NELNET INC, 10-Q filed on 11/8/2021
Quarterly Report
v3.21.2
Cover Page - shares
9 Months Ended
Sep. 30, 2021
Oct. 31, 2021
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Sep. 30, 2021  
Document Transition Report false  
Entity File Number 001-31924  
Entity Registrant Name NELNET, INC.  
Entity Incorporation, State or Country Code NE  
Entity Tax Identification Number 84-0748903  
Entity Address, Address Line One 121 South 13th Street, Suite 100  
Entity Address, City or Town Lincoln,  
Entity Address, State or Province NE  
Entity Address, Postal Zip Code 68508  
City Area Code 402  
Local Phone Number 458-2370  
Title of 12(b) Security Class A Common Stock, Par Value $0.01 per Share  
Trading Symbol NNI  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Current Fiscal Year End Date --12-31  
Amendment Flag false  
Entity Central Index Key 0001258602  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q3  
Common Class A    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   27,560,397
Common Class B    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   10,681,454
v3.21.2
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Assets:    
Loans and accrued interest receivable (net of allowance for loan losses of $138,044 and $175,698, respectively) $ 19,304,203 $ 20,185,656
Cash and cash equivalents:    
Cash and cash equivalents - not held at a related party 31,966 33,292
Cash and cash equivalents - held at a related party 159,970 87,957
Total cash and cash equivalents 191,936 121,249
Investments 1,374,913 992,940
Restricted cash 764,089 553,175
Restricted cash - due to customers 295,053 283,971
Accounts receivable (net of allowance for doubtful accounts of $1,458 and $1,824, respectively) 78,508 76,460
Goodwill 142,092 142,092
Intangible assets, net 55,176 75,070
Property and equipment, net 117,296 123,527
Other assets 79,473 92,020
Total assets 22,402,739 22,646,160
Liabilities:    
Bonds and notes payable 18,610,748 19,320,726
Accrued interest payable 4,441 28,701
Bank deposits 200,651 54,633
Other liabilities 375,393 312,280
Due to customers 354,543 301,471
Total liabilities 19,545,776 20,017,811
Commitments and contingencies
Nelnet, Inc. shareholders' equity:    
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no shares issued or outstanding 0 0
Common stock:    
Additional paid-in capital 1,593 3,794
Retained earnings 2,843,799 2,621,762
Accumulated other comprehensive earnings, net 13,479 6,102
Total Nelnet, Inc. shareholders' equity 2,859,254 2,632,042
Noncontrolling interests (2,291) (3,693)
Total equity 2,856,963 2,628,349
Total liabilities and equity 22,402,739 22,646,160
Variable Interest Entity, Primary Beneficiary    
Assets:    
Loans and accrued interest receivable (net of allowance for loan losses of $138,044 and $175,698, respectively) 19,032,669 20,132,996
Cash and cash equivalents:    
Restricted cash 699,143 499,223
Liabilities:    
Bonds and notes payable 18,465,230 19,355,375
Common stock:    
Accrued interest payable and other liabilities (66,913) (83,127)
Net assets of consolidated education and other lending variable interest entities 1,199,669 1,193,717
Class A, $0.01 par value. Authorized 600,000,000 shares; issued and outstanding 27,556,370 shares and 27,193,154 shares, respectively    
Common stock:    
Common stock 276 272
Class B, convertible, $0.01 par value. Authorized 60,000,000 shares; issued and outstanding 10,681,454 shares and 11,155,571 shares, respectively    
Common stock:    
Common stock $ 107 $ 112
v3.21.2
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Allowance for loan losses $ 138,044 $ 175,698
Allowance for doubtful accounts $ 1,458 $ 1,824
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, authorized shares (in shares) 50,000,000 50,000,000
Preferred stock, issued shares (in shares) 0 0
Preferred stock, outstanding shares (in shares) 0 0
Common Class A    
Par value (in dollars per share) $ 0.01 $ 0.01
Shares authorized (in shares) 600,000,000 600,000,000
Shares issued (in shares) 27,556,370 27,193,154
Shares outstanding (in shares) 27,556,370 27,193,154
Common Class B    
Par value (in dollars per share) $ 0.01 $ 0.01
Shares authorized (in shares) 60,000,000 60,000,000
Shares issued (in shares) 10,681,454 11,155,571
Shares outstanding (in shares) 10,681,454 11,155,571
v3.21.2
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Interest income:        
Loan interest $ 124,096 $ 134,507 $ 370,219 $ 462,439
Investment interest 12,558 5,238 29,122 18,379
Total interest income 136,654 139,745 399,341 480,818
Interest expense:        
Interest on bonds and notes payable and bank deposits 50,176 58,423 127,939 277,788
Net interest income 86,478 81,322 271,402 203,030
Less provision (negative provision) for loan losses 5,827 (5,821) (10,847) 73,476
Net interest income after provision for loan losses 80,651 87,143 282,249 129,554
Other income/expense:        
Other 11,867 1,502 30,183 69,910
Gain on sale of loans 3,444 14,817 18,715 33,023
Impairment expense and provision for beneficial interests, net (14,159) 0 (12,223) (34,419)
Derivative market value adjustments and derivative settlements, net 1,351 1,049 28,868 (13,406)
Total other income/expense 200,178 225,494 658,788 667,169
Cost of services:        
Cost of services 31,335 31,157 80,063 80,664
Operating expenses:        
Salaries and benefits 128,592 126,096 363,351 365,220
Depreciation and amortization 15,710 30,308 56,129 87,349
Other expenses 38,324 34,744 107,611 115,184
Total operating expenses 182,626 191,148 527,091 567,753
Income before income taxes 66,868 90,332 333,883 148,306
Income tax expense 15,649 19,156 76,747 30,286
Net income 51,219 71,176 257,136 118,020
Net loss (income) attributable to noncontrolling interests 1,919 327 3,467 (568)
Net income attributable to Nelnet, Inc. $ 53,138 $ 71,503 $ 260,603 $ 117,452
Earnings per common share:        
Net income attributable to Nelnet, Inc. shareholders - basic (in dollars per share) $ 1.38 $ 1.86 $ 6.74 $ 2.99
Net income attributable to Nelnet, Inc. shareholders - diluted (in dollars per share) $ 1.38 $ 1.86 $ 6.74 $ 2.99
Weighted-average common shares outstanding - basic (in shares) 38,595,721 38,538,476 38,646,892 39,229,932
Weighted-average common shares outstanding - diluted (in shares) 38,595,721 38,538,476 38,646,892 39,229,932
Loan servicing and systems        
Other income/expense:        
Revenue $ 112,351 $ 113,794 $ 335,961 $ 337,571
Education technology, services, and payment processing        
Other income/expense:        
Revenue 85,324 74,121 257,284 217,100
Cost of services:        
Cost of services 31,335 25,243 80,063 63,424
Communications services        
Other income/expense:        
Revenue 0 20,211 0 57,390
Cost of services:        
Cost of services $ 0 $ 5,914 $ 0 $ 17,240
v3.21.2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Statement of Comprehensive Income [Abstract]        
Net income $ 51,219 $ 71,176 $ 257,136 $ 118,020
Other comprehensive income:        
Net changes related to foreign currency translation adjustments (9) 0 (9) 0
Net changes related to available-for-sale debt securities:        
Unrealized gains during period, net 4,524 1,893 11,770 2,114
Reclassification of gains to net income, net (1,173) (513) (2,052) (390)
Income tax effect (804) (329) (2,332) (412)
Unrealized gains (losses) during period after reclassifications and tax 2,547 1,051 7,386 1,312
Other comprehensive income 2,538 1,051 7,377 1,312
Comprehensive income 53,757 72,227 264,513 119,332
Comprehensive loss (income) attributable to noncontrolling interests 1,919 327 3,467 (568)
Comprehensive income attributable to Nelnet, Inc. $ 55,676 $ 72,554 $ 267,980 $ 118,764
v3.21.2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)
$ in Thousands
Total
Cumulative Effect, Period Of Adoption, Adjustment
Preferred stock
Common stock
Common Class A
Common stock
Common Class B
Additional paid-in capital
 Retained earnings
 Retained earnings
Cumulative Effect, Period Of Adoption, Adjustment
Accumulated other comprehensive earnings, net
Noncontrolling interests
Beginning balance (in shares) at Dec. 31, 2019     0 28,458,495 11,271,609          
Beginning balance at Dec. 31, 2019 $ 2,391,094 $ (18,867) $ 0 $ 285 $ 113 $ 5,715 $ 2,377,627 $ (18,867) $ 2,972 $ 4,382
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Issuance of noncontrolling interests 66                 66
Net income (loss) 118,020           117,452     568
Other comprehensive income (loss) 1,312               1,312  
Distribution to noncontrolling interests (920)                 (920)
Cash dividend on Class A and Class B common stock (23,343)           (23,343)      
Issuance of common stock, net of forfeitures (in shares)       196,407            
Issuance of common stock, net of forfeitures 5,155     $ 2   5,153        
Compensation expense for stock based awards 5,459         5,459        
Repurchase of common stock (in shares)       (1,591,314)            
Repurchase of common stock (73,145)     $ (16)   (14,623) (58,506)      
Conversion of common stock (in shares)       100,000 (100,000)          
Conversion of common stock 0     $ 1 $ (1)          
Acquisition of noncontrolling interest (2,000)           (1,250)     (750)
Ending balance (in shares) at Sep. 30, 2020     0 27,163,588 11,171,609          
Ending balance at Sep. 30, 2020 2,402,831   $ 0 $ 272 $ 112 1,704 2,393,113   4,284 3,346
Beginning balance (in shares) at Jun. 30, 2020     0 27,232,836 11,171,609          
Beginning balance at Jun. 30, 2020 2,340,786   $ 0 $ 272 $ 112 1,867 2,331,312   3,233 3,990
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Issuance of noncontrolling interests 14                 14
Net income (loss) 71,176           71,503     (327)
Other comprehensive income (loss) 1,051               1,051  
Distribution to noncontrolling interests (331)                 (331)
Cash dividend on Class A and Class B common stock (7,664)           (7,664)      
Issuance of common stock, net of forfeitures (in shares)       24,132            
Issuance of common stock, net of forfeitures 553         553        
Compensation expense for stock based awards 1,864         1,864        
Repurchase of common stock (in shares)       (93,380)            
Repurchase of common stock (4,618)     $ 0   (2,580) (2,038)      
Ending balance (in shares) at Sep. 30, 2020     0 27,163,588 11,171,609          
Ending balance at Sep. 30, 2020 2,402,831   $ 0 $ 272 $ 112 1,704 2,393,113   4,284 3,346
Beginning balance (in shares) at Dec. 31, 2020     0 27,193,154 11,155,571          
Beginning balance at Dec. 31, 2020 2,628,349   $ 0 $ 272 $ 112 3,794 2,621,762   6,102 (3,693)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Issuance of noncontrolling interests 11,823                 11,823
Net income (loss) 257,136           260,603     (3,467)
Other comprehensive income (loss) 7,377               7,377  
Distribution to noncontrolling interests (6,954)                 (6,954)
Cash dividend on Class A and Class B common stock (25,319)           (25,319)      
Issuance of common stock, net of forfeitures (in shares)       261,760            
Issuance of common stock, net of forfeitures 4,409     $ 3   4,406        
Compensation expense for stock based awards 7,628         7,628        
Repurchase of common stock (in shares)       (372,661)            
Repurchase of common stock (27,486)     $ (4)   (14,235) (13,247)      
Conversion of common stock (in shares)       474,117 (474,117)          
Conversion of common stock 0     $ 5 $ (5)          
Ending balance (in shares) at Sep. 30, 2021     0 27,556,370 10,681,454          
Ending balance at Sep. 30, 2021 2,856,963   $ 0 $ 276 $ 107 1,593 2,843,799   13,479 (2,291)
Beginning balance (in shares) at Jun. 30, 2021     0 27,494,942 11,054,171          
Beginning balance at Jun. 30, 2021 2,828,618   $ 0 $ 275 $ 111 10,158 2,812,315   10,941 (5,182)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                    
Issuance of noncontrolling interests 4,935                 4,935
Net income (loss) 51,219           53,138     (1,919)
