UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             -----------------------
                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                        PURSUANT TO SECTIONS 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)

[X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934
                          For the fiscal year ended December 31, 2001
                                              OR
[  ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934
             For the transition period from .............. to ..............

                        Commission file number 333-93865
                         ------------------------------
                        NELNET STUDENT LOAN CORPORATION-2
              (Exact name of registrant as specified in its charter


            Nevada                                            84-1518863
(State or other  jurisdiction                             (I.R.S.Employer
of incorporation or organization)                        Identification No.)

      121 South 13th Street, Suite 301
            Lincoln, Nebraska                                  68508
 (Address of principal executive offices)                   (Zip Code)

                                 (402) 475-7272
              (Registrant's telephone number, including area code)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                                      None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                                      None

        INDICATE BY CHECK MARK WHETHER THE REGISTRANT: (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE  ACT OF
1934  DURING  THE  PRECEDING  12 MONTHS  (OR FOR SUCH  SHORTER  PERIOD  THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),  AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES [X] NO ___

        INDICATE BY CHECK MARK IF DISCLOSURE OF  DELINQUENT  FILERS  PURSUANT TO
ITEM 405 OF REGULATION S-K IS NOT CONTAINED  HEREIN,  AND WILL NOT BE CONTAINED,
TO THE BEST OF  REGISTRANT'S  KNOWLEDGE,  IN  DEFINITIVE  PROXY  OR  INFORMATION
STATEMENTS  INCORPORATED  BY  REFERENCE  IN PART  III OF THIS  FORM  10-K OR ANY
AMENDMENT TO THIS FORM 10-K. [X]

        THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF
THE REGISTRANT ON DECEMBER 31, 2001: NONE

        THE NUMBER OF SHARES  OUