Nelnet plans to cut expenses by at least $25 million annually and the cuts announced Thursday represent more than 12 percent of the company's 3,300 employees.

Nelnet Chairman and CEO Mike Dunlap said the company is changing its approach to the student loan business because of the changes Congress is expected to approve.

The company announced the cuts a day after House and Senate negotiators announced a proposal that will boost aid to college students by cutting roughly $20 billion in government subsidies to banks that issue student loans.

The Lincoln-based company says it will close five small loan origination offices and significantly reduce its Indianapolis customer support operations from 320 people to about 55. The offices that are closing are in San Antonio; Honolulu; Mesa, Ariz.; Sacramento, Calif.; and Tulsa, Okla.

"The decisions affecting associates are very difficult," Dunlap said.

Nelnet spokesman Ben Kiser said the cuts will affect most of the company.

But as part of the restructuring, Nelnet's Lincoln headquarters may gain about 100 positions by the end of the year because some customer support and default management jobs will move there.

Nelnet said as many as 175 of the people who will lose their jobs with the company may be hired by other companies in Indianapolis and Bryan, Texas, that Nelnet has signed agreements with. Kiser said those other companies are not doing work for Nelnet but they might be interested in hiring some of Nelnet's workers.

Nelnet said Thursday it expects to record noncash charges between $22 million and $27 million if Congress approves the new student loan regulations, because some of the company's assets will be worth less. But Nelnet has not adjusted its profit outlook because of the changes.

Federal lawmakers have given preliminary approval to bills that would cut roughly $20 billion in federal subsidies to banks that issue government-backed student loans, restructure some federal loan programs and address conflicts of interest in the student loan industry.

Nelnet officials have said the changes will likely force some lenders out of business.

Both the Senate and House have passed a version of new student loan rules, and lawmakers worked out a compromise version of the bill. Now both houses of Congress will have to vote on the compromise.

The full House and Senate are expected to vote on the legislation soon.

Nelnet says it serves students in 50 states and has $26.2 billion in net student loan assets.

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