Other comprehensive income (loss) 2,538               2,538  
Distribution to noncontrolling interests (125)                 (125)
Cash dividend on Class A and Class B common stock (8,407)           (8,407)      
Issuance of common stock, net of forfeitures (in shares)       29,805            
Issuance of common stock, net of forfeitures 493         493        
Compensation expense for stock based awards 2,770         2,770        
Repurchase of common stock (in shares)       (341,094)            
Repurchase of common stock (25,078)     $ (3)   (11,828) (13,247)      
Conversion of common stock (in shares)       372,717 (372,717)          
Conversion of common stock 0     $ 4 $ (4)          
Ending balance (in shares) at Sep. 30, 2021     0 27,556,370 10,681,454          
Ending balance at Sep. 30, 2021 $ 2,856,963   $ 0 $ 276 $ 107 $ 1,593 $ 2,843,799   $ 13,479 $ (2,291)
v3.21.2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares
3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Common Class A        
Cash dividend on common stock (in dollars per share) $ 0.22 $ 0.2 $ 0.66 $ 0.6
Common Class B        
Cash dividend on common stock (in dollars per share) $ 0.22 $ 0.2 $ 0.66 $ 0.6
v3.21.2
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Net cash provided by operating activities:    
Net income attributable to Nelnet, Inc. $ 260,603 $ 117,452
Net (loss) income attributable to noncontrolling interests (3,467) 568
Net income 257,136 118,020
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization, including debt discounts and loan premiums and deferred origination costs 113,651 149,175
Loan discount accretion (25,048) (27,814)
(Negative provision) provision for loan losses (10,847) 73,476
Derivative market value adjustments (44,455) 21,072
Proceeds from (payments to) clearinghouse - initial and variation margin, net 41,033 (20,405)
Gain from sale of loans (18,715) (33,023)
Gain from investments, net (293) (37,766)
Loss (gain) from repurchases of debt, net 3,964 (508)
Purchases of equity securities - trading, net (41,591) 0
Deferred income tax expense (benefit) 33,078 (10,975)
Non-cash compensation expense 7,824 5,538
Provision for beneficial interests and impairment expense, net 12,223 34,419
Increase in loan and investment accrued interest receivable (41,931) (27,192)
(Increase) decrease in accounts receivable (2,137) 45,475
Decrease in other assets, net 35,381 19,491
Decrease in the carrying amount of ROU asset 5,652 9,150
Decrease in accrued interest payable (24,260) (17,673)
Increase in other liabilities, net 41,040 32,733
Decrease in the carrying amount of lease liability (5,158) (8,484)
Increase (decrease) in due to customers 53,146 (151,674)
Net cash provided by operating activities 389,693 173,035
Cash flows from investing activities:    
Purchases and originations of loans (1,145,775) (1,032,636)
Purchases of loans from a related party (21,476) (75,118)
Net proceeds from loan repayments, claims, and capitalized interest 2,010,645 2,209,797
Proceeds from sale of loans 85,906 136,126
Purchases of available-for-sale securities (521,565) (221,427)
Proceeds from sales of available-for-sale securities 104,520 97,278
Proceeds from and sale of beneficial interest in loan securitizations 30,811 34,371
Purchases of other investments (166,664) (122,584)
Proceeds from other investments 209,634 8,528
Purchases of property and equipment (42,594) (80,698)
Net cash provided by investing activities 543,442 953,637
Cash flows from financing activities:    
Payments on bonds and notes payable (2,479,582) (2,803,214)
Proceeds from issuance of bonds and notes payable 1,738,405 1,460,524
Payments of debt issuance costs (6,778) (7,144)
Increase in bank deposits, net 146,018 0
Dividends paid (25,319) (23,343)
Repurchases of common stock (27,486) (73,145)
Proceeds from issuance of common stock 1,108 1,250
Acquisition of noncontrolling interest 0 (2,000)
Issuance of noncontrolling interests 13,905 0
Distribution to noncontrolling interests (548) (660)
Net cash used in financing activities (640,277) (1,447,732)
