Student lender Nelnet plans to cut 300 jobs

[Omaha Steve]

http://www.omaha.com/index.php?u_page=1208&u_sid=10239830

Published Wednesday | January 23, 2008
Student lender Nelnet plans to cut 300 jobs
BY STEVE JORDON
WORLD-HERALD STAFF WRITER

Lincoln-based student loan company Nelnet Inc. said Wednesday that problems in the global credit markets and changes in federal laws prompted a decision to trim 300 jobs and suspend some of its lending.

The job cuts should reduce expenses by $15 million to $20 million a year, Nelnet said. A spokesman said some Lincoln employees would lose their jobs but the number wasn't certain. About 1,000 of Nelnet's 3,000 employees work in Lincoln.

"The ongoing turmoil in the credit markets is much worse than we anticipated, and the duration of the disruption is unknown," said Mike Dunlap, Nelnet's chairman and chief executive. "We are taking action to aggressively reduce expenses and move the company forward in this challenging financial environment for our student loan businesses."

Problems in the home mortgage industry have spread to other parts of the nation's credit system, creating shortages of money to loan for some purposes.

He said Nelnet has money to loan and wants to take part in the Federal Family Education Loan Program, but changes in federal laws and the market disruption "forced us to make difficult decisions about our level of participation in the program."

The cost of financing loans in the program is up significantly, eroding the profits from loans made after Oct. 1, Nelnet said, so the company suspended its new consolidation loan activity and will be "more selective" in all of its new lending.

FULL story at link.