v3.25.2
Investments and Notes Receivable (Tables)
 6 Months Ended
Jun. 30, 2025
Investments [Abstract]  
Schedule of Investments and Notes Receivable
“Total investments and notes receivable” consisted of the following:
As of June 30, 2025As of December 31, 2024
Amortized costGross unrealized gainsGross unrealized lossesFair valueAmortized costGross unrealized gainsGross unrealized lossesFair value
Investments at fair value:
Available-for-sale asset-backed securities
Non-Nelnet Bank:
FFELP loan$128,213 3,977 (3,056)129,134 188,386 5,804 (896)193,294 
FFELP loan and other debt securities - restricted (a)119,014 3,350 (450)121,914 98,914 3,151 (78)101,987 
Private education loan (b)216,233 52 (16,339)199,946 237,288 — (18,118)219,170 
Other debt securities44,617 2,245 (15)46,847 32,552 2,500 — 35,052 
Total Non-Nelnet Bank508,077 9,624 (19,860)497,841 557,140 11,455 (19,092)549,503 
Nelnet Bank:
FFELP loan234,438 5,862 (714)239,586 231,543 6,060 (270)237,333 
Private education loan15,250 — (1)15,249 1,596 — — 1,596 
Other debt securities451,116 1,309 (2,121)450,304 296,944 1,775 (1,325)297,394 
Total Nelnet Bank700,804 7,171 (2,836)705,139 530,083 7,835 (1,595)536,323 
Total available-for-sale asset-backed securities$1,208,881 16,795 (22,696)1,202,980 1,087,223 19,290 (20,687)1,085,826 
Equity securities and funds measured at net asset value83,749 74,494 
Total investments at fair value1,286,729 1,160,320 
Other investments and notes receivable (not measured at fair value):
Nelnet Bank: Held-to-maturity asset-backed securities
FFELP loan201,806 203,439 
Private education loan1,785 7,335 
Total Nelnet Bank held-to-maturity asset-backed securities203,591 210,774 
Venture capital, funds, and other:
Measurement alternative (c)207,086 200,782 
Equity method172,935 170,258 
Total venture capital and funds380,021 371,040 
Real estate equity method176,411 131,745 
Investment in ALLO (d):
Voting interest/equity method— — 
Preferred membership interests and accrued and unpaid preferred return— 225,614 
Total investment in ALLO— 225,614 
Beneficial interest in loan securitizations (e):
Consumer loans, net of allowance for credit losses of $41,008 and $38,590 as of June 30, 2025 and December 31, 2024, respectively
127,729 142,764 
Private education loans, net of allowance for credit losses of $4,970 and $901 as of June 30, 2025 and December 31, 2024, respectively
44,502 52,824 
Federally insured student loans18,622 18,221 
Total beneficial interest in loan securitizations, net of allowance190,853 213,809 
Solar (f)(200,784)(155,048)
Notes receivable54,603 32,258 
Tax liens, affordable housing, and other13,515 10,184 
Total other investments and notes receivable (not measured at fair value)818,210 1,040,376 
Total investments and notes receivable$2,104,939 $2,200,696 
(a)    Represent investments held in third-party trusts as collateral for the Company’s reinsurance business.
(b)    As sponsor of certain private education loan securitizations, the Company is required to provide a certain level of risk retention, and has purchased bonds issued in such securitizations to satisfy this requirement. The bonds purchased to satisfy the risk retention requirement are included in the above table. The Company must retain these investment securities until the latest of (i) the date the aggregate outstanding principal balance of the loans in the securitization is 33% or less of the initial loan balance, and (ii) the date the aggregate outstanding principal balance of the bonds is 33% or less of the aggregate initial outstanding principal balance of the bonds, at which time the Company can sell its investment securities (bonds) to a third party.
(c)    The Company has an investment in Agile Sports Technologies, Inc. (doing business as “Hudl”). During the first quarter of 2025, the Company acquired additional ownership interests in Hudl for $3.8 million from existing Hudl investors. This transaction was not considered an observable market transaction (not orderly) because it was not subject to customary marketing activities. Accordingly, the Company did not adjust its carrying value of its Hudl investment to the transaction value. As of June 30, 2025, the carrying amount of the Company's investment in Hudl was $172.5 million. David S. Graff, who has served on the Company's Board of Directors since May 2014, is CEO, co-founder, and a director of Hudl.