Effect of exchange rate changes on cash (175) 0
Net increase (decrease) in cash, cash equivalents, and restricted cash 292,683 (321,060)
Cash, cash equivalents, and restricted cash, beginning of period 958,395 1,222,601
Cash, cash equivalents, and restricted cash, end of period 1,251,078 901,541
Supplemental disclosures of cash flow information:    
Cash disbursements made for interest 117,336 259,120
Cash disbursements made for income taxes, net of refunds and credits received [1] 10,921 13,413
Cash disbursements made for operating leases 6,003 9,457
Non-cash operating, investing, and financing activity:    
ROU assets obtained in exchange for lease obligations 4,026 4,158
Receipt of beneficial interest in consumer loan securitizations 23,506 52,501
Distribution to noncontrolling interests 6,406 260
Issuance of noncontrolling interests $ 2,082 $ 0
[1] The Company utilized $22.2 million and $17.0 million of federal and state tax credits related primarily to renewable energy during the nine months ended September 30, 2021 and 2020, respectively.
v3.21.2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2021
Sep. 30, 2020
Statement of Cash Flows [Abstract]    
Federal and state tax credit utilized $ 22,200 $ 17,000
Cash and cash equivalents:    
Total cash and cash equivalents 191,936 96,316
Restricted cash 764,089 519,143
Restricted cash - due to customers 295,053 286,082
Cash, cash equivalents, and restricted cash $ 1,251,078 $ 901,541
v3.21.2
Basis of Financial Reporting
9 Months Ended
Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Financial Reporting Basis of Financial ReportingThe accompanying unaudited consolidated financial statements of Nelnet, Inc. and subsidiaries (the “Company”) as of September 30, 2021 and for the three and nine months ended September 30, 2021 and 2020 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2020 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("GAAP") 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, 2021 are not necessarily indicative of the results for the year ending December 31, 2021. The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the "2020 Annual Report").
v3.21.2
Loans and Accrued Interest Receivable and Allowance for Loan Losses
9 Months Ended
Sep. 30, 2021
Receivables [Abstract]  
Loans and Accrued Interest Receivable and Allowance for Loan Losses Loans and Accrued Interest Receivable and Allowance for Loan Losses
Loans and accrued interest receivable consisted of the following:
As ofAs of
 September 30, 2021December 31, 2020
Non-Nelnet Bank:
Federally insured student loans:
Stafford and other$4,142,059 4,383,000 
Consolidation13,939,429 14,746,173 
Total18,081,488 19,129,173 
Private education loans319,212 320,589 
Consumer loans36,994 109,346 
Non-Nelnet Bank loans18,437,694 19,559,108 
Nelnet Bank:
Federally insured student loans93,930 — 
Private education loans98,395 17,543 
Nelnet Bank loans192,325 17,543 
 
Accrued interest receivable834,831 794,611 
Loan discount, net of unamortized loan premiums and deferred origination costs(22,603)(9,908)
Allowance for loan losses:
Non-Nelnet Bank:
Federally insured loans(115,859)(128,590)
Private education loans(17,053)(19,529)
Consumer loans(4,429)(27,256)
Non-Nelnet Bank allowance for loan losses(137,341)(175,375)
Nelnet Bank:
Federally insured loans(289)— 
Private education loans(414)(323)
Nelnet Bank allowance for loan losses(703)(323)
 $19,304,203 20,185,656 
On May 14, 2021 and September 29, 2021, the Company sold $77.4 million (par value) and $18.4 million (par value) of consumer loans, respectively, to an unrelated third party who securitized such loans. The Company recognized a gain of $15.3 million (pre-tax) and $3.2 million (pre-tax), respectively, as part of these transactions. As partial consideration received for the consumer loans sold, the Company received a 24.5 percent and 6.9 percent residual interest, respectively, in the consumer loan securitizations that are included in "investments" on the Company's consolidated balance sheet.
