Private Lincoln-based student loan provider Nelnet has exceeded net income expectations during the 4th quarter of 2007.
Nelnet earned a net income of $19 million during the 4th quarter of 2007, compared to a loss of $7.3 million during the 4th quarter of 2006, according to Generally Accepted Accounting Principles.
Nelnet attributes the company's profitability to a quick response to changing times.
"Nelnet has diversified its business to many education services and this has reduced our reliance on net student loans as our primary revenue driver," said Ben Kiser, spokesman for Nelnet.
This proved true in the 4th quarter of 2007. Income from student loan interest did decrease as a percentage of total profits in 2007 from $63.82 million in 2006 to $44.26 million.
Income from other areas, such as tuition fee programs, rose by 75.6 percent from 4th quarter 2006 to 4th quarter 2007.
On a conference call to shareholders, Nelnet president Jeffrey Noordhoek stressed that "the company remains committed to the mission of our helping families plan, prepare and pay for education," but said the manner in which the company does that will change.
Other private lending companies such as Nelnet have struggled recently.
In September, Congress passed the College Cost Reduction Act, and cut more than $20 million from Federal Family Education Loan program's, including Nelnet.
The money was reallocated to need-based programs such as the Pell Grant.
Problems have been exacerbated by the recent credit crunch, which has left many private lenders high and dry as borrowers have defaulted on their loans.
Some private lenders have been forced to leave the business altogether.
Nelnet has also made an effort to cut expenses.
"In September of last year, Nelnet pro-actively announced a restructuring to reduce cost and unfortunately had to make the difficult decision to reduce workforce," Kiser said.
Around 300 Nelnet employees from across the country were marked for layoffs.
Nelnet is in a partnership with UNL and is the lender for graduate and professional-level Stafford loans.
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