
1.35

 
1.35

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30,
 
2014
 
2013
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
231,725

 
2,274

 
233,999

 
230,141

 
2,011

 
232,152

 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
46,044,429

 
451,880

 
46,496,309

 
46,189,200

 
404,041

 
46,593,241

Earnings per share - basic and diluted
$
5.03

 
5.03

 
5.03

 
4.98

 
4.98

 
4.98

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

See note 1 of the notes to consolidated financial statements included in the 2013 Annual Report for a description of the Company's operating segments. The following tables include the results of each of the Company's operating segments reconciled to the consolidated financial statements.
 
Three months ended September 30, 2014
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
5

 
2

 
—

 
7

 
187,949

 
1,814

 
(346
)
 
189,424

Interest expense
—

 
—

 
—

 
—

 
71,037

 
1,246

 
(346
)
 
71,937

Net interest income
5

 
2

 
—

 
7

 
116,912

 
568

 
—

 
117,487

Less provision for loan losses
—

 
—

 
—

 
—

 
2,000

 
—

 
—

 
2,000

Net interest income after provision for loan losses
5

 
2

 
—

 
7

 
114,912

 
568

 
—

 
115,487

Other income:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
52,659

 
—

 
—

 
52,659

 
—

 
—

 
—

 
52,659

Intersegment servicing revenue
13,432

 
—

 
—

 
13,432

 
—

 
—

 
(13,432
)
 
—

Tuition payment processing and campus commerce revenue
—

 
26,399

 
—

 
26,399

 
—

 
—

 
—

 
26,399

Enrollment services revenue
—

 
—

 
22,936

 
22,936

 
—

 
—

 
—

 
22,936

Other income
—

 
—

 
—

 
—

 
4,294

 
3,356

 
—

 
7,650

Gain on sale of loans and debt repurchases
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Derivative market value and foreign currency adjustments, net
—

 
—

 
—

 
—

 
29,430

 
(393
)
 
—

 
29,037

Derivative settlements, net
—

 
—

 
—

 
—

 
(4,575
)
 
(259
)
 
—

 
(4,834
)
Total other income
66,091

 
26,399

 
22,936

 
115,426

 
29,149

 
2,704

 
(13,432
)
 
133,847

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
37,062

 
13,288

 
4,474

 
54,824

 
565

 
5,709

 
—

 
61,098

Cost to provide enrollment services
—

 
—

 
14,178

 
14,178

 
—

 
—

 
—

 
14,178

Depreciation and amortization
2,558

 
2,396

 
41

 
4,995

 
—

 
498

 
—

 
5,493

Other
15,028

 
3,312

 
1,624

 
19,964

 
8,636

 
8,076

 
—

 
36,676

Intersegment expenses, net
906

 
1,481

 
761

 
3,148

 
13,611

 
(3,327
)
 
(13,432
)
 
—

Total operating expenses
55,554

 
20,477

 
21,078

 
97,109

 
22,812

 
10,956

 
(13,432
)
 
117,445

Income (loss) before income taxes and corporate overhead allocation
10,542

 
5,924

 
1,858

 
18,324

 
121,249

 
(7,684
)
 
—

 
131,889

Corporate overhead allocation
(2,567
)
 
(856
)
 
(855
)
 
(4,278
)
 
(1,026
)
 
5,304

 
—

 
—

Income (loss) before income taxes
7,975

 
5,068

 
1,003

 
14,046

 
120,223

 
(2,380
)
 
—

 
131,889

Income tax (expense) benefit
(3,030
)
 
(1,926
)
 
(381
)
 
(5,337
)
 
(45,684
)
 
4,508

 
—

 
(46,513
)
Net income
4,945

 
3,142

 
622

 
8,709

 
74,539

 
2,128

 
—

 
85,376

  Net income attributable to noncontrolling interest
—

 
—

 
—

 
—

 
—

 
157

 
—

 
157

Net income attributable to Nelnet, Inc.
$
4,945

 
3,142

 
622

 
8,709

 
74,539

 
1,971

 
—

 
85,219

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended September 30, 2013
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
10

 
—

 
—

 
10

 
158,793

 
2,201

 
(767
)
 
160,237

Interest expense
—

 
—

 
—

 
—

 
56,100

 
(18
)
 
(767
)
 
55,315

Net interest income
10

 
—

 
—

 
10

 
102,693

 
2,219

 
—

 
104,922

Less provision for loan losses
—

 
—

 
—

 
—

 
5,000

 
—

 
—

 
5,000

Net interest income after provision for loan losses
10

 
—

 
—

 
10

 
97,693

 
2,219

 
—

 
99,922

Other income:
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
64,582

 
—

 
—

 
64,582

 
—

 
—

 
—

 
64,582

Intersegment servicing revenue
13,519

 
—

 
—

 
13,519

 
—

 
—

 
(13,519
)
 
—

Tuition payment processing and campus commerce revenue
—

 
19,927

 
—

 
19,927

 
—

 
—

 
—

 
19,927

Enrollment services revenue
—

 
—

 
22,563

 
22,563

 
—

 
—

 
—

 
22,563

Other income
—

 
—

 
—

 
—

 
3,981

 
4,632

 
—

 
8,613

Gain on sale of loans and debt repurchases
—

 
—

 
—

 
—

 
2,138

 
—

 
—

 
2,138

Derivative market value and foreign currency adjustments, net
—

 
—

 
—

 
—

 
(12,660
)
 
2,700

 
—

 
(9,960
)
Derivative settlements, net
—

 
—

 
—

 
—

 
(6,432
)
 
(256
)
 
—

 
(6,688
)
Total other income
78,101

 
19,927

 
22,563

 
120,591

 
(12,973
)
 
7,076

 
(13,519
)
 
101,175

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
29,719

 
9,229

 
4,491

 
43,439

 
555

 
4,718

 
—

 
48,712

Cost to provide enrollment services
—

 
—

 
14,668

 
14,668

 
—

 
—

 
—

 
14,668

Depreciation and amortization
2,677

 
1,117

 
57

 
3,851

 
—

 
489

 
—

 
4,340

Other
19,752

 
1,908

 
1,556

 
23,216

 
7,939

 
8,732

 
—

 
39,887

Intersegment expenses, net
1,457

 
1,431

 
1,139

 
4,027

 
13,705

 
(4,213
)
 
(13,519
)
 
—

Total operating expenses
53,605

 
13,685

 
21,911

 
89,201

 
22,199

 
9,726

 
(13,519
)
 
107,607

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

 
6,242

 
652

 
31,400

 
62,521

 
(431
)
 
—

 
93,490

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

 
—

 
—

Income before income taxes
22,684

 
5,635

 
45

 
28,364

 
61,219

 
3,907

 
—

 
93,490

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

 
—

 
(30,444
)
Net income
14,064

 
3,494

 
28

 
17,586

 
37,956

 
7,504

 
—

 
63,046

  Net income attributable to noncontrolling interest
—

 
—

 
—

 
—

 
—

 
216

 
—

 
216

Net income attributable to Nelnet, Inc.
$
14,064

 
3,494

 
28

 
17,586

 
37,956

 
7,288

 
—

 
62,830

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2014
 
Fee-Based
 
 
 
 
 
 
 
 
 
 
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Enrollment
Services
 
Total Fee-
Based
 
Asset
Generation and
Management
 
Corporate
Activity
and
Overhead
 
Eliminations
 
Total
Total interest income
$
25

 
5

 
—

 
30

 
520,514

 
6,508

 
(1,805
)
 
525,247

Interest expense
—

 
—

 
—

 
—

 
198,449

 
4,532

 
(1,805
)
 
201,176

Net interest income
25

 
5

 
—

 
30

 
322,065

 
1,976

 
—

 
324,071

Less provision for loan losses
—

 
—

 
—

 
—

 
6,000

 
—

 
—

 
6,000

Net interest income after provision for loan losses
25

 
5

 
—

 
30

 
316,065

 
1,976

 
—

 
318,071

Other income:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
183,876

 
—

 
—

 
183,876

 
—

 
—

 
—

 
183,876

Intersegment servicing revenue
41,453

 
—

 
—

 
41,453

 
—

 
—

 
(41,453
)
 
—

Tuition payment processing and campus commerce revenue
—

 
73,468

 
—

 
73,468

 
—

 
—

 
—

 
73,468

Enrollment services revenue
—

 
—

 
65,092

 
65,092

 
—

 
—

 
—

 
65,092

Other income
—

 
—

 
—

 
—

 
12,954

 
28,142

 
—

 
41,096

Gain on sale of loans and debt repurchases
—

 
—

 
—

 
—

 
57

 
—

 
—

 
57

Derivative market value and foreign currency adjustments, net
—

 
—

 
—

 
—

 
41,755

 
(2,970
)
 
—

 
38,785

Derivative settlements, net
—

 
—

 
—

 
—

 
(16,510
)
 
(767
)
 
—

 
(17,277
)
Total other income
225,329

 
73,468

 
65,092

 
363,889

 
38,256

 
24,405

 
(41,453
)
 
385,097

Operating expenses:
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 

Salaries and benefits
102,462

 
34,427

 
12,986

 
149,875

 
1,744

 
15,851

 
—

 
167,470

Cost to provide enrollment services
—

 
—

 
41,964

 
41,964

 
—

 
—

 
—

 
41,964

Depreciation and amortization
8,166

 
5,669

 
129

 
13,964

 
—

 
1,526

 
—

 
15,490

Other
53,295

 
8,915

 
4,917

 
67,127

 
24,627

 
20,926

 
—

 
112,680

Intersegment expenses, net
3,113

 
4,305

 
2,711

 
10,129

 
41,950

 
(10,626
)
 
(41,453
)
 
—

Total operating expenses
167,036

 
53,316

 
62,707

 
283,059

 
68,321

 
27,677

 
(41,453
)
 
337,604

Income (loss) before income taxes and corporate overhead allocation
58,318

 
20,157

 
2,385

 
80,860

 
286,000

 
(1,296
)
 