Activity in the Allowance for Loan Losses
The following table presents the activity in the allowance for loan losses by portfolio segment.
Balance at beginning of periodImpact of ASC 326 adoptionProvision (negative provision) for loan lossesCharge-offsRecoveriesInitial allowance on loans purchased with credit deterioration (a)Loan salesBalance at end of period
Three months ended September 30, 2021
Non-Nelnet Bank
Federally insured loans$120,802 — 4,452 (10,330)— 935 — 115,859 
Private education loans19,403 — (1,208)(954)113 — (301)17,053 
Consumer loans4,702 — 2,696 (1,133)187 — (2,023)4,429 
Nelnet Bank
Federally insured loans245 — 44 — — — — 289 
Private education loans567 — (157)— — — 414 
$145,719 — 5,827 (12,417)304 935 (2,324)138,044 
Three months ended September 30, 2020
Non-Nelnet Bank
Federally insured loans$144,829 — (5,299)(2,487)— 2,900 — 139,943 
Private education loans25,535 — (5,650)(5)133 — — 20,013 
Consumer loans39,081 — 5,128 (2,723)381 — (15,924)25,943 
$209,445 — (5,821)(5,215)514 2,900 (15,924)185,899 
Nine months ended September 30, 2021
Non-Nelnet Bank
Federally insured loans$128,590 — (3,428)(11,563)— 2,260 — 115,859 
Private education loans19,529 — (781)(1,850)454 — (299)17,053 
Consumer loans27,256 — (7,016)(4,547)668 — (11,932)4,429 
Nelnet Bank
Federally insured loans— — 289 — — — — 289 
Private education loans323 — 89 — — (2)414 
$175,698 — (10,847)(17,960)1,126 2,260 (12,233)138,044 
Nine months ended September 30, 2020
Non-Nelnet Bank
Federally insured loans$36,763 72,291 32,074 (14,885)— 13,700 — 139,943 
Private education loans9,597 4,797 6,471 (1,360)508 — — 20,013 
Consumer loans15,554 13,926 34,931 (9,893)849 — (29,424)25,943 
$61,914 91,014 73,476 (26,138)1,357 13,700 (29,424)185,899 
a) During the three months ended September 30, 2021 and 2020, and nine months ended September 30, 2021 and 2020, the Company acquired $64.6 million (par value), $137.5 million (par value), $153.3 million (par value), and $721.4 million (par value), respectively, of federally insured rehabilitation loans that met the definition of PCD loans when they were purchased by the Company.
Beginning in March 2020, the coronavirus disease 2019 ("COVID-19") pandemic has caused significant disruptions in the U.S. and world economies. Apart from the impact of the adoption of ASC 326 effective January 1, 2020, the Company’s allowance for loan losses increased during the first quarter of 2020 primarily as a result of the COVID-19 pandemic and its effects on economic conditions. During the third quarter of 2020, the Company recognized a negative provision for loan losses due to management's estimate of certain continued improved economic conditions (including the improvement in certain macroeconomic variables (unemployment rates, gross domestic product, and consumer price index) used in the Company's loan loss models) in comparison to management's estimate of economic conditions used to determine the allowance for loan losses as of June 30, 2020.
