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Student Loan Officer Lays Off 500 Employees » Amrita Bazar

Student Loan Officer Lays Off 500 Employees » Amrita Bazar

Nelnet, a federal student loan servicer, is reducing its workforce due to delays in the Biden administration’s debt relief package and continued delays in loan repayments, the company said Wednesday.

According to the announcement, around 350 workers hired in the last six months will be laid off and around 210 employees will be laid off “for performance reasons”. Employees received 60 days notice if performance was not a factor.

Nelnet began expanding its staff last year to prepare for a one-time student loan forgiveness program and to resume payments after a break on Dec. 21. 31. Federal courts eventually blocked debt cancellation, further delaying the resumption of payments. The administration plans to reopen 60 days after June 30 or after filing a lawsuit challenging the resolution of the debt relief plan, whichever comes first. The U.S. Supreme Court will hear oral arguments on the plan next month.

“These decisions are never easy,” Nelnet spokesman Ben Kiser said in a statement. “With federal student loan repayments delayed for most of 2023, it is unfortunately not possible to sustain increased staffing levels for work that will remain pending for a significant period of time.”

Kiser added that Nelnet expects many employees to consider reapplying when payments resume.

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