—

 
365,564

Corporate overhead allocation
(6,487
)
 
(2,163
)
 
(2,162
)
 
(10,812
)
 
(3,604
)
 
14,416

 
—

 
—

Income before income taxes
51,831

 
17,994

 
223

 
70,048

 
282,396

 
13,120

 
—

 
365,564

Income tax (expense) benefit
(19,695
)
 
(6,837
)
 
(85
)
 
(26,617
)
 
(107,309
)
 
3,724

 
—

 
(130,202
)
Net income
32,136

 
11,157

 
138

 
43,431

 
175,087

 
16,844

 
—

 
235,362

  Net income attributable to noncontrolling interest
—

 
—

 
—

 
—

 
—

 
1,363

 
—

 
1,363

Net income attributable to Nelnet, Inc.
$
32,136

 
11,157

 
138

 
43,431

 
175,087

 
15,481

 
—

 
233,999

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

 
—

 
—

 
29

 
472,622

 
6,708

 
(2,420
)
 
476,939

Interest expense
—

 
—

 
—

 
—

 
170,502

 
3,718

 
(2,420
)
 
171,800

Net interest income
29

 
—

 
—

 
29

 
302,120

 
2,990

 
—

 
305,139

Less provision for loan losses
—

 
—

 
—

 
—

 
15,000

 
—

 
—

 
15,000

Net interest income after provision for loan losses
29

 
—

 
—

 
29

 
287,120

 
2,990

 
—

 
290,139

Other income:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Loan and guaranty servicing revenue
180,261

 
—

 
—

 
180,261

 
—

 
—

 
—

 
180,261

Intersegment servicing revenue
42,375

 
—

 
—

 
42,375

 
—

 
—

 
(42,375
)
 
—

Tuition payment processing and campus commerce revenue
—

 
61,694

 
—

 
61,694

 
—

 
—

 
—

 
61,694

Enrollment services revenue
—

 
—

 
76,343

 
76,343

 
—

 
—

 
—

 
76,343

Other income
—

 
—

 
—

 
—

 
11,207

 
19,110

 
—

 
30,317

Gain on sale of loans and debt repurchases
—

 
—

 
—

 
—

 
10,900

 
—

 
—

 
10,900

Derivative market value and foreign currency adjustments, net
—

 
—

 
—

 
—

 
35,711

 
12,130

 
—

 
47,841

Derivative settlements, net
—

 
—

 
—

 
—

 
(21,816
)
 
(1,413
)
 
—

 
(23,229
)
Total other income
222,636

 
61,694

 
76,343

 
360,673

 
36,002

 
29,827

 
(42,375
)
 
384,127

Operating expenses:
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Salaries and benefits
86,254

 
28,015

 
15,067

 
129,336

 
1,709

 
13,004

 
—

 
144,049

Cost to provide enrollment services
—

 
—

 
51,097

 
51,097

 
—

 
—

 
—

 
51,097

Depreciation and amortization
8,197

 
3,387

 
179

 
11,763

 
—

 
1,274

 
—

 
13,037

Other
56,173

 
6,387

 
4,450

 
67,010

 
23,375

 
18,808

 
—

 
109,193

Intersegment expenses, net
3,243

 
4,350

 
3,418

 
11,011

 
42,955

 
(11,591
)
 
(42,375
)
 
—

Total operating expenses
153,867

 
42,139

 
74,211

 
270,217

 
68,039

 
21,495

 
(42,375
)
 
317,376

Income before income taxes and corporate overhead allocation
68,798

 
19,555

 
2,132

 
90,485

 
255,083

 
11,322

 
—

 
356,890

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

 
—

 
—

Income before income taxes
64,466

 
18,112

 
689

 
83,267

 
251,988

 
21,635

 
—

 
356,890

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

 
—

 
(123,637
)
Net income
39,968

 
11,230

 
428

 
51,626

 
156,233

 
25,394

 
—

 
233,253

  Net income attributable to noncontrolling interest
—

 
—

 
—

 
—

 
—

 
1,101

 
—

 
1,101

Net income attributable to Nelnet, Inc.
$
39,968

 
11,230

 
428

 
51,626

 
156,233

 
24,293

 
—

 
232,152

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 nine months ended September 30, 2014.
 
As of September 30, 2014
 
As of December 31, 2013
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
Investments:
 
 
 
 


 
 
 
 
 
 
Student loan asset-backed securities
$
—

 
143,955

 
143,955

 
—

 
188,279

 
188,279

Equity securities
3,416

 
—

 
3,416

 
3,282

 
—

 
3,282

Debt securities
409

 
—

 
409

 
479

 
—

 
479

Total investments
3,825

 
143,955

 
147,780

 
3,761

 
188,279

 
192,040

Fair value of derivative instruments
—

 
68,009

 
68,009

 
—

 
62,507

 
62,507

Total assets
$
3,825

 
211,964

 
215,789

 
3,761

 
250,786

 
254,547

Liabilities:
 

 
 

 
 

 
 
 
 
 
 
Fair value of derivative instruments
$
—

 
14,814

 
14,814

 
—

 
17,969

 
17,969

Total liabilities
$
—

 
14,814

 
14,814

 
—

 
17,969

 
17,969


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.
Cash and cash equivalents
 
$
326

Accounts receivable
 
961

Property and equipment
 
105

Other assets
 
22

Intangible assets
 
37,188

Excess cost over fair value of net assets acquired (goodwill)
 
9,082

Other liabilities
 
(1,341
)
Net assets acquired
 
$
46,343

The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:
 
As of September 30, 2014
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
29,975,188

 
28,701,344

 
—

 
—

 
29,975,188

Cash and cash equivalents
74,579

 
74,579

 
74,579

 
—

 
—

Investments
147,780

 
147,780

 
3,825

 
143,955

 
—

Restricted cash
859,302

 
859,302

 
859,302

 
—

 
—

Restricted cash – due to customers
72,836

 
72,836

 
72,836

 
—

 
—

Restricted investments
8,205

 
8,205

 
8,205

 
—

 
—

Accrued interest receivable
352,205

 
352,205

 
—

 
352,205

 
—

Derivative instruments
68,009

 
68,009

 
—

 
68,009

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
28,738,353

 
28,737,456

 
—

 
28,738,353

 
—

Accrued interest payable
25,221

 
25,221

 
—

 
25,221

 
—

Due to customers
72,836

 
72,836

 
72,836

 
—

 
—

Derivative instruments
14,814

 
14,814

 
—

 
14,814

 
—

 
As of December 31, 2013
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
26,641,383

 
25,907,589

 
—

 
—

 
26,641,383

Cash and cash equivalents
63,267

 
63,267

 
63,267

 
—

 
—

Investments
192,040

 
192,040

 
3,761

 
188,279

 
—

Restricted cash
727,838

 
727,838

 
727,838

 
—

 
—

Restricted cash – due to customers
167,576

 
167,576

 
167,576

 
—

 
—

Restricted investments
7,285

 
7,285

 
7,285

 
—

 
—

Accrued interest receivable
314,553

 
314,553

 
—

 
314,553

 
—

Derivative instruments
62,507

 
62,507

 
—

 
62,507

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
25,577,250

 
25,955,289

 
—

 
25,577,250

 
—

Accrued interest payable
21,725

 
21,725

 
—

 
21,725

 
—

Due to customers
167,576

 
167,576

 
167,576

 
—

 
—

Derivative instruments
17,969

 
17,969

 
—

 
17,969

 
—

Student Loans Receivable (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Jun. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Allowance for loan losses
$ 51,968 
$ 52,467 
$ 55,122 
$ 54,197 
$ 51,611 
$ 51,902 
Student loans receivable
28,701,344 
 
25,907,589 
 
 
 
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Allowance for loan losses
39,470 
 
 
42,406 
 
 
Non-federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Allowance for loan losses
12,498 
 
 
11,791 
 
 
held for investment [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
28,929,222 
 
26,121,306 
 
 
 
Loan discount, net of unamortized loan premiums and deferred origination costs
175,910 1
 
158,595 1
 
 
 
Student loans receivable
28,701,344 
 
25,907,589 
 
 
 
held for investment [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
28,851,599 
 
26,050,203 
 
 
 
Allowance for loan losses
39,470 
 
43,440 
 
 
 
held for investment [Member] |
Non-federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
77,623 
 
71,103 
 
 
 
Allowance for loan losses
12,498 
 
11,682 
 
 
 
held for investment [Member] |
Stafford and Other [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
6,218,910 
 
6,686,626 
 
 
 
held for investment [Member] |
Consolidation Loans [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
22,632,689 
 
19,363,577 
 
 
 
Non-accretable discount [Member] |
held for investment [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
8,400,000 
 
4,400,000 
 
 
 
Loan discount, net of unamortized loan premiums and deferred origination costs
$ 28,800 
 
$ 20,200 
 
 
 
[1] 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. As of September 30, 2014 and December 31, 2013, "loan discount, net of unamortized loan premiums and deferred origination costs" included $28.8 million and $20.2 million, respectively, of non-accretable discount associated with purchased loans of $8.4 billion and $4.4 billion, respectively.
Student Loans Receivable and Allowance for Loan Losses Residual Interests (Details) (USD $)
9 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2014
Purchase of residual interest [Member]
Sep. 30, 2014
Discount on bonds and notes payable [Member]
Dec. 31, 2013
Discount on bonds and notes payable [Member]
Sep. 30, 2014
Discount on bonds and notes payable [Member]
Purchase of residual interest [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Financing Receivable, Significant Purchases
 
 
$ 2,600,000,000 
 
 
 
Debt and Capital Lease Obligations
28,737,456,000 
25,955,289,000 
2,600,000,000 
(407,301,000)
(258,056,000)
163,700,000 
Unamortized Loan Commitment and Origination Fees and Unamortized Discounts or Premiums, Other
 
 
$ 68,700,000 
 
 
 
