NELNET INCNNI
NELNET INC Fair Value Disclosure
Fair Value
The following tables present the Company’s financial assets and liabilities that are measured at fair value on a recurring basis. There were no transfers into or out of level 1, level 2, or level 3 for the years ended December 31, 2025 and 2024.
| As of December 31, 2025 | As of December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | ||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||
| Investments (a): | |||||||||||||||||||||||||||||||||||
| Asset-backed debt securities - available-for-sale | $ | 100 | 1,304,888 | 1,304,988 | 100 | 1,085,726 | 1,085,826 | ||||||||||||||||||||||||||||
| Equity securities | 22,107 | — | 22,107 | 455 | — | 455 | |||||||||||||||||||||||||||||
| Equity securities measured at net asset value (b) | 87,541 | 74,039 | |||||||||||||||||||||||||||||||||
| Total investments | 22,207 | 1,304,888 | 1,414,636 | 555 | 1,085,726 | 1,160,320 | |||||||||||||||||||||||||||||
| — | 614 | 614 | — | 3,232 | 3,232 | ||||||||||||||||||||||||||||||
| Total assets | $ | 22,207 | 1,305,502 | 1,415,250 | 555 | 1,088,958 | 1,163,552 | ||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||
| $ | — | 1,727 | 1,727 | — | 53 | 53 | |||||||||||||||||||||||||||||
| Total liabilities | $ | — | 1,727 | 1,727 | — | 53 | 53 | ||||||||||||||||||||||||||||
(a) Investments represent investments recorded at fair value on a recurring basis. Level 1 investments are measured based upon quoted prices and as of December 31, 2025 and 2024, include investments traded on an active exchange and a single U.S. Treasury security. Level 2 investments include student loan asset-backed, mortgage-backed, collateralized loan obligation, and other consumer loan-backed securities. The fair value for the Level 2 securities is determined using indicative quotes from broker-dealers or an income approach valuation technique (present value using the discount rate adjustment technique) that considers, among other things, rates currently observed in publicly traded debt markets for debt of similar terms issued by companies with comparable credit risk.
(b) In accordance with the Fair Value Measurements Topic of the FASB Accounting Standards Codification, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
(c) The Company’s non-centrally cleared derivatives are accounted for at fair value on a recurring basis. The fair value of derivative financial instruments is determined using a market approach in which derivative pricing models use the stated terms of the contracts and observable yield curves and volatilities from active markets. When determining the fair value of derivatives, the Company takes into account counterparty credit risk for positions where it is exposed to the counterparty on a net basis by assessing exposure net of collateral held. The net exposures for each counterparty are adjusted based on market information available for the specific counterparty.
The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:
| As of December 31, 2025 | |||||||||||||||||||||||||||||
| Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||||||||
| Loans receivable | $ | 9,978,262 | 9,477,759 | — | — | 9,978,262 | |||||||||||||||||||||||
| Accrued loan interest receivable | 528,936 | 528,936 | — | 528,936 | — | ||||||||||||||||||||||||
| Cash and cash equivalents | 295,983 | 295,983 | 295,983 | — | — | ||||||||||||||||||||||||
| Investments at fair value | 1,414,636 | 1,414,636 | 22,207 | 1,304,888 | — | ||||||||||||||||||||||||
| Investments - held-to-maturity asset-backed securities | 215,722 | 211,299 | — | 215,722 | — | ||||||||||||||||||||||||
| Notes receivable | 32,085 | 32,085 | — | 32,085 | — | ||||||||||||||||||||||||
| Beneficial interest in loan securitizations | 211,398 | 194,830 | — | — | 211,398 | ||||||||||||||||||||||||
| Restricted cash | 357,639 | 357,639 | 357,639 | — | — | ||||||||||||||||||||||||
| Restricted cash – due to customers | 319,924 | 319,924 | 319,924 | — | — | ||||||||||||||||||||||||
| Derivative instruments | 614 | 614 | — | 614 | — | ||||||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||||||||
| Bonds and notes payable | 7,784,936 | 7,780,927 | — | 7,784,936 | — | ||||||||||||||||||||||||
| Accrued interest payable | 20,426 | 20,426 | — | 20,426 | — | ||||||||||||||||||||||||
| Bank deposits | 1,658,675 | 1,669,173 | 1,040,077 | 618,598 | — | ||||||||||||||||||||||||
| Due to customers | 457,844 | 457,844 | 457,844 | — | — | ||||||||||||||||||||||||
| Derivative instruments | 1,727 | 1,727 | — | 1,727 | — | ||||||||||||||||||||||||
| As of December 31, 2024 | |||||||||||||||||||||||||||||
| Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
| Financial assets: | |||||||||||||||||||||||||||||
| Loans receivable | $ | 10,008,165 | 9,443,461 | — | — | 10,008,165 | |||||||||||||||||||||||
| Accrued loan interest receivable | 549,283 | 549,283 | — | 549,283 | — | ||||||||||||||||||||||||
| Cash and cash equivalents | 194,518 | 194,518 | 194,518 | — | — | ||||||||||||||||||||||||
| Investments at fair value | 1,160,320 | 1,160,320 | 555 | 1,085,726 | — | ||||||||||||||||||||||||
| Investments - held-to-maturity asset-backed securities | 216,164 | 210,774 | — | 216,164 | — | ||||||||||||||||||||||||
| Notes receivable | 32,258 | 32,258 | — | 32,258 | — | ||||||||||||||||||||||||
| Beneficial interest in loan securitizations | 229,510 | 213,809 | — | — | 229,510 | ||||||||||||||||||||||||
| Restricted cash | 332,100 | 332,100 | 332,100 | — | — | ||||||||||||||||||||||||
| Restricted cash – due to customers | 404,402 | 404,402 | 404,402 | — | — | ||||||||||||||||||||||||
| Derivative instruments | 3,232 | 3,232 | — | 3,232 | — | ||||||||||||||||||||||||
| Financial liabilities: | |||||||||||||||||||||||||||||
| Bonds and notes payable | 8,343,565 | 8,309,797 | — | 8,343,565 | — | ||||||||||||||||||||||||
| Accrued interest payable | 21,046 | 21,046 | — | 21,046 | — | ||||||||||||||||||||||||
| Bank deposits | 1,172,707 | 1,186,131 | 744,721 | 427,986 | — | ||||||||||||||||||||||||
| Due to customers | 478,469 | 478,469 | 478,469 | — | — | ||||||||||||||||||||||||
| Derivative instruments | 53 | 53 | — | 53 | — | ||||||||||||||||||||||||
The methodologies for estimating the fair value of financial assets and liabilities that are measured at fair value on a recurring basis are previously discussed. The remaining financial assets and liabilities were estimated using the following methods and assumptions:
Loans Receivable
Fair values for loans receivable were determined by modeling loan cash flows using stated terms of the assets and internally developed assumptions. The significant assumptions used to project cash flows are prepayment speeds, default rates, cost of funds, required return on equity, and future interest rate and index relationships. A number of significant inputs into the models are internally derived and not observable to market participants.
Investments - Held to Maturity
Fair values for investments classified as held to maturity were determined by using indicative quotes from broker-dealers or an income approach valuation technique (present value using the discount rate adjustment technique) that considers, among other things, rates currently observed in publicly traded debt markets for debt of similar terms issued by companies with comparable credit risk.
Notes Receivable
Fair values for notes receivable were determined by using model-derived valuations with observable inputs, including current market rates.
Beneficial Interest in Loan Securitizations
Fair values for beneficial interest in loan securitizations were determined by modeling securitization cash flows and internally developed assumptions. The significant assumptions used to project cash flows are prepayment speeds, default rates, cost of funds, required return on equity, and future interest rate and index relationships. A number of significant inputs into the models are internally derived and not observable to market participants.
Cash and Cash Equivalents, Restricted Cash, Restricted Cash – Due to Customers, Accrued Loan Interest Receivable, Accrued Interest Payable, and Due to Customers
The carrying amount approximates fair value due to the variable rate of interest and/or the short maturities of these instruments.
Bonds and Notes Payable
The fair value of student loan asset-backed securitizations and warehouse facilities was determined from quotes from broker-dealers or through standard bond pricing models using the stated terms of the borrowings, observable yield curves, market credit spreads, and weighted-average life of underlying collateral. For all other bonds and notes payable, the carrying amount approximates fair value due to the variable rate of interest and/or the short maturities of these instruments.
Bank Deposits
Some of the Company’s deposits are fixed-rate and the fair value for these deposits are estimated using discounted cash flows based on rates currently offered for deposits of similar maturities. These are level 2 valuations. The fair value of the remaining deposits equals the amounts payable on demand at the balance sheet date and are reported at their carrying value. These are level 1 valuations.
Limitations
The fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. Because no market exists for a significant portion of the Company's financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Therefore, the calculated fair value estimates in many instances cannot be substantiated by comparison to independent markets and, in many cases, may not be realizable in a current sale of the instrument. Changes in assumptions could significantly affect the estimates.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 25, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.