(d)    On June 4, 2025, the Company redeemed a portion of its voting membership interests in ALLO and all its outstanding preferred membership interests, including the preferred return accrued on such membership interests through June 3, 2025. See note 2 for additional information. The Company's voting membership interest in ALLO is accounted for using the HLBV method of accounting. Using the HLBV method of accounting, the Company recognized $10.7 million of losses during the three months ended March 31, 2024, reducing the carrying value of the voting membership interest investment to $0. Absent additional equity contributions with respect to ALLO's voting membership interest, the Company will not recognize additional losses for its voting membership interest in ALLO. The Company recognized income on its ALLO preferred membership interests of $6.0 million and $4.2 million during the three months ended June 30, 2025 and 2024, respectively, and $14.4 million and $6.6 million during the six months ended June 30, 2025 and 2024, respectively. The income statement activity from the Company's investment in ALLO is included in "other, net" in "other income (expense)" on the consolidated statements of income.
(e)    The Company has partial ownership in certain consumer, private education, and federally insured student loan securitizations, which are accounted for as held-to-maturity beneficial interest investments. As of the latest remittance reports filed by the various trusts prior to or as of June 30, 2025, the Company's ownership correlates to approximately $1.00 billion, $420 million, and $280 million of consumer, private education, and federally insured student loans, respectively, included in these securitizations. The Company recorded a $1.5 million and $5.0 million allowance for credit losses (and related provision expense) during the first and second quarters of 2025, respectively, on these investments. This expense is included in "impairment expense and provision for beneficial interests" on the consolidated statements of income.
(f)    The Company invests in solar tax equity investments through investment partnerships. Due to the management and control of each of these investment partnerships, such partnerships that invest in tax equity investments are consolidated on the Company’s consolidated financial statements, with the third-party co-investor’s portion being presented as noncontrolling interests. As of June 30, 2025, the Company has invested a total of $300.6 million and its third-party investors have invested $285.8 million in tax equity investments that remain outstanding in renewable energy solar partnerships that support the development and operations of solar projects. The carrying value of the Company’s investment in a solar project is reduced by tax credits earned when the solar project is placed in service. As of June 30, 2025, the Company and its third-party co-investors have earned $334.2 million and $290.7 million, respectively, of tax credits on those projects that remain outstanding. The solar investment negative carrying value on the consolidated balance sheet of $200.8 million as of June 30, 2025 represents the sum of total tax credits earned on solar projects placed in service through June 30, 2025 and the calculated HLBV cumulative net losses being larger than the total investment contributions made by the Company and its syndication partners on such projects. The solar investment negative carrying value as of June 30, 2025, excluding the portion owned by syndication partners that is reflected as "noncontrolling interests" on the consolidated balance sheet, was $97.7 million.
The Company accounts for its solar investments using the HLBV method of accounting. For the majority of the Company’s solar investments, the HLBV method of accounting results in accelerated losses in the initial years of investment. The following table presents (i) the Company's recognized HLBV losses and gains recognized from sales of certain investments at the end of the contractual agreement (typically five years), which include losses and gains attributable to third-party noncontrolling interest investors (syndication partners), included in “other, net” in "other income (expense)" on the consolidated statements of income, (ii) solar net losses and gains attributed to noncontrolling interest investors included in “net loss attributable to noncontrolling interests” on the consolidated statements of income, and (iii) the Company's recognized net gain excluding amounts attributed to noncontrolling interest investors (such amount reflecting the before tax net income impact of such solar tax equity investments to the Company):
Three months ended June 30,Six months ended June 30,