Student Loans Receivable and Allowance for Loan Losses Allowance for Loan Losses (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
Allowance for loan losses - balance
$ 52,467 
$ 51,611 
$ 55,122 
$ 51,902 
Provision for loan losses
2,000 
5,000 
6,000 
15,000 
Charge-offs
(4,144)
(4,048)
(12,932)
(14,742)
Recoveries - non-federally insured loans
279 
363 
989 
1,173 
Purchase (sale) of federally insured loans and other, net
70 
700 
320 
(1,243)
Transfer from repurchase obligation related to non-federally insured loans purchased, net
1,296 
571 
2,469 
2,107 
Allowance for loan losses - balance
51,968 
54,197 
51,968 
54,197 
Federally insured loans [Member]
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
Provision for loan losses
2,000 
5,000 
7,000 
16,000 
Charge-offs
(3,521)
(3,142)
(11,290)
(12,472)
Allowance for loan losses - balance
39,470 
42,406 
39,470 
42,406 
Non-federally insured loans [Member]
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
Provision for loan losses
0 
0 
(1,000)
(1,000)
Charge-offs
(623)
(906)
(1,642)
(2,270)
Allowance for loan losses - balance
$ 12,498 
$ 11,791 
$ 12,498 
$ 11,791 
Student Loans Receivable and Allowance for Loan Losses Repurchase Obligations (Details) (USD $)
3 Months Ended 9 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Sep. 30, 2014
Cumulative non-federally insured loans participated subject to repurchase agreement [Member]
Dec. 31, 2011
Non-federally insured loans sold subject to repurchase agreement [Member]
Sep. 30, 2014
Non-federally insured loans sold subject to repurchase agreement [Member]
Repurchase Obligation [Line Items]
 
 
 
 
 
 
 
 
Cumulative amount of participated non-federally insured student loans
 
 
 
 
 
$ 103,600,000 
 
 
Days delinquent to trigger repurchase range, minimum
 
 
 
 
 
60 days 
 
 
Days delinquent to trigger repurchase range, maximum
 
 
 
 
 
90 days 
 
 
Proceeds from sale of non-federally insured student loans subject to repurchase agreements
 
 
 
 
 
 
91,300,000 
 
Percent of par value of non-federally insured student loans subject to repurchase agreements
 
 
 
 
 
 
100.00% 
 
Days delinquent to trigger repurchase
 
 
 
 
 
 
60 days 
 
Change in Repurchase Obligation [Roll Forward]
 
 
 
 
 
 
 
 
Beginning balance
14,827,000 
14,594,000 
16,143,000 
16,130,000 
 
 
 
 
Transfer to the Allowance for Loan Losses Related to Loans Sold or Purchased and other, net
1,296,000 
571,000 
2,612,000 
2,107,000 
 
 
 
 
Ending balance
13,531,000 
14,023,000 
13,531,000 
14,023,000 
 
 
 
 
Student loans receivable
$ 28,701,344,000 
 
$ 28,701,344,000 
 
$ 25,907,589,000 
 
 
$ 57,000,000 
Student Loans Receivable and Allowance for Loan Losses Student Loan Status and Delinquency (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Federally insured loans [Member]
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
Loans in-school/grace/deferment
$ 3,072,318 
$ 2,872,505 
$ 3,039,819 
Loans in forbearance
3,505,103 
3,370,025 
3,396,748 
Student loans receivable, gross
28,851,599 
26,050,203 
24,792,577 
Loans in repayment status:
 
 
 
Loans current
18,672,178 
16,337,922 
15,236,060 
Loans current, percentage
83.80% 
82.50% 
83.10% 
Loans delinquent 31-60 days
990,696 
967,318 
851,397 
Loans delinquent 31-60 days, percentage
4.50% 
4.90% 
4.60% 
Loans delinquent 61-90 days
569,879 
550,333 
480,285 
Loans delinquent 61-90 days, percentage
2.60% 
2.80% 
2.60% 
Loans delinquent 91-120 days
452,463 
390,791 
372,697 
Loans delinquent 91-120 days, percentage
2.00% 
2.00% 
2.00% 
Loans delinquent 121-270 days
1,183,616 
1,117,936 
978,234 
Loans delinquent 121-270 days, percentage
5.30% 
5.60% 
5.30% 
Loans Delinquent Greater than 271 Days
405,346 
443,373 
437,337 
Loans delinquent 271 days or greater, percentage
1.80% 
2.20% 
2.40% 
Total loans in repayment
$ 22,274,178 
$ 19,807,673 
$ 18,356,010 
Total loans in repayment, percentage
100.00% 
100.00% 
100.00% 
Non-federally insured loans [Member]
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
Loans Delinquent 31 Days or Greater in Percentage
11.70% 
12.70% 
13.40% 
Outstanding Debt Obligations (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Debt Instrument [Line Items]
 
 
Bonds and notes payable
$ 28,737,456 
$ 25,955,289 
Variable-rate bonds and notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
28,197,754 
24,614,143 
Bonds and notes based on indices [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
26,639,879 
23,479,893 
Debt Instrument, Maturity Date Range, Start
May 25, 2018 
May 25, 2018 
Debt Instrument, Maturity Date Range, End
Aug. 26, 2052 
Aug. 26, 2052 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum
0.24% 
0.25% 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum
6.90% 
6.90% 
Bonds and notes based on auction or remarketing [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
1,557,875 
1,134,250 
Debt Instrument, Maturity Date Range, Start
May 01, 2028 
May 01, 2028 
Debt Instrument, Maturity Date Range, End
Nov. 26, 2046 
Nov. 26, 2046 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum
0.07% 
0.07% 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum
2.11% 
2.17% 
FFELP warehouse facilities [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
787,042 
1,396,344 
Debt Instrument, Maturity Date Range, Start
Jan. 17, 2016 
Jan. 17, 2016 
Debt Instrument, Maturity Date Range, End
Jun. 11, 2017 
Jun. 12, 2016 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum
0.16% 
0.17% 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum
0.25% 
0.25% 
Line of Credit [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
0 
45,000 
Debt Instrument, Maturity Date Range, Start
Jun. 30, 2019 
Mar. 28, 2018 
Debt Instrument, Maturity Date Range, End
Jun. 30, 2019 
Mar. 28, 2018 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum
0.00% 
1.67% 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum
0.00% 
1.67% 
Junior Subordinated Debt [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
96,457 
96,457 
Debt Instrument, Maturity Date Range, Start
Sep. 15, 2061 
Sep. 15, 2061 
Debt Instrument, Maturity Date Range, End
Sep. 15, 2061 
Sep. 15, 2061 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum
3.61% 
3.62% 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum
3.61% 
3.62% 
Other borrowings [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
63,504 
61,401 
Debt Instrument, Maturity Date Range, Start
Nov. 14, 2014 
Apr. 11, 2014 
Debt Instrument, Maturity Date Range, End
Dec. 31, 2018 
Nov. 11, 2015 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum
1.66% 
1.67% 
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum
5.10% 
5.10% 
Bonds and notes payable, gross [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
29,144,757 
26,213,345 
Discount on bonds and notes payable [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
$ (407,301)
$ (258,056)
Bonds and Notes Payable Outstanding Lines of Credit (Details) (USD $)
3 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2014
NHELP-II Warehouse [Member]
Sep. 30, 2014
NFSLW-I Warehouse [Member]
Sep. 30, 2014
NHELP-III Warehouse [Member]
Sep. 30, 2014
FFELP Warehouse Total [Member]
Sep. 30, 2014
Line of Credit [Member]
Jun. 30, 2014
Line of Credit [Member]
Sep. 30, 2014
Secured line of credit [Member]
Oct. 31, 2014
Secured line of credit [Member]
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
Maximum financing amount
$ 500,000,000 1
$ 500,000,000 2
$ 750,000,000 
$ 1,750,000,000 
$ 350,000,000 
$ 275,000,000 
$ 50,000,000 
$ 75,000,000 
Amount outstanding
40,433,000 1
308,344,000 2
438,265,000 
787,042,000 
0 
 
 
 
Amount available
459,567,000 1
191,656,000 2
311,735,000 
962,958,000 
350,000,000 
 
 
 
Expiration of liquidity provisions
Dec. 17, 2014 1
Jun. 11, 2015 2
Feb. 05, 2015 
 
 
 
 
 
Debt Instrument, Maturity Date Range, End
Dec. 17, 2016 1
Jun. 11, 2017 2
Jan. 17, 2016 
 
 
 
 
 
Line of credit facility, termination date
 
 
 
 
Jun. 30, 2019 
 
 
 
Maximum Advance Rates - range minimum
84.50% 1
92.00% 2
92.15% 
 
 
 
 
 
Maximum advance rates - range maximum
94.50% 1
98.00% 2
95.00% 
 
 
 
 
 
Minimum Advance Rates - range minimum
84.50% 1
84.00% 2
92.15% 
 
 
 
 
 
Minimum advance rates - range maximum
94.50% 1
90.00% 2
95.00% 
 
 
 
 
 
Advanced as equity support
$ 4,195,000 1
$ 14,778,000 2
$ 26,264,000 
$ 45,237,000 
 
 
 
 
Line of Credit Facility, Expiration Date
 
 
 
 
 
 
Oct. 31, 2016 
 
Bonds and Notes Payable Asset-backed Securitizations (Details) (USD $)
9 Months Ended
Sep. 30, 2014
Debt Instrument [Line Items]
 
