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    LINCOLN, Neb., Jan. 23 /PRNewswire-FirstCall/ -- Nelnet (NYSE:   NNI)
 announced today a plan to further reduce operating expenses related to its
 student loan origination and related businesses as a result of the ongoing
 disruption in the global credit markets. Under the plan, the company will
 reduce its workforce by approximately 300 positions and expects to lower
 its operating expenses by $15 million to $20 million (before tax) annually.
 
     "The ongoing turmoil in the credit markets is much worse than we
 anticipated and the duration of the disruption is unknown," said Mike
 Dunlap, Chairman and Chief Executive Officer of Nelnet. "We are taking
 action to aggressively reduce expenses and move the company forward in this
 challenging financial environment for our student loan businesses. Our
 participation in the Federal Family Education Loan Program (FFELP) is
 important to us, and we want to be in this program serving students and
 schools for a long time. However, the reduced economics of student loans
 created by the legislative changes and credit market disruption has forced
 us to make difficult decisions about our level of participation in the
 program."
 
     Although Nelnet has liquidity for its loan origination and acquisition
 activity, the company's cost of funds to finance its FFELP and private
 student loans has increased significantly due to the adverse credit market
 conditions. The combination of the credit market disruption and the
 legislative cuts passed in September 2007 has significantly eroded the
 profitability of federally-guaranteed student loans originated after
 October 1, 2007. Therefore the company has decided to suspend new
 consolidation loan originations and will be more selective in all its other
 origination activity. The company will closely monitor its student loan
 origination and related businesses for both FFELP and private loans while
 the credit markets remain volatile and will continue to make changes, if
 needed, to sustain them.
 
     "Nelnet has many advantages that make us stronger, more stable, and
 better able to withstand the challenges in the student loan industry than
 many organizations," continued Dunlap. "First, we have diversified into
 education services that are performing well and provide increased fee-based
 revenue. Second, we have a $26 billion portfolio of student loans
 originated before October 1, 2007 that will provide a revenue stream for
 many years to come. Third, we are well capitalized with more than $600
 million in equity. Stated simply, we are a strong company with available
 cash and capital to invest in business opportunities that arise. "
 
     The company has been highly successful in its transition to a
 diversified education services company with more than 50 percent of its
 total revenue coming from fee-based businesses. Diversification will
 continue to be a priority for Nelnet.
 
     The company estimates that the total after-tax charge to earnings
 associated with the restructuring plan will range between $15 million and
 $17 million, consisting of approximately $4 million in severance costs, up
 to $2 million in contract termination costs, and $9 million to $11 million
 in non-cash charges related to the impairment of property and equipment,
 intangible assets, and goodwill.
 
     "Decisions to let colleagues go are always difficult," said Dunlap. "We
 will do all that we can to help them through the transition with severance
 packages, health care assistance and career counseling. "
 
     About Nelnet
 
     For 30 years, Nelnet has been helping the education-seeking family
 plan, prepare, and pay for their education. Nelnet serves students in 50
 states, employs approximately 3,000 associates, and has $26.6 billion in
 net student loan assets.
 
     Additional information is available at http://www.nelnet.com.
 
     Information contained or incorporated in this press release may be
 considered forward looking in nature and is subject to various risks,
 uncertainties, and assumptions. Should one or more of these risks or
 uncertainties materialize, or should underlying assumptions prove
 incorrect, actual results may vary materially from those anticipated,
 estimated, or expected. Among the key factors that may have a direct
 bearing on the company's operating results, performance, or financial
 condition expressed or implied by the forward-looking statements are the
 pending and uncertain nature of the reported federal legislation expected
 to significantly affect student loan programs, the uncertain nature of
 estimated expenses that may be incurred and cost savings that may result
 from the company's restructuring plans, changes in terms of student loans
 and the educational credit marketplace, changes in the demand for
 educational financing or in financing preferences of educational
 institutions, students, and their families, or changes in the general
 interest rate environment and in the securitization markets for education
 loans.
 
 

 
 (code #: nnig)
 
 
 

SOURCE Nelnet