For the three months ended September 30, 2021, charge-offs for the Company’s federally insured loan portfolio were $10.3 million. The increased level of charge-offs in the third quarter of 2021 as compared to historical periods was due to the Company proactively applying a 90 day natural disaster forbearance due to COVID-19 to any loan that was 31-269 days past due effective March 13, 2020 through June 30, 2020. Beginning July 1, 2020, the Company discontinued proactively applying
90 day natural disaster forbearances on past due loans. Many loans that exited the natural disaster forbearance on July 1, 2020 have gone into default, been submitted to the guaranty agency, and been charged off by the Company during the third quarter of 2021.
During the nine months ended September 30, 2021, the Company recorded a negative provision for loan losses due to management's estimate of certain continued improved economic conditions as of September 30, 2021 in comparison to management's estimate of economic conditions used to determine the allowance for loan losses as of December 31, 2020. These amounts were partially offset by the establishment of an initial allowance for loans originated and acquired during the period.
Loan Status and Delinquencies
The key credit quality indicators for the Company's federally insured, private education, and consumer loan portfolios are loan status, including delinquencies. The impact of changes in loan status is incorporated into the allowance for loan losses calculation. Delinquencies have the potential to adversely impact the Company’s earnings through increased servicing and collection costs and account charge-offs. The table below shows the Company’s loan status and delinquency amounts.
As of September 30, 2021As of December 31, 2020As of September 30, 2020
Federally insured loans - Non-Nelnet Bank:    
Loans in-school/grace/deferment $909,228 5.0 % $1,036,028 5.4 % $1,037,754 5.4 %
Loans in forbearance 1,826,082 10.1  1,973,175 10.3  1,916,906 10.0 
Loans in repayment status:  
Loans current13,525,751 88.1 %13,683,054 84.9 %14,845,519 91.7 %
Loans delinquent 31-60 days548,670 3.6 633,411 3.9 945,411 5.9 
Loans delinquent 61-90 days286,681 1.9 307,936 1.9 249,523 1.5 
Loans delinquent 91-120 days163,447 1.1 800,257 5.0 129,994 0.8 
Loans delinquent 121-270 days467,441 3.0 674,975 4.2 605 0.0 
Loans delinquent 271 days or greater354,188 2.3 20,337 0.1 19,867 0.1 
Total loans in repayment15,346,178 84.9 100.0 %16,119,970 84.3 100.0 %16,190,919 84.6 100.0 %
Total federally insured loans18,081,488 100.0 % 19,129,173 100.0 % 19,145,579 100.0 %
Accrued interest receivable831,142 791,453 757,960 
Loan discount, net of unamortized premiums and deferred origination costs(23,229)(14,505)(20,554)
Allowance for loan losses(115,859)(128,590)(139,943)
Total federally insured loans and accrued interest receivable, net of allowance for loan losses$18,773,542 $19,777,531 $19,743,042 
Private education loans - Non-Nelnet Bank:
Loans in-school/grace/deferment $10,282 3.2 %$5,049 1.6 %$3,839 1.4 %
Loans in forbearance 3,554 1.1 2,359 0.7 5,437 2.0 
Loans in repayment status:
Loans current300,231 98.3 %310,036 99.0 %261,514 98.8 %
Loans delinquent 31-60 days1,870 0.6 1,099 0.4 1,820 0.7 
Loans delinquent 61-90 days912 0.3 675 0.2 454 0.2 
Loans delinquent 91 days or greater2,363 0.8 1,371 0.4 743 0.3 
Total loans in repayment305,376 95.7 100.0 %313,181 97.7 100.0 %264,531 96.6 100.0 %
Total private education loans319,212 100.0 % 320,589 100.0 % 273,807 100.0 %
Accrued interest receivable2,076 2,131 1,960 
Loan discount, net of unamortized premiums(1,496)2,691 1,137 
Allowance for loan losses(17,053)(19,529)(20,013)