Debt Instrument, Variable Rate Basis
1-month LIBOR 
Asset-backed securitization issuance, Face Amount
$ 3,239,800,000 
2014-6 Securitization [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization, issuance date
Jul. 31, 2014 1
Asset-backed securitization issuance, Face Amount
565,000,000 1
2014-1 Securitization [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization, issuance date
Feb. 06, 2014 
Asset-backed securitization issuance, Face Amount
458,500,000 
2014-2 Securitization [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization, issuance date
Mar. 12, 2014 
Asset-backed securitization issuance, Face Amount
509,000,000 
2014-2 Securitization [Member] |
2014-2 Securitization Class A-1 [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization, issuance date
Mar. 12, 2014 
2014-2 Securitization [Member] |
2014-2 Securitization Class A-2 [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization, issuance date
Mar. 12, 2014 
2014-2 Securitization [Member] |
2014-2 Securitization Class A-3 [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization, issuance date
Mar. 12, 2014 
2014-3 Securitization [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization, issuance date
Apr. 30, 2014 
Asset-backed securitization issuance, Face Amount
719,800,000 
2014-4 Securitization [Member] [Domain]
 
Debt Instrument [Line Items]
 
Asset-backed securitization, issuance date
May 23, 2014 
Asset-backed securitization issuance, Face Amount
384,500,000 
2014-4 Securitization [Member] [Domain] |
2014-4 Securitization Class A-1 [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization, issuance date
May 23, 2014 
2014-4 Securitization [Member] [Domain] |
2014-4 Securitization Class A-2 [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization, issuance date
May 23, 2014 
2014-5 Securitization [Member] [Domain]
 
Debt Instrument [Line Items]
 
Asset-backed securitization, issuance date
Jun. 18, 2014 
Asset-backed securitization issuance, Face Amount
603,000,000 
Class A [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization issuance, Unamortized Discount
(3,659,000)
Asset-backed securitization issuance, Face Amount
3,169,700,000 
Long-term Debt, Fair Value
3,166,041,000 
Class A [Member] |
2014-6 Securitization [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
0.65% 1
Asset-backed securitization issuance, Unamortized Discount
(3,124,000)1
Asset-backed securitization issuance, Face Amount
565,000,000 1
Long-term Debt, Fair Value
561,876,000 1
Debt Instrument, Maturity Date Range, End
Nov. 25, 2047 1
Class A [Member] |
2014-1 Securitization [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
0.57% 
Asset-backed securitization issuance, Unamortized Discount
0 
Asset-backed securitization issuance, Face Amount
445,000,000 
Long-term Debt, Fair Value
445,000,000 
Debt Instrument, Maturity Date Range, End
Sep. 25, 2041 
Class A [Member] |
2014-2 Securitization [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization issuance, Unamortized Discount
(535,000)
Asset-backed securitization issuance, Face Amount
497,000,000 
Long-term Debt, Fair Value
496,465,000 
Class A [Member] |
2014-2 Securitization [Member] |
2014-2 Securitization Class A-1 [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
0.28% 
Asset-backed securitization issuance, Unamortized Discount
0 
Asset-backed securitization issuance, Face Amount
191,000,000 
Long-term Debt, Fair Value
191,000,000 
Debt Instrument, Maturity Date Range, End
Jun. 25, 2021 
Class A [Member] |
2014-2 Securitization [Member] |
2014-2 Securitization Class A-2 [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
0.60% 
Asset-backed securitization issuance, Unamortized Discount
0 
Asset-backed securitization issuance, Face Amount
222,000,000 
Long-term Debt, Fair Value
222,000,000 
Debt Instrument, Maturity Date Range, End
Mar. 25, 2030 
Class A [Member] |
2014-2 Securitization [Member] |
2014-2 Securitization Class A-3 [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
0.85% 
Asset-backed securitization issuance, Unamortized Discount
(535,000)
Asset-backed securitization issuance, Face Amount
84,000,000 
Long-term Debt, Fair Value
83,465,000 
Debt Instrument, Maturity Date Range, End
Jul. 27, 2037 
Class A [Member] |
2014-3 Securitization [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
0.58% 
Asset-backed securitization issuance, Unamortized Discount
0 
Asset-backed securitization issuance, Face Amount
700,700,000 
Long-term Debt, Fair Value
700,700,000 
Debt Instrument, Maturity Date Range, End
Jun. 25, 2041 
Class A [Member] |
2014-4 Securitization [Member] [Domain]
 
Debt Instrument [Line Items]
 
Asset-backed securitization issuance, Unamortized Discount
0 
Asset-backed securitization issuance, Face Amount
375,000,000 
Long-term Debt, Fair Value
375,000,000 
Class A [Member] |
2014-4 Securitization [Member] [Domain] |
2014-4 Securitization Class A-1 [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
0.54% 
Asset-backed securitization issuance, Unamortized Discount
0 
Asset-backed securitization issuance, Face Amount
267,500,000 
Long-term Debt, Fair Value
267,500,000 
Debt Instrument, Maturity Date Range, End
Nov. 27, 2034 
Class A [Member] |
2014-4 Securitization [Member] [Domain] |
2014-4 Securitization Class A-2 [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
0.95% 
Asset-backed securitization issuance, Unamortized Discount
0 
Asset-backed securitization issuance, Face Amount
107,500,000 
Long-term Debt, Fair Value
107,500,000 
Debt Instrument, Maturity Date Range, End
Nov. 25, 2043 
Class A [Member] |
2014-5 Securitization [Member] [Domain]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
0.55% 
Asset-backed securitization issuance, Unamortized Discount
0 
Asset-backed securitization issuance, Face Amount
587,000,000 
Long-term Debt, Fair Value
587,000,000 
Debt Instrument, Maturity Date Range, End
Jul. 25, 2041 
Class B [Member]
 
Debt Instrument [Line Items]
 
Asset-backed securitization issuance, Unamortized Discount
(6,015,000)
Asset-backed securitization issuance, Face Amount
70,100,000 
Long-term Debt, Fair Value
64,085,000 
Fair Value Disclosure, Off-balance Sheet Risks, Face Amount, Asset
64,600,000 
Class B [Member] |
2014-6 Securitization [Member]
 
Debt Instrument [Line Items]
 
Fair Value Disclosure, Off-balance Sheet Risks, Amount, Asset
8,300,000 
Class B [Member] |
2014-1 Securitization [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
1.50% 
Asset-backed securitization issuance, Unamortized Discount
(1,132,000)
Asset-backed securitization issuance, Face Amount
13,500,000 
Long-term Debt, Fair Value
12,368,000 
Debt Instrument, Maturity Date Range, End
Oct. 25, 2047 
Class B [Member] |
2014-2 Securitization [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
1.50% 
Asset-backed securitization issuance, Unamortized Discount
(1,046,000)
Asset-backed securitization issuance, Face Amount
12,000,000 
Long-term Debt, Fair Value
10,954,000 
Debt Instrument, Maturity Date Range, End
Jun. 25, 2041 
Class B [Member] |
2014-3 Securitization [Member]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
1.50% 
Asset-backed securitization issuance, Unamortized Discount
(1,467,000)
Asset-backed securitization issuance, Face Amount
19,100,000 
Long-term Debt, Fair Value
17,633,000 
Debt Instrument, Maturity Date Range, End
Oct. 25, 2050 
Class B [Member] |
2014-4 Securitization [Member] [Domain]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
1.50% 
Asset-backed securitization issuance, Unamortized Discount
(1,138,000)
Asset-backed securitization issuance, Face Amount
9,500,000 
Long-term Debt, Fair Value
8,362,000 
Debt Instrument, Maturity Date Range, End
Sep. 25, 2051 
Class B [Member] |
2014-5 Securitization [Member] [Domain]
 
Debt Instrument [Line Items]
 
Debt Instrument, Basis Spread on Variable Rate Basis
1.50% 
Asset-backed securitization issuance, Unamortized Discount
(1,232,000)
Asset-backed securitization issuance, Face Amount
16,000,000 
Long-term Debt, Fair Value
$ 14,768,000 
Debt Instrument, Maturity Date Range, End
May 25, 2049 
[1] Total original principal amount excludes the Class B subordinated notes of $8.3 million that were retained at issuance. As of September 30, 2014, the Company has a total of $64.6 million (par value) of its own Class B subordinated notes remaining from prior completed asset-backed securitizations that are not included in the Company's consolidated balance sheet. If the Company sells these notes to third parties, the Company would obtain cash proceeds equal to the market value of the notes on the date of such sale. Upon sale, these notes would be shown as “bonds and notes payable” in the Company's consolidated balance sheet. The Company believes the market value of such notes is currently less than par value. Any excess of the par value over the market value on the date of sale would be recognized by the Company as interest expense over the life of the bonds.
Bonds and Notes Payable Debt Repurchases (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Debt Instrument [Line Items]
 
 
 
 
Gain from debt repurchases
 
 
$ 57,000 
$ 10,866,000 
Asset-backed Securities [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
Extinguishment of Debt, Amount
2,500,000 
15,400,000 
4,000,000 
84,700,000 
Gain from debt repurchases
$ 0 
$ 2,100,000 
$ 57,000 
$ 10,900,000 
Derivative Financial Instruments Outstanding (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Sep. 30, 2014
1:3 basis swaps [Member]
Dec. 31, 2013
1:3 basis swaps [Member]
Sep. 30, 2014
1:3 basis swaps [Member]
Maturity 2021 [Member]
Dec. 31, 2013
1:3 basis swaps [Member]
Maturity 2021 [Member]
Sep. 30, 2014
1:3 basis swaps [Member]
Maturity 2022 [Member]
Dec. 31, 2013
1:3 basis swaps [Member]
Maturity 2022 [Member]
Sep. 30, 2014
1:3 basis swaps [Member]
Maturity 2023 [Member]
Dec. 31, 2013
1:3 basis swaps [Member]
Maturity 2023 [Member]
Sep. 30, 2014
1:3 basis swaps [Member]
Maturity 2024 [Member]
Dec. 31, 2013
1:3 basis swaps [Member]
Maturity 2024 [Member]
Sep. 30, 2014
1:3 basis swaps [Member]
Maturity 2026 [Member]
Dec. 31, 2013
1:3 basis swaps [Member]
Maturity 2026 [Member]
Sep. 30, 2014
1:3 basis swaps [Member]
Maturity 2028 [Member]
Dec. 31, 2013
1:3 basis swaps [Member]
Maturity 2028 [Member]
Sep. 30, 2014
1:3 basis swaps [Member]
Maturity 2036 [Member]
Dec. 31, 2013
1:3 basis swaps [Member]
Maturity 2036 [Member]
Sep. 30, 2014
1:3 basis swaps [Member]
Maturity 2039 [Member]
Dec. 31, 2013
1:3 basis swaps [Member]
Maturity 2039 [Member]
Sep. 30, 2014
1:3 basis swaps [Member]
Maturity 2040 [Member]
Dec. 31, 2013
1:3 basis swaps [Member]
Maturity 2040 [Member]
Sep. 30, 2014
Fixed Rate Floor Income Interest Rate Swap [Member]
Dec. 31, 2013
Fixed Rate Floor Income Interest Rate Swap [Member]
Sep. 30, 2014
Fixed Rate Floor Income Interest Rate Swap [Member]
Maturity 2014 [Member]
Dec. 31, 2013
Fixed Rate Floor Income Interest Rate Swap [Member]
Maturity 2014 [Member]
Sep. 30, 2014
Fixed Rate Floor Income Interest Rate Swap [Member]
Maturity 2015 [Member]
Dec. 31, 2013
Fixed Rate Floor Income Interest Rate Swap [Member]
Maturity 2015 [Member]
Sep. 30, 2014
Fixed Rate Floor Income Interest Rate Swap [Member]
Maturity 2016 [Member]
Dec. 31, 2013
Fixed Rate Floor Income Interest Rate Swap [Member]
Maturity 2016 [Member]
Sep. 30, 2014
Fixed Rate Floor Income Interest Rate Swap [Member]
Maturity 2017 [Member]
Dec. 31, 2013
Fixed Rate Floor Income Interest Rate Swap [Member]
Maturity 2017 [Member]
Sep. 30, 2014
Unsecured Debt Interest Rate Swaps 1 [Member]
Maturity 2036 [Member]
Dec. 31, 2013
Unsecured Debt Interest Rate Swaps 1 [Member]
Maturity 2036 [Member]
Sep. 30, 2014
Interest rate swap option - floor income hedges [Member]
Sep. 30, 2014
Interest rate swap option - floor income hedges [Member]
Dec. 31, 2013
Interest rate swap option - floor income hedges [Member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Financial Instruments Used in Operating Activities
$ 9,087 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 9,100 
 
 
Derivative, Type of Interest Rate Paid on Swap
 
 
 
one-month LIBOR 
one-month LIBOR 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average basis spread on variable rate paid on swap
 
 
 
3.50% 
3.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Notional Amount
 
 
 
8,000,000 1
8,000,000 1
250,000 
250,000 
1,900,000 
1,900,000 
3,650,000 
3,650,000 
250,000 
250,000 
800,000 
800,000 
100,000 
100,000 
700,000 
700,000 
150,000 2
150,000 
200,000 3
200,000 
3,100,000 
4,850,000 
0 
1,750,000 
1,100,000 
1,100,000 
750,000 
750,000 
1,250,000 
1,250,000 
25,000 
25,000 
250,000 
250,000 
 
Derivative, Average Fixed Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.87% 4
0.81% 4
0.00% 4
0.71% 4
0.89% 4
0.89% 4
0.85% 4
0.85% 4
0.86% 4
0.86% 4
4.28% 4
4.28% 
 
 
 
Bonds and notes payable
$ 28,737,456 
 
$ 25,955,289 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Type of Interest Rate Received on Swap
 
 
 
3-month LIBOR 
3-month LIBOR 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3-month LIBOR 
3-month LIBOR 
 
 
 
 
 
 
 
 
3-month LIBOR 
3-month LIBOR 
 
1-month LIBOR 
1-month LIBOR 
Derivative, Swaption Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.30% 
3.30% 
 
Derivative Financial Instruments Cross-currency Interest Rate Swaps (Details)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2014
USD ($)
Sep. 30, 2013
USD ($)
Sep. 30, 2014
USD ($)
Sep. 30, 2013
USD ($)
Dec. 31, 2013
USD ($)
Sep. 30, 2014
Currency Swap [Member]
USD ($)
Sep. 30, 2013
Currency Swap [Member]
USD ($)
Sep. 30, 2014
Currency Swap [Member]
USD ($)
Sep. 30, 2013
Currency Swap [Member]
USD ($)
Sep. 30, 2013
Cross-currency interest rate swap 1 [Member]
EUR (€)
Sep. 30, 2014
Cross currency interest rate swap 2 [Member]
USD ($)
Sep. 30, 2014
Cross currency interest rate swap 2 [Member]
EUR (€)
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Bonds and notes payable
$ 28,737,456 
 
$ 28,737,456 
 
$ 25,955,289 
 
 
 
 
€ 420,500 
 
€ 352,700 
Derivative, Notional Amount
 
 
 
 
 
 
 
 
 
 
450,000 
352,700 
Re-measurement of Euro Notes
37,418 
(39,974)
39,216 
(25,902)
 
37,418 
(39,974)1
39,216 
(25,902)1
 
 
 
Change in fair value of cross currency interest rate swaps
 
 
 
 
 
(37,224)
39,074 1
(40,261)
18,978 1
 
 
 
Total impact to statements of income - income (expense)
$ (8,381)
$ 30,014 
$ (431)
$ 73,743 
 
$ 194 2
$ (900)1 2
$ (1,045)2
$ (6,924)1 2
 
 
 
Derivative Financial Instruments Fair Value of Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Derivatives, Fair Value [Line Items]
 
 
 
Fair value of derivative instruments, asset
$ 68,009 
 
$ 62,507 
Fair value of derivative instruments, liability
14,814 
 
17,969 
Proceeds to terminate and or amend derivative instruments
0 
2,700 
 
Payments to terminate and/or amend derivative instruments
0 
9,200 
 
1:3 basis swaps [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair value of derivative instruments, asset
50,965 
 
18,490 
Fair value of derivative instruments, liability
0 
 
0 
Interest rate swaps - floor income hedges [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair value of derivative instruments, asset
8,804 
 
7,183 
Fair value of derivative instruments, liability
6,297 
 
15,849 
Interest rate swap option - floor income hedges [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair value of derivative instruments, asset
8,240 
 
0 
Fair value of derivative instruments, liability
0 
 
0 
Interest rate swaps - hybrid debt hedges [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair value of derivative instruments, asset
0 
 
0 
Fair value of derivative instruments, liability
5,090 
 
2,120 
Cross-currency interest rate swaps [Member]
 
 
 
Derivatives, Fair Value [Line Items]
 
 
 
Fair value of derivative instruments, asset
0 
 
36,834 
Fair value of derivative instruments, liability
$ 3,427 
 
$ 0 
Derivative Financial Instruments Gross/Net (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Derivatives, Fair Value [Line Items]
 
 
Fair value of derivative instruments, asset
$ (68,009)
$ (62,507)
Fair value of derivative instruments, liability
(14,814)
(17,969)
Derivatives subject to enforceable master netting arrangement, asset
(11,387)
(15,437)
Derivatives subject to enforceable master netting arrangement, liability
11,387 
15,437 
Cash collateral received
0 
(15,959)
Cash collateral pledged
(22,422)
3,630 
Fair value of derivative instruments, asset, net
56,622 
31,111 
Fair value of derivative instruments, liability, net
$ 25,849 
$ (1,098)
Derivative Financial Instruments Income Statement Effect of Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
$ (4,834)
$ (6,688)
$ (17,277)
$ (23,229)
Change in fair value
(8,381)
30,014 
(431)
73,743 
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
37,418 
(39,974)
39,216 
(25,902)
Derivative market value and foreign currency adjustments and derivative settlements - income (expense)
24,203 
(16,648)
21,508 
24,612 
1:3 basis swaps [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
808 
781 
2,547 
2,474 
Change in fair value
19,455 
(2,161)
32,475 
9,402 
Interest rate swaps - floor income hedges [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(5,421)
(7,178)
(19,345)
(24,017)
Change in fair value
10,628 
(9,599)
11,173 
33,231 
Interest rate swap option - floor income hedges [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Change in fair value
(847)
0 
(847)
0 
Interest rate swaps - hybrid debt hedges [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(259)
(256)
(767)
(1,413)
Change in fair value
(393)
2,700 
(2,971)
11,790 
Cross-currency interest rate swaps [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
38 
(35)
288 
(273)
Change in fair value
(37,224)
39,074 
(40,261)
18,978 
Other [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Change in fair value
$ 0 
$ 0 
$ 0 
$ 342 
Investments and Restricted Investments Summary (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Investments, Fair Value Disclosure
$ 147,780 
$ 192,040 
Investments [Member] |
Available-for-sale investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
125,376 
173,433 
Gross unrealized gains
8,268 
8,894 
Gross unrealized losses
(174)1
(1,244)
Investments, Fair Value Disclosure
133,470 
181,083 
Investments [Member] |
Available-for-sale investments [Member] |
Student Loan Asset-Backed and Other Debt Securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
123,898 2
171,931 2
Gross unrealized gains
6,309 2
7,111 2
Gross unrealized losses
(153)1 2
(1,241)2
Investments, Fair Value Disclosure
130,054 2
177,801 2
Investments [Member] |
Available-for-sale investments [Member] |
Equity securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
1,478 
1,502 
Gross unrealized gains
1,959 
1,783 
Gross unrealized losses
(21)1
(3)
Investments, Fair Value Disclosure
3,416 
3,282 
Investments [Member] |
Trading investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Investments, Fair Value Disclosure
14,310 
10,957 
Investments [Member] |
Trading investments [Member] |
Student Loan Asset-Backed and Other Debt Securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Investments, Fair Value Disclosure
5,370 
10,957 
Investments [Member] |
Trading investments [Member] |
Equity securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Investments, Fair Value Disclosure
8,940 
0 
Estimate of Fair Value Measurement [Member]
 
 
Investment Holdings [Line Items]
 