2025202420252024
Losses from HLBV accounting (gross)$(6,463)(6,818)(9,079)(4,038)
Gains from sales (gross)4,961 4,208 8,033 4,208 
(Losses) gains from solar investments, net(1,502)(2,610)(1,046)170 
Less: (losses) gains attributable to noncontrolling members, net(3,159)8 (4,204)(1,633)
Net gain (loss), excluding amounts attributed to noncontrolling interest investors$1,657 (2,618)3,158 1,803 
Schedule of Investments Classified by Contractual Maturity Date
The following table presents, by remaining contractual maturity, the amortized cost and fair value of debt securities as of June 30, 2025:
As of June 30, 2025
1 year or lessAfter 1 year through 5 yearsAfter 5 years through 10 yearsAfter 10 yearsTotal
Available-for-sale asset-backed securities
Non-Nelnet Bank:
FFELP loan$— 204 2,520 125,489 128,213 
FFELP loan and other debt securities - restricted— 5,500 15,081 98,433 119,014 
Private education loan— — — 216,233 216,233 
Other debt securities— 4,819 12,281 27,517 44,617 
Total Non-Nelnet Bank— 10,523 29,882 467,672 508,077 
Fair value— 10,632 29,921 457,288 497,841 
Nelnet Bank:
FFELP loan51,575 13,304 27,983 141,576 234,438 
Private education loan— — 14,210 1,040 15,250 
Other debt securities— 39,249 75,189 336,678 451,116 
Total Nelnet Bank51,575 52,553 117,382 479,294 700,804 
Fair value51,214 52,572 117,649 483,704 705,139 
Total available-for-sale asset-backed securities at amortized cost$51,575 63,076 147,264 946,966 1,208,881 
Total available-for-sale asset-backed securities at fair value$51,214 63,204 147,570 940,992 1,202,980 
Held-to-maturity asset-backed securities
Nelnet Bank:
FFELP loan$— 2,632 11,730 187,444 201,806 
Private education loan— — — 1,785 1,785 
Total held-to-maturity asset-backed securities at amortized cost$— 2,632 11,730 189,229 203,591 
Total held-to-maturity asset-backed securities at fair value$— 2,686 11,576 194,202 208,464 
Beneficial interest in loan securitizations (a):
Amortized cost$— — — — 190,853 
Fair value$— — — — 201,025 
(a) The Company's beneficial interest in loan securitizations are not due at a single maturity date.
Schedule of Debt Securities, Held-to-Maturity and Beneficial Interest in Securitization
The following table summarizes the unrealized positions for held-to-maturity asset-backed securities investments and the beneficial interest in loan securitizations as of June 30, 2025:
Carrying valueGross unrealized gainsGross unrealized lossesFair value
Asset-backed securities$203,591 5,523 (650)208,464 
Beneficial interest in loan securitizations190,853 11,643 (1,471)201,025 
Schedule of Debt Securities, Available-for-Sale, Unrealized Loss Position, Fair Value
The following table presents securities classified as available-for-sale that have gross unrealized losses as of June 30, 2025 and the fair value of such securities as of June 30, 2025. These securities are segregated between investments that had been in a continuous unrealized loss position for less than twelve months and twelve months or more, based on the point in time that the fair value declined below the amortized cost basis. All securities in the table below have been evaluated to determine if a credit loss exists. As part of that assessment, the Company concluded it currently has the intent and ability to retain these investments, and none of the unrealized losses were due to credit losses.
As of June 30, 2025
Unrealized loss position less than 12 monthsUnrealized loss position 12 months or moreTotal
Unrealized lossFair valueUnrealized lossFair valueUnrealized lossFair value
Available-for-sale asset-backed securities
Non-Nelnet Bank:
FFELP loan$(245)9,992 (2,811)45,914 (3,056)55,906 
FFELP loan and other debt securities - restricted(129)21,535 (321)8,014 (450)29,549 
Private education loan— — (16,339)175,268 (16,339)175,268 
Other debt securities(15)1,985 — — (15)1,985 
Total Non-Nelnet Bank(389)33,512 (19,471)229,196 (19,860)262,708 
Nelnet Bank:
FFELP loan(481)58,186 (233)16,216 (714)74,402 
Private education loan(1)14,208 — — (1)14,208 
Other debt securities(975)169,486 (1,146)13,778 (2,121)183,264 
Total Nelnet Bank(1,457)241,880 (1,379)29,994 (2,836)271,874 
Total available-for-sale asset-backed securities$(1,846)275,392 (20,850)259,190 (22,696)534,582 
Schedule of Gross Proceeds Received and Gross Realized Gains and Losses for Sales of Available-for-Sale Asset-Backed Securities
The following table summarizes the gross proceeds received and gross realized gains and losses related to sales of available-for-sale asset-backed securities:
Three months endedSix months ended
June 30,June 30,
2025202420252024
Gross proceeds from sales$34,828 113,173 109,609 266,547 
Gross realized gains$622 1,516 1,555 2,571 
Gross realized losses(27)(463)(478)(966)
Net gains$595 1,053 1,077 1,605