Student-loan borrowers' federal balances are now growing every day from interest — but technical issues are delaying some of them from paying it off
- Student-loan company Nelnet experienced a website and call center outage on Wednesday.
- Some borrowers were concerned they could not make payments while interest was growing.
A student-loan company's website and call center went down yet again — but this time, borrowers' student-loan balances were growing as they waited for the technical issues to be resolved.
On Wednesday, when some student-loan borrowers whose debt is managed by Nelnet attempted to log into their accounts to make payments on their loans, they found that they couldn't — the company's website and call center were down. While it's unclear how long this particular outage lasted, one user wrote on X, formerly Twitter, that the site had been down for at least four hours.
"Sorry, Our Systems Are Temporarily Unavailable," Nelnet's website homepage said during the outage. "Our automated phone system and online accounts are currently unavailable due to technical difficulties, and we're working quickly to resolve the issue. We apologize for the inconvenience. Please check back here for updates."
The call center and website now appear to be back up and running, but if the outage lasted longer than a day, borrowers who were hoping to pay off some of their debt might see a slightly bigger balance the next time they logged on. That's because interest on federal student loans grows daily. According to Federal Student Aid: "Unlike other forms of debt, such as credit cards and mortgages, Direct Loans are 'daily interest' loans. On daily interest loans, interest accrues (adds up) every day."
While interest accumulated in just one day would likely not be a large amount, continued technical issues could make the burden more significant over time.
Last week, the federal pause on student-loan payments ended — after over three years, interest started accruing again on borrowers' balances on Friday, and their first bills will be due in October. The interest resumption had some borrowers concerned on Wednesday when they found they could not access their accounts — a borrower told Insider in an email that he "went to pay off about 80% of my loan today and couldn't."
One borrower wrote on X: "If I can't even access my accounts, how am I supposed to pay anything or manage my finances? How are we being charged interest under these conditions? Ridiculous." Another borrower wrote that "@nelnet is down but you can bet the interest is still accruing even if we wanted to make a payment today!!"
Nelnet did not immediately respond to Insider's request for comment on the website outage.
This is also not the first time Nelnet has encountered issues managing the influx of borrowers with questions as they transition back into repayment. Last week, the company had the same error message when borrowers attempted to access the site, which happened just four days before the student-loan payment pause ended. The same thing happened earlier in August, and during that outage Nelnet wrote on X that "we apologize for the higher than normal hold times as we are currently receiving an influx of calls."
Nelnet is not the only servicer experiencing delays helping borrowers. Insider previously spoke to borrowers who have encountered hours-long hold times with their servicer MOHELA, making it difficult to get even simple questions answered regarding their payment status.
These issues could be due to limited resources and funding Federal Student Aid currently has. Biden has requested that Congress give FSA more money to facilitate the transition back into repayment, but as experts recently told Insider, without more money, it's likely borrowers will continue to experience delays with customer service and other bureaucratic obstacles.