 
Guaranteed investment contracts - held-to-maturity
$ 8,205 3
$ 7,285 3
Investments Realized Gains (Losses) on Available-for-Sale Securities (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Gain (Loss) on Investments [Line Items]
 
 
 
 
Other income
$ 8 
$ 730 
$ 8,319 
$ 2,246 
Available-for-sale Securities [Member]
 
 
 
 
Gain (Loss) on Investments [Line Items]
 
 
 
 
Other income
8 
730 
(8,319)
2,246 
Income tax expense
(3)
(270)
(3,078)
(831)
Net
$ 5 
$ 460 
$ 5,241 
$ 1,415 
Business Combination (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Jun. 3, 2014
RenWeb Acquisition [Member]
Business Acquisition [Line Items]
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents
 
 
$ 326 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables
 
 
961 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment
 
 
105 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets
 
 
22 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill
 
 
37,188 
Goodwill
126,200 
117,118 
9,082 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other
 
 
(1,341)
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net
 
 
$ 46,343 
Business Combination Acquisition Details (Details) (RenWeb Acquisition [Member], USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2014
Jun. 3, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill
 
 
$ 37,188,000 
Business Acquisition, Percentage of Voting Interests Acquired
 
 
100.00% 
Business Combination, Consideration Transferred
 
44,000,000 
 
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, Low
0 
0 
 
Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High
4,000,000 
4,000,000 
 
Business Combination, Contingent Consideration, Liability
 
 
2,300,000 
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life
18 years 
 
 
Business Acquisition, Goodwill, Expected Tax Deductible Amount
9,100,000 
9,100,000 
 
Customer Relationships [Member]
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life
20 years 
 
 
Finite-lived Intangible Assets Acquired
25,500,000 
 
 
Trade Names [Member]
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life
20 years 
 
 
Finite-lived Intangible Assets Acquired
6,400,000 
 
 
Computer Software, Intangible Asset [Member]
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life
5 years 
 
 
Finite-lived Intangible Assets Acquired
4,900,000 
 
 
Covenants not to compete [Member]
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life
10 years 
 
 
Finite-lived Intangible Assets Acquired
$ 400,000 
 
 
Intangible Assets Intangible Assets (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Asset, Useful Life (months)
181 months 
 
Finite-Lived Intangible Assets, Net
$ 42,876 
$ 6,132 
Customer Relationships [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Accumulated Amortization
22,866 
19,821 
Finite-Lived Intangible Asset, Useful Life (months)
207 months 
 
Finite-Lived Intangible Assets, Net
28,612 
6,132 
Computer Software, Intangible Asset [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Accumulated Amortization
1,210 
0 
Finite-Lived Intangible Asset, Useful Life (months)
44 months 
 
Finite-Lived Intangible Assets, Net
7,656 
0 
Trade Names [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Accumulated Amortization
156 
0 
Finite-Lived Intangible Asset, Useful Life (months)
236 months 
 
Finite-Lived Intangible Assets, Net
6,266 
0 
Covenants not to compete [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Finite-Lived Intangible Assets, Accumulated Amortization
12 
0 
Finite-Lived Intangible Asset, Useful Life (months)
116 months 
 
Finite-Lived Intangible Assets, Net
$ 342 
$ 0 
Intangible Assets Amortization Expense (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
 
 
 
 
 
Amortization of Intangible Assets
$ 2,000,000 
$ 800,000 
$ 4,400,000 
$ 2,500,000 
 
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year
1,984,000 
 
1,984,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Year Two
8,695,000 
 
8,695,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Year Three
5,349,000 
 
5,349,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Year Four
3,862,000 
 
3,862,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Year Five
3,533,000 
 
3,533,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, after Year Five
19,453,000 
 
19,453,000 
 
 
Amortization of Intangible Assets
$ 42,876,000 
 
$ 42,876,000 
 
$ 6,132,000 
Goodwill Goodwill (Details) (USD $)
9 Months Ended
Sep. 30, 2014
Goodwill [Line Items]
 
Goodwill, Period Start
$ 117,118,000 
Goodwill, Acquired During Period
9,082,000 
Goodwill, Period End
126,200,000 
Student Loan and Guaranty Servicing [Member]
 
Goodwill [Line Items]
 
Goodwill, Period Start
8,596,000 
Goodwill, Acquired During Period
0 
Goodwill, Period End
8,596,000 
Tuition Payment Processing and Campus Commerce [Member]
 
Goodwill [Line Items]
 
Goodwill, Period Start
58,086,000 
Goodwill, Acquired During Period
9,082,000 
Goodwill, Period End
67,168,000 
Enrollment Services [Member]
 
Goodwill [Line Items]
 
Goodwill, Period Start
8,553,000 
Goodwill, Acquired During Period
0 
Goodwill, Period End
8,553,000 
Asset Generation and Management [Member]
 
Goodwill [Line Items]
 
Goodwill, Period Start
41,883,000 
Goodwill, Acquired During Period
0 
Goodwill, Period End
$ 41,883,000 
Earnings per Common Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
0 
0 
0 
0 
Net income attributable to Nelnet, Inc.
$ 85,219 
$ 62,830 
$ 233,999 
$ 232,152 
Weighted average common shares outstanding - basic and diluted
46,432,680 
46,496,612 
46,496,309 
46,593,241 
Earnings per share - basic and diluted
$ 1.84 
$ 1.35 
$ 5.03 
$ 4.98 
Common shareholders [Member]
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Net income attributable to Nelnet, Inc.
84,330 
62,277 
231,725 
230,141 
Weighted average common shares outstanding - basic and diluted
45,948,255 
46,086,743 
46,044,429 
46,189,200 
Earnings per share - basic and diluted
$ 1.84 
$ 1.35 
$ 5.03 
$ 4.98 
Unvested restricted stock shareholders [Member]
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Net income attributable to Nelnet, Inc.
$ 889 
$ 553 
$ 2,274 
$ 2,011 
Weighted average common shares outstanding - basic and diluted
484,425 
409,869 
451,880 
404,041 
Earnings per share - basic and diluted
$ 1.84 
$ 1.35 
$ 5.03 
$ 4.98 
Segment Reporting (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
$ 189,424 
$ 160,237 
$ 525,247 
$ 476,939 
Interest expense
71,937 
55,315 
201,176 
171,800 
Net interest income
117,487 
104,922 
324,071 
305,139 
Less provision for loan losses
(2,000)
(5,000)
(6,000)
(15,000)
Net interest income after provision for loan losses
115,487 
99,922 
318,071 
290,139 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
52,659 
64,582 
183,876 
180,261 
Intersegment servicing revenue
0 
0 
0 
0 
Tuition payment processing and campus commerce revenue
26,399 
19,927 
73,468 
61,694 
Enrollment services revenue
22,936 
22,563 
65,092 
76,343 
Other income
7,650 
8,613 
41,096 
30,317 
Gain on sale of loans and debt repurchases
0 
2,138 
57 
10,900 
Derivative market value and foreign currency adjustments, net
29,037 
(9,960)
38,785 
47,841 
Derivative settlements, net
(4,834)
(6,688)
(17,277)
(23,229)
Total other income (expense)
133,847 
101,175 
385,097 
384,127 
Operating expenses:
 
 
 
 
Salaries and benefits
61,098 
48,712 
167,470 
144,049 
Cost of Services
14,178 
14,668 
41,964 
51,097 
Depreciation and amortization
5,493 
4,340 
15,490 
13,037 
Other
36,676 
39,887 
112,680 
109,193 
Intersegment expenses, net
0 
0 
0 
0 
Total operating expenses
117,445 
107,607 
337,604 
317,376 
Income (loss) before income taxes and corporate overhead allocation
131,889 
93,490 
365,564 
356,890 
Corporate overhead allocation
0 
0 
0 
0 
Income (loss) before income taxes
131,889 
93,490 
365,564 
356,890 
Income tax (expense) benefit
(46,513)
(30,444)
(130,202)
(123,637)
Net income (loss)
85,376 
63,046 
235,362 
233,253 
Net income attributable to noncontrolling interest
157 
216 
1,363 
1,101 
Net income (loss) attributable to Nelnet, Inc.
85,219 
62,830 
233,999 
232,152 
Student Loan and Guaranty Servicing [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
5 
10 
25 
29 
Interest expense
0 
0 
0 
0 
Net interest income
5 
10 
25 
29 
Less provision for loan losses
0 
0 
0 
0 
Net interest income after provision for loan losses
5 
10 
25 
29 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
52,659 
64,582 
183,876 
180,261 
Intersegment servicing revenue
13,432 
13,519 
41,453 
42,375 
Tuition payment processing and campus commerce revenue
0 
0 
0 
0 
Enrollment services revenue
0 
0 
0 
0 
Other income
0 
0 
0 
0 
Gain on sale of loans and debt repurchases
0 
0 
0 
0 
Derivative market value and foreign currency adjustments, net
0 
0 
0 
0 
Derivative settlements, net
0 
0 
0 
0 
Total other income (expense)
66,091 
78,101 
225,329 
222,636 
Operating expenses:
 
 
 
