Nelnet announced this week it has completed the acquisition of Madison-based Great Lakes Educational Loan Services, Inc. from Great Lakes Higher Education Corporation.
A press release provided by Nelnet said the company paid $150 million for 100 percent of the stock of Great Lakes, following the satisfaction of all required closing conditions. The acquisition makes Lincoln-based Nelnet the nation’s largest servicer of federal student loans.
“We are excited to welcome the Great Lakes team into the Nelnet family,” said Jeff Noordhoek, Chief Executive Officer of Nelnet. “We now have the incredible opportunity to transform student loan servicing for millions of borrowers and make a lasting impact on their financial lives With 90 years of collective experience and values focused on providing superior customer service for borrowers; it’s a mission for which Nelnet and Great Lakes are prepared.”
Great Lakes previously served as Great Lakes Higher Education Corporation & Affiliates’ technology provider and student loan servicing company. As of the end of 2017, Great Lakes was servicing $224.4 billion in government-owned student loans for 7.5 million borrowers, $10.7 billion in Federal Family Education Loan (FFEL) Program loans for almost 479,000 borrowers, and $8.5 billion in private or consumer loans for over 415,000 borrowers.
Great Lakes and Nelnet will continue to service their respective government-owned portfolios on behalf of the U.S. Department of Education while maintaining their distinct brands, independent servicing operations, and teams.
Each entity will continue to compete for new student loan volume under its respective existing contract with the Department, both of which are scheduled to expire in June 2019.
For nearly two years, Nelnet and Great Lakes have also been working together to develop a new, state-of-the-art servicing system for government-owned student loans.
The servicing platform under development through the joint venture will utilize technology to scale for additional volume of borrowers, protect customer information and enhance borrowers’ experiences.
Great Lakes and Nelnet believe that by leveraging a single platform for government-owned loans, they’ll be able to support millions of additional borrowers and have opportunities to invest in strategies to further enhance borrower experiences.
Once the acquisition of Great Lakes is finalized, the combined company will service $455 billion of student loans for 16.2 million borrowers, including $397 billion in government-owned student loans for 13.4 million borrowers, $38 billion in FFEL Program loans for 1.9 million borrowers, and $20 billion in private or consumer loans for almost 918,000 borrowers.
“It is now up to us to execute together our plans for further enhanced borrower experiences,” said Noordhoek.