Total private education loans and accrued interest receivable, net of allowance for loan losses$302,739 $305,882 $256,891 
As of September 30, 2021As of December 31, 2020As of September 30, 2020
Consumer loans - Non-Nelnet Bank:
Loans in deferment$18 0.0 %$829 0.8 %$1,084 1.1 %
Loans in repayment status:
Loans current35,744 96.6 %105,650 97.4 %96,038 96.9 %
Loans delinquent 31-60 days319 0.9 954 0.9 1,044 1.1 
Loans delinquent 61-90 days243 0.7 804 0.7 776 0.8 
Loans delinquent 91 days or greater670 1.8 1,109 1.0 1,238 1.2 
Total loans in repayment36,976 100.0 100.0 %108,517 99.2 100.0 %99,096 98.9 %100.0 %
Total consumer loans36,994 100.0 %109,346 100.0 %100,180 100.0 %
Accrued interest receivable280 1,001 867 
Loan premium664 1,640 1,505 
Allowance for loan losses(4,429)(27,256)(25,943)
Total consumer loans and accrued interest receivable, net of allowance for loan losses$33,509 $84,731 $76,609 
Federally insured loans - Nelnet Bank:
Loans in-school/grace/deferment$283 0.3 %
Loans in forbearance1,722 1.8 
Loans in repayment status:
Loans current91,366 99.4 %
Loans delinquent 31-60 days277 0.3 
Loans delinquent 61-90 days35 — 
Loans delinquent 91-120 days45 0.1 
Loans delinquent 121-270 days202 0.2 
Loans delinquent 271 days or greater— — 
Total loans in repayment91,925 97.9 100.0 %
Total federally insured loans93,930 100.0 %
Accrued interest receivable1,177 
Loan premium28 
Allowance for loan losses(289)
Total federally insured loans and accrued interest receivable, net of allowance for loan losses$94,846 
Private education loans - Nelnet Bank:
Loans in-school/grace/deferment$82 0.1 %$— — %
Loans in forbearance193 0.2 29 0.2 
Loans in repayment status:
Loans current98,120 100.0 %17,514 100.0 %
Loans delinquent 31-60 days— — — — 
Loans delinquent 61-90 days— — — — 
Loans delinquent 91 days or greater— — — — 
Total loans in repayment98,120 99.7 100.0 %17,514 99.8 100.0 %
Total private education loans98,395 100.0 %17,543 100.0 %
Accrued interest receivable156 26 
Deferred origination costs1,430 266 
Allowance for loan losses(414)(323)
Total private education loans and accrued interest receivable, net of allowance for loan losses$99,567 $17,512 

Nonaccrual Status
The Company does not place federally insured loans on nonaccrual status due to the government guaranty. The amortized cost of private and consumer loans on nonaccrual status, as well as the allowance for loan losses related to such loans, as of December 31, 2020 and September 30, 2021, was not material.
Amortized Cost Basis by Origination Year
The following table presents the amortized cost of the Company's private education and consumer loans by loan status and delinquency amount as of September 30, 2021 based on year of origination. Effective July 1, 2010, no new loan originations can be made under the Federal Family Education Loan Program (the "FFEL Program" or "FFELP") and all new federal loan originations must be made under the Federal Direct Loan Program. As such, all the Company’s federally insured loans were originated prior to July 1, 2010.
Nine months ended September 30, 20212020201920182017Prior yearsTotal
Private education loans - Non-Nelnet Bank:
Loans in school/grace/deferment$1,310 2,202 4,572 — — 2,198 10,282 
Loans in forbearance— 649 657 180 — 2,068 3,554 
Loans in repayment status:
Loans current2,252 75,514 53,814 367 — 168,284 300,231 
Loans delinquent 31-60 days— 147 125 — — 1,598 1,870 
Loans delinquent 61-90 days— — — — — 912 912 
Loans delinquent 91 days or greater— — — — — 2,363 2,363 
Total loans in repayment2,252 75,661 53,939 367 — 173,157 305,376 
Total private education loans$3,562 78,512 59,168 547 — 177,423 319,212 
Accrued interest receivable2,076 
Loan discount, net of unamortized premiums