 
Salaries and benefits
37,062 
29,719 
102,462 
86,254 
Cost of Services
0 
0 
0 
0 
Depreciation and amortization
2,558 
2,677 
8,166 
8,197 
Other
15,028 
19,752 
53,295 
56,173 
Intersegment expenses, net
906 
1,457 
3,113 
3,243 
Total operating expenses
55,554 
53,605 
167,036 
153,867 
Income (loss) before income taxes and corporate overhead allocation
10,542 
24,506 
58,318 
68,798 
Corporate overhead allocation
(2,567)
(1,822)
(6,487)
(4,332)
Income (loss) before income taxes
7,975 
22,684 
51,831 
64,466 
Income tax (expense) benefit
(3,030)
(8,620)
(19,695)
(24,498)
Net income (loss)
4,945 
14,064 
32,136 
39,968 
Net income attributable to noncontrolling interest
0 
0 
0 
0 
Net income (loss) attributable to Nelnet, Inc.
4,945 
14,064 
32,136 
39,968 
Tuition Payment Processing and Campus Commerce [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
2 
0 
5 
0 
Interest expense
0 
0 
0 
0 
Net interest income
2 
0 
5 
0 
Less provision for loan losses
0 
0 
0 
0 
Net interest income after provision for loan losses
2 
0 
5 
0 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
0 
0 
0 
0 
Intersegment servicing revenue
0 
0 
0 
0 
Tuition payment processing and campus commerce revenue
26,399 
19,927 
73,468 
61,694 
Enrollment services revenue
0 
0 
0 
0 
Other income
0 
0 
0 
0 
Gain on sale of loans and debt repurchases
0 
0 
0 
0 
Derivative market value and foreign currency adjustments, net
0 
0 
0 
0 
Derivative settlements, net
0 
0 
0 
0 
Total other income (expense)
26,399 
19,927 
73,468 
61,694 
Operating expenses:
 
 
 
 
Salaries and benefits
13,288 
9,229 
34,427 
28,015 
Cost of Services
0 
0 
0 
0 
Depreciation and amortization
2,396 
1,117 
5,669 
3,387 
Other
3,312 
1,908 
8,915 
6,387 
Intersegment expenses, net
1,481 
1,431 
4,305 
4,350 
Total operating expenses
20,477 
13,685 
53,316 
42,139 
Income (loss) before income taxes and corporate overhead allocation
5,924 
6,242 
20,157 
19,555 
Corporate overhead allocation
(856)
(607)
(2,163)
(1,443)
Income (loss) before income taxes
5,068 
5,635 
17,994 
18,112 
Income tax (expense) benefit
(1,926)
(2,141)
(6,837)
(6,882)
Net income (loss)
3,142 
3,494 
11,157 
11,230 
Net income attributable to noncontrolling interest
0 
0 
0 
0 
Net income (loss) attributable to Nelnet, Inc.
3,142 
3,494 
11,157 
11,230 
Enrollment Services [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
0 
0 
0 
0 
Interest expense
0 
0 
0 
0 
Net interest income
0 
0 
0 
0 
Less provision for loan losses
0 
0 
0 
0 
Net interest income after provision for loan losses
0 
0 
0 
0 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
0 
0 
0 
0 
Intersegment servicing revenue
0 
0 
0 
0 
Tuition payment processing and campus commerce revenue
0 
0 
0 
0 
Enrollment services revenue
22,936 
22,563 
65,092 
76,343 
Other income
0 
0 
0 
0 
Gain on sale of loans and debt repurchases
0 
0 
0 
0 
Derivative market value and foreign currency adjustments, net
0 
0 
0 
0 
Derivative settlements, net
0 
0 
0 
0 
Total other income (expense)
22,936 
22,563 
65,092 
76,343 
Operating expenses:
 
 
 
 
Salaries and benefits
4,474 
4,491 
12,986 
15,067 
Cost of Services
14,178 
14,668 
41,964 
51,097 
Depreciation and amortization
41 
57 
129 
179 
Other
1,624 
1,556 
4,917 
4,450 
Intersegment expenses, net
761 
1,139 
2,711 
3,418 
Total operating expenses
21,078 
21,911 
62,707 
74,211 
Income (loss) before income taxes and corporate overhead allocation
1,858 
652 
2,385 
2,132 
Corporate overhead allocation
(855)
(607)
(2,162)
(1,443)
Income (loss) before income taxes
1,003 
45 
223 
689 
Income tax (expense) benefit
(381)
(17)
(85)
(261)
Net income (loss)
622 
28 
138 
428 
Net income attributable to noncontrolling interest
0 
0 
0 
0 
Net income (loss) attributable to Nelnet, Inc.
622 
28 
138 
428 
Total Fee-Based [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
7 
10 
30 
29 
Interest expense
0 
0 
0 
0 
Net interest income
7 
10 
30 
29 
Less provision for loan losses
0 
0 
0 
0 
Net interest income after provision for loan losses
7 
10 
30 
29 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
52,659 
64,582 
183,876 
180,261 
Intersegment servicing revenue
13,432 
13,519 
41,453 
42,375 
Tuition payment processing and campus commerce revenue
26,399 
19,927 
73,468 
61,694 
Enrollment services revenue
22,936 
22,563 
65,092 
76,343 
Other income
0 
0 
0 
0 
Gain on sale of loans and debt repurchases
0 
0 
0 
0 
Derivative market value and foreign currency adjustments, net
0 
0 
0 
0 
Derivative settlements, net
0 
0 
0 
0 
Total other income (expense)
115,426 
120,591 
363,889 
360,673 
Operating expenses:
 
 
 
 
Salaries and benefits
54,824 
43,439 
149,875 
129,336 
Cost of Services
14,178 
14,668 
41,964 
51,097 
Depreciation and amortization
4,995 
3,851 
13,964 
11,763 
Other
19,964 
23,216 
67,127 
67,010 
Intersegment expenses, net
3,148 
4,027 
10,129 
11,011 
Total operating expenses
97,109 
89,201 
283,059 
270,217 
Income (loss) before income taxes and corporate overhead allocation
18,324 
31,400 
80,860 
90,485 
Corporate overhead allocation
(4,278)
(3,036)
(10,812)
(7,218)
Income (loss) before income taxes
14,046 
28,364 
70,048 
83,267 
Income tax (expense) benefit
(5,337)
(10,778)
(26,617)
(31,641)
Net income (loss)
8,709 
17,586 
43,431 
51,626 
Net income attributable to noncontrolling interest
0 
0 
0 
0 
Net income (loss) attributable to Nelnet, Inc.
8,709 
17,586 
43,431 
51,626 
Asset Generation and Management [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
187,949 
158,793 
520,514 
472,622 
Interest expense
71,037 
56,100 
198,449 
170,502 
Net interest income
116,912 
102,693 
322,065 
302,120 
Less provision for loan losses
(2,000)
(5,000)
(6,000)
(15,000)
Net interest income after provision for loan losses
114,912 
97,693 
316,065 
287,120 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
0 
0 
0 
0 
Intersegment servicing revenue
0 
0 
0 
0 
Tuition payment processing and campus commerce revenue
0 
0 
0 
0 
Enrollment services revenue
0 
0 
0 
0 
Other income
4,294 
3,981 
12,954 
11,207 
Gain on sale of loans and debt repurchases
0 
2,138 
57 
10,900 
Derivative market value and foreign currency adjustments, net
29,430 
(12,660)
41,755 
35,711 
Derivative settlements, net
(4,575)
(6,432)
(16,510)
(21,816)
Total other income (expense)
29,149 
(12,973)
38,256 
36,002 
Operating expenses:
 
 
 
 
Salaries and benefits
565 
555 
1,744 
1,709 
Cost of Services
0 
0 
0 
0 
Depreciation and amortization
0 
0 
0 
0 
Other
8,636 
7,939 
24,627 
23,375 
Intersegment expenses, net
13,611 
13,705 
41,950 
42,955 
Total operating expenses
22,812 
22,199 
68,321 
68,039 
Income (loss) before income taxes and corporate overhead allocation
121,249 
62,521 
286,000 
255,083 
Corporate overhead allocation
(1,026)
(1,302)
(3,604)
(3,095)
Income (loss) before income taxes
120,223 
61,219 
282,396 
251,988 
Income tax (expense) benefit
(45,684)
(23,263)
(107,309)
(95,755)
Net income (loss)
74,539 
37,956 
175,087 
156,233 
Net income attributable to noncontrolling interest
0 
0 
0 
0 
Net income (loss) attributable to Nelnet, Inc.
74,539 
37,956 
175,087 
156,233 
Corporate and Other [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
1,814 
2,201 
6,508 
6,708 
Interest expense
1,246 
(18)
4,532 
3,718 
Net interest income
568 
2,219 
1,976 
2,990 
Less provision for loan losses
0 
0 
0 
0 
Net interest income after provision for loan losses
568 
2,219 
1,976 
2,990 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
0 
0 
0 
0 
Intersegment servicing revenue
0 
0 
0 
0 
Tuition payment processing and campus commerce revenue
0 
0 
0 
0 
Enrollment services revenue
0 
0 
0 
0 
Other income
3,356 
4,632 
28,142 
19,110 
Gain on sale of loans and debt repurchases
0 
0 
0 
0 
Derivative market value and foreign currency adjustments, net
(393)
2,700 
(2,970)
12,130 
Derivative settlements, net
(259)
(256)
(767)
(1,413)
Total other income (expense)
2,704 
7,076 
24,405 
29,827 
Operating expenses:
 
 
 
 
Salaries and benefits
5,709 
4,718 
15,851 
13,004 
Cost of Services
0 
0 
0 
0 
Depreciation and amortization
498 
489 
1,526 
1,274 
Other
8,076 
8,732 
20,926 
18,808 
Intersegment expenses, net
(3,327)
(4,213)
(10,626)
(11,591)
Total operating expenses
10,956 
9,726 
27,677 
21,495 
Income (loss) before income taxes and corporate overhead allocation
(7,684)
(431)
(1,296)
11,322 
Corporate overhead allocation
5,304 
4,338 
14,416 
10,313 
Income (loss) before income taxes
(2,380)
3,907 
13,120 
21,635 
Income tax (expense) benefit
4,508 
3,597 
3,724 
3,759 
Net income (loss)
2,128 
7,504 
16,844 
25,394 
Net income attributable to noncontrolling interest
157 
216 
1,363 
1,101 
Net income (loss) attributable to Nelnet, Inc.
1,971 
7,288 
15,481 
24,293 
Intersegment Eliminations [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total interest income
(346)
(767)
(1,805)
(2,420)
Interest expense
(346)
(767)
(1,805)
(2,420)
Net interest income
0 
0 
0 
0 
Less provision for loan losses
0 
0 
0 
0 
Net interest income after provision for loan losses
0 
0 
0 
0 
Other income (expense):
 
 
 
