Out With The Loans, In With The Groans: Nelnet's CX Failure

We’ve all heard it before: American college students are paying back student loans long after they graduate from school.

If you (or someone you know) are one of the millions of Americans stuck in debt from these loans, you were likely excited to hear the recent announcement from the Biden-Harris administration:

Borrowers with annual income during the pandemic of under $125,000 (for individuals) or under $250,000 (for married couples or heads of households) who received a Pell Grant in college will be eligible for up to $20,000 in debt cancellation. Borrowers who met those income standards but did not receive a Pell Grant will be eligible for up to $10,000 in relief.

For those with $30,000 in debt or less who, individually, make under $125,000, the news was cause for celebration. After all, at least a third of their debt is being removed from their records. Unfortunately, according to the institute for college access and success, “There is enormous variation in debt across reporting colleges, with average debt figures (among those who borrow) as low as $0 to as high as $83,800 in the Class of 2020.” This means, depending on which school the borrower attended, they could be facing far more debt than a mere $30,000. Many graduates leave school required to pay upwards of $200,000 back, a task that could very well take the rest of their lives.

Buyer’s remorse is an understatement to these borrowers, and $10,000 hardly makes them feel better. The stress they feel may make them wish they could go back in time and do it differently—or at least get some sort of refund. Unfortunately, you can’t return an education. Alumni cannot call the university they attended and ask the Dean of Students to pull all the knowledge attained on campus out of their heads. What you can do is talk to your student loan provider and figure out a way to better finance the loans. For over 90% of American borrowers who are paying back Federal student loans, they will do this with Nelnet.

Without Nelnet, borrowers would be under considerably more stress. It does more good than harm for alumni who have outstanding loans. However, it seems that even Nelnet underestimated the number of borrowers it would eventually be supporting. In light of the White House’s recent announcement, college graduates rushed to the website in the tens of thousands. Excited and overwhelmed by the new information, they wanted to see if the “automatic” update had impacted them and, if so, how much. Upon their arrival, many were faced with the following screen:

Undeterred, they continued to refresh their screens until they arrived at a more hopeful message:

The unexpected error might have had something to do with the fact that a large percentage of borrowers wanted to check on that “automatic update” in their student loans and uncover their new debt amount.

Later in the day, the issue seemed to have somewhat resolved itself. The screen, fully loaded, resembled what the website likely looked like at its inception in 1996:

Though it is impossible to login on this screen, it is progress in the right direction.

Alright, so a percentage of national student loans were resolved and the website housing this information crashed. Who cares?

A lot of people, actually. Nelnet had more customers than it was able to handle, despite the ample warning the service was given that this day was coming.

Nelnet is far from the first organization to become overwhelmed with an unexpectedly overactive customer base. If you find yourself in the same boat, consider the following remedy:

The Soft Launch

While Nelnet did not have the authority to ask the President of the United States to delay his announcement that a portion of student loan debt was canceled, there were other ways to test out the system before the big day. For example, during the previous announcement that student loans were canceled for a number of unaccredited universities, the website could have better monitored how it dealt with the increased traffic.

Furthermore, on the big day with the increased traffic and pressure on the call center, Nelnet could have employed the same tactics airlines do when they call the customer service line: “If you are not flying within 48 hours, please see our website for more information.” For the student loan service, this would sound more like, “If this is not a financial emergency, press 1 to be called back tomorrow between the hours of 9 and 5.” Not only would this be respecting the time of the customer, but it would ensure those with emergencies get prompt responses. Additionally, Nelnet could delay the influx of customers to their site by considering a proactive communication approach: emailing or texting customers with the information they will be searching for on the website. This would prevent a website surge, thus creating the same effect as the soft launch.

Businesses do this all the time when they are expecting a rush of people. Restaurants have a soft open with a limited number of consumers before their grand opening to work out any kinks and prepare for the larger crowds. Amazon Prime provides toolkits for its sellers before the annual Prime Day shopping spree and advises on advertising strategies so the businesses don’t get caught off guard by the increased traffic. Even Tesla has soft launches of products before opening them up to the public to test out the new technology.

Similarly, during tax season, companies like H&R block (and even the IRS) must improve their bandwidth to account for the increased number of customers using their services. Accountants cannot stagger the day taxes are due. Everyone American’s taxes are due on April 15^th. What they can do is streamline information, pay for additional server space, and create a lower-quality version of the site to prevent loading and downtime issues. When talking about a person’s personal finances, delays and outages are never acceptable—something that made Nelnet’s issues all the more dire.

Technology fails. Most people are comfortable with that fact by now. But there is no reason for your business to be unprepared for events like this—especially events with so many emotionally charged customers. Nelnet helps borrowers pay back student loans every day: the good greatly outweighs the bad. Still, next time there is a predictable flood of customers to the website, it might be good to take precautions.

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