A Nebraska company announced Thursday that it has agreed to buy the student loan servicing arm of Madison-based Great Lakes Higher Education Corp.
Nelnet, a publicly traded competitor, will buy the nonprofit corporation’s student loan servicing company, Great Lakes Educational Loan Services Inc., for $150 million. Great Lakes employs about 2,000 employees nationwide, according to its website.
About 700 of Great Lakes’ Madison-based employees are included in the acquisition, said Nelnet spokesman Ben Kiser.
Kiser said it’s too early to speculate on the long-term status of Great Lakes employees included in the deal, but employees of both companies will keep their jobs and maintain their same duties for now.
Borrowers with loans serviced by the two companies won’t experience any changes, either, Kiser said.
Both companies have separate contracts to service federal loans for the Department of Education that expire in 2019.
Nelnet said Great Lakes CEO Jeff Crosby will continue to serve as its CEO, but over time, operations between the two companies will be consolidated.
Both companies are among the nation’s biggest federal loan service companies and are collaborating on a federal loan servicing project, but otherwise they will operate separately.
A Great Lakes representative didn’t immediately respond to requests for comment.
Founded in 1967, Great Lakes’ headquarters is at 2401 International Lane on the North Side.
Great Lakes services $238 billion in student loans for more than 8 million borrowers and holds guarantees on more than $77 billion in Federal Family Education Loan (FFEL) Program loans, according to its website.
As of June 30, Lincoln-based Nelnet oversaw $168 billion in government-owned student loans for 5.8 million borrowers and $23 billion in FFEL loans for 1.2 million borrowers, Kiser said. The company also serviced $10 billion in private education or consumer loans for 454,000 borrowers, he said.
The purchase is the largest in Nelnet’s history. The company, which counts 4,000 employees, also has a subsidiary providing telecommunications services and infrastructure, and it has invested in startups and real estate developments in Nebraska.
The sale is scheduled to close January 1.
“This is a perfect match of two student loan servicing organizations with closely aligned values,” said Nelnet CEO Jeff Noordhoek.
This article was originally published in the Wisconsin State Journal.