 
Loan and guaranty servicing revenue
0 
0 
0 
0 
Intersegment servicing revenue
(13,432)
(13,519)
(41,453)
(42,375)
Tuition payment processing and campus commerce revenue
0 
0 
0 
0 
Enrollment services revenue
0 
0 
0 
0 
Other income
0 
0 
0 
0 
Gain on sale of loans and debt repurchases
0 
0 
0 
0 
Derivative market value and foreign currency adjustments, net
0 
0 
0 
0 
Derivative settlements, net
0 
0 
0 
0 
Total other income (expense)
(13,432)
(13,519)
(41,453)
(42,375)
Operating expenses:
 
 
 
 
Salaries and benefits
0 
0 
0 
0 
Cost of Services
0 
0 
0 
0 
Depreciation and amortization
0 
0 
0 
0 
Other
0 
0 
0 
0 
Intersegment expenses, net
(13,432)
(13,519)
(41,453)
(42,375)
Total operating expenses
(13,432)
(13,519)
(41,453)
(42,375)
Income (loss) before income taxes and corporate overhead allocation
0 
0 
0 
0 
Corporate overhead allocation
0 
0 
0 
0 
Income (loss) before income taxes
0 
0 
0 
0 
Income tax (expense) benefit
0 
0 
0 
0 
Net income (loss)
0 
0 
0 
0 
Net income attributable to noncontrolling interest
0 
0 
0 
0 
Net income (loss) attributable to Nelnet, Inc.
$ 0 
$ 0 
$ 0 
$ 0 
Major Customer (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Concentration Risk [Line Items]
 
 
 
 
Concentration Risk, Customer
Department of Education 
Department of Education 
Department of Education 
Department of Education 
Concentration Risk Dollar Value [Member]
 
 
 
 
Concentration Risk [Line Items]
 
 
 
 
Loan and guaranty servicing revenue
$ 31.2 
$ 26.0 
$ 92.1 
$ 68.4 
Related Party Transactions Transactions with Union Bank and Trust (Details) (Union Bank and Trust Company [Member], USD $)
Sep. 30, 2014
BasisPoints
Union Bank and Trust Company [Member]
 
Related Party Transaction [Line Items]
 
Amount of Participation
$ 2,200,000.0 
Contractual Obligation
$ 900,000 
basis points earned on outstanding balance
40 
Assets and Liabilities that are Measured at Fair Value (Details) (Fair Value, Measurements, Recurring [Member], USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Assets, Fair Value Disclosure [Abstract]
 
 
Investments
$ 147,780 
$ 192,040 
Fair value of derivative instruments
68,009 
62,507 
Total assets
215,789 
254,547 
Liabilities, Fair Value Disclosure [Abstract]
 
 
Fair value of derivative instruments
14,814 
17,969 
Total liabilities
14,814 
17,969 
Student loan asset-backed securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments
143,955 
188,279 
Equity securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
3,416 
3,282 
Debt securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
409 
479 
Level 1 [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments
3,825 
3,761 
Fair value of derivative instruments
0 
0 
Total assets
3,825 
3,761 
Liabilities, Fair Value Disclosure [Abstract]
 
 
Fair value of derivative instruments
0 
0 
Total liabilities
0 
0 
Level 1 [Member] |
Student loan asset-backed securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments
0 
0 
Level 1 [Member] |
Equity securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
3,416 
3,282 
Level 1 [Member] |
Debt securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
409 
479 
Level 2 [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments
143,955 
188,279 
Fair value of derivative instruments
68,009 
62,507 
Total assets
211,964 
250,786 
Liabilities, Fair Value Disclosure [Abstract]
 
 
Fair value of derivative instruments
14,814 
17,969 
Total liabilities
14,814 
17,969 
Level 2 [Member] |
Student loan asset-backed securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments
143,955 
188,279 
Level 2 [Member] |
Equity securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
0 
0 
Level 2 [Member] |
Debt securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
$ 0 
$ 0 
Fair Value of Financial Instruments (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Dec. 31, 2012
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
$ 28,701,344 
$ 25,907,589 
 
 
Cash and cash equivalents
74,579 
63,267 
51,391 
66,031 
Investments
147,780 
192,040 
 
 
Restricted cash - due to customers
72,836 
167,576 
 
 
Accrued interest receivable
352,205 
314,553 
 
 
Derivative instruments
68,009 
62,507 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
28,737,456 
25,955,289 
 
 
Accrued interest payable
25,221 
21,725 
 
 
Due to customers
72,836 
167,576 
 
 
Derivative instruments
14,814 
17,969 
 
 
Fair value [Member]
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
29,975,188 
26,641,383 
 
 
Cash and cash equivalents
74,579 
63,267 
 
 
Investments
147,780 
192,040 
 
 
Restricted cash
859,302 
727,838 
 
 
Restricted cash - due to customers
72,836 
167,576 
 
 
Restricted investments
8,205 
7,285 
 
 
Accrued interest receivable
352,205 
314,553 
 
 
Derivative instruments
68,009 
62,507 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
28,738,353 
25,577,250 
 
 
Accrued interest payable
25,221 
21,725 
 
 
Due to customers
72,836 
167,576 
 
 
Derivative instruments
14,814 
17,969 
 
 
Fair value [Member] |
Level 1 [Member]
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
0 
0 
 
 
Cash and cash equivalents
74,579 
63,267 
 
 
Investments
3,825 
3,761 
 
 
Restricted cash
859,302 
727,838 
 
 
Restricted cash - due to customers
72,836 
167,576 
 
 
Restricted investments
8,205 
7,285 
 
 
Accrued interest receivable
0 
0 
 
 
Derivative instruments
0 
0 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
0 
0 
 
 
Accrued interest payable
0 
0 
 
 
Due to customers
72,836 
167,576 
 
 
Derivative instruments
0 
0 
 
 
Fair value [Member] |
Level 2 [Member]
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
0 
0 
 
 
Cash and cash equivalents
0 
0 
 
 
Investments
143,955 
188,279 
 
 
Restricted cash
0 
0 
 
 
Restricted cash - due to customers
0 
0 
 
 
Restricted investments
0 
0 
 
 
Accrued interest receivable
352,205 
314,553 
 
 
Derivative instruments
68,009 
62,507 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
28,738,353 
25,577,250 
 
 
Accrued interest payable
25,221 
21,725 
 
 
Due to customers
0 
0 
 
 
Derivative instruments
14,814 
17,969 
 
 
Fair value [Member] |
Level 3 [Member]
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
29,975,188 
26,641,383 
 
 
Cash and cash equivalents
0 
0 
 
 
Investments
0 
0 
 
 
Restricted cash
0 
0 
 
 
Restricted cash - due to customers
0 
0 
 
 
Restricted investments
0 
0 
 
 
Accrued interest receivable
0 
0 
 
 
Derivative instruments
0 
0 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
0 
0 
 
 
Accrued interest payable
0 
0 
 
 
Due to customers
0 
0 
 
 
Derivative instruments
0 
0 
 
 
Carrying value [Member]
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
28,701,344 
25,907,589 
 
 
Cash and cash equivalents
74,579 
63,267 
 
 
Investments
147,780 
192,040 
 
 
Restricted cash
859,302 
727,838 
 
 
Restricted cash - due to customers
72,836 
167,576 
 
 
Restricted investments
8,205 
7,285 
 
 
Accrued interest receivable
352,205 
314,553 
 
 
Derivative instruments
68,009 
62,507 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
28,737,456 
25,955,289 
 
 
Accrued interest payable
25,221 
21,725 
 
 
Due to customers
72,836 
167,576 
 
 
Derivative instruments
$ 14,814 
$ 17,969 
 
 
Legal Proceedings (Details) (Pending or Threatened Litigation [Member], USD $)
9 Months Ended
Sep. 30, 2014
Loss Contingencies [Line Items]
 
Loss contingency, inestimable loss
The Company has accrued an immaterial amount related to the legal proceedings described below. However, due to the uncertainty and risks inherent in class determination and the overall litigation process, the Company believes that a meaningful estimate of its exposure to any reasonably possible losses or range of reasonably possible losses, in excess of the amount accrued, cannot currently be made. 
Bais Yaakov of Spring Valley v. Peterson's Nelnet, LLC [Member]
 
Loss Contingencies [Line Items]
 
Loss contingency, actions taken by court, arbitrator or mediator
As of the filing date of this report, the New Jersey District Court has not established, recognized, or certified a class.  
Bais Yaakov of Spring Valley v. Peterson's Nelnet, LLC [Member] |
Named plaintiff [Member]
 
Loss Contingencies [Line Items]
 
Advertising faxes
6 
Loss Contingency, Damages Sought, Value, Per Violation
$ 500 
Bais Yaakov of Spring Valley v. Peterson's Nelnet, LLC [Member] |
Class action members [Member]
 
Loss Contingencies [Line Items]
 
Advertising faxes
10,000 
Loss contingency, damages sought, value
5,000,000 
Loss contingency, damages sought, value if trebled
15,000,000 
Than Zaw v. Nelnet, Inc. [Member]
 
Loss Contingencies [Line Items]
 
Loss contingency, actions taken by court, arbitrator or mediator
As of the filing date of this report, the California District Court has not established, recognized, or certified a class.  
Than Zaw v. Nelnet, Inc. [Member] |
Named plaintiff [Member]
 
Loss Contingencies [Line Items]
 
Loss Contingency, Damages Sought, Value, Per Violation
5,000 
Grant Keating v. Peterson's Nelnet, LLC et al [Member]
 
Loss Contingencies [Line Items]
 
Loss contingency, actions taken by court, arbitrator or mediator
As of the filing date of this report, the Ohio District Court has not established, recognized, or certified a class. 
Grant Keating v. Peterson's Nelnet, LLC et al [Member] |
Named plaintiff [Member]
 
Loss Contingencies [Line Items]
 
Loss Contingency, Damages Sought, Value, Per Violation
$ 500