WASHINGTON, August 9, 2026, 09:08 EDT — The $11 billion in student loan relief has centered attention on servicing fees, leaving the issue of reducing loan principal largely untouched.
- Over 170,000 borrowers are set to receive around $11 billion in federal loan forgiveness.
- Initial estimates indicate average relief is around $64,700 for each borrower impacted.
- U.S. markets remain shut on Sunday. Shares of Nelnet and Maximus dropped over the past week.
The U.S. Education Department plans to cancel about $11 billion in debt for over 170,000 borrowers after an appeals court declined to grant an additional delay. For investors, the impact on publicly traded companies is less significant than the headline implies.
The impacted balances consist of federal obligations managed by private contractors. As a result, Nelnet NYSE:NNI and Maximus NYSE:MMS do not take on the principal cancellation on a one-to-one basis. Their risk is related to the number of accounts they service, the details of contract agreements and costs tied to implementation.
The distinction is significant. The latest aid amounts to around 0.65% of the $1.7 trillion national portfolio and about 0.40% of its 42.6 million beneficiaries. For individual households, the impact is higher: approximately $64,700 for each eligible borrower.
These figures represent initial reporter estimates based on published rounded totals.
| Relief scope | Borrowers | Discharges and refunds | Approx. amount per borrower | Share of federal borrowers | Share of $1.7 trillion portfolio |
|---|---|---|---|---|---|
| Issued by April | Nearly 300,000 | Roughly $12 billion | Roughly $40,000 | Roughly 0.70% | Roughly 0.71% |
| Recently mandated group | Over 170,000 | About $11 billion | Roughly $64,700 | Roughly 0.40% | Roughly 0.65% |
| Total Sweet settlement | Over 450,000 | Over $23 billion | Roughly $51,100 | Roughly 1.06% | Roughly 1.35% |
The July 17 ruling addressed post-settlement applicants in Sweet v. McMahon. Under a 2022 settlement, the department was obligated to review borrower-defense claims within specified timeframes. Department filings referenced by NPR showed that only 60,000 post-class applications had met the court’s deadline.
Eileen Connor, executive director at the Project on Predatory Student Lending, stated the settlement “improved their personal balance sheets by over $23 billion.” The organization represented borrowers alleging that colleges misrepresented their job opportunities, expected earnings, or ability to transfer credits. KPBS
The department objected to the expedited schedule. Spokesperson Ellen Keast stated the settlement “imposed an unrealistic deadline” and maintained the agency had “complied in good faith.” KPBS
An operational issue was underscored by a Government Accountability Office report published Thursday. Each of the four federal servicers interviewed requested that coordination take place earlier when making complicated program adjustments. The GAO found that ambiguous instructions led to repeated tasks, holdups, and multiple rounds of communication with the department. The Education Department objected to the formal coordination guidelines recommended by the watchdog.
Last week’s earnings updates from companies reinforce that investor attention. The share price movements shown reflect changes from the close on August 7 against the close on July 31. These moves are not exclusively linked to the Sweet settlement.
| Company | Friday close | Weekly change | Fresh quarterly measure | Investor read-through |
|---|---|---|---|---|
| Nelnet | $131.46 | -3.2% | Servicing revenue increased 9.5% to $132.2 million; segment net income declined 25.7% to $11.3 million | Margins impacted by lower servicing revenue and a drop in borrower volumes from the Education Department |
| Maximus | $59.19 | -1.8% | Revenue decreased 5.2% to $1.28 billion; U.S. Federal Services segment posted revenue of $721 million | Fiscal-year profit outlook adjusted due to changes in an unspecified federal contract |
Nelnet offers the most straightforward indicator. The number of borrowers it services dropped to 15.2 million from 15.5 million in March, while its serviced balances decreased to $519.2 billion from $525.7 billion. The firm noted that lower volumes from Education Department borrowers were partly balanced by gains in Canada and consumer servicing.
Nelnet CEO Jeff Noordhoek described the quarter’s performance as “solid.” However, profit in the servicing segment declined by $3.9 million compared with the same period last year. The company noted that reduced revenue from its department contract contributed in part to the lower margins. nelnetinvestors.com
Maximus manages the Aidvantage platform for federal servicing. In its most recent update, the company did not specify the initiative linked to a temporary federal contract modification set to last through December. Nonetheless, this adjustment reduced projected federal-services margins to a range of 16.5%-17.0% and led to revised adjusted earnings guidance of $7.90-$8.20 per share. Chief Executive Bruce Caswell highlighted the “resilience” of the business. aidvantage.studentaid.gov
Analyst coverage, especially for Nelnet, is still limited. FactSet provides the targets and earnings estimates shown below, as listed by The Wall Street Journal. Implied return figures are early estimates based on Friday’s closing prices.
| Company | Consensus recommendation | Current ratings | Average target | Implied return | FY2026 EPS estimate |
|---|---|---|---|---|---|
| Nelnet | Hold | 1 Hold | $130 | -1.1% | $7.50, a decrease from $8.18 a month ago |
| Maximus | Overweight | 1 Buy, 1 Overweight | $100 | +68.9% | $8.26, falling from $8.44 the previous month |
The target gap does not serve as a Sweet-specific trading indicator. Maximus presents two recommendations, compared to one for Nelnet. Further clarity will come from account allocations, reimbursement conditions and processing costs.
As trading resumes Monday, investors are expected to monitor for implementation notifications and potential servicer-specific allocation of the 170,000 accounts. The available court, agency and company documents do not indicate this breakdown. As a result, it is not yet possible to determine the verified company-level revenue impact.
Risks: Agreements can compensate servicers for extra processing work, and reductions in accounts may not be evenly distributed. Changes in timing might also move cash costs from one quarter to another. Nelnet also holds federally insured FFELP assets independently, meaning servicing challenges should not be mistaken for credit losses within that specific loan portfolio.
The investor impact is more limited than the $11 billion headline figure. While the settlement amount is significant for households involved, it represents a relatively small portion of the federal portfolio. For listed servicers, the main earnings risk stems from performance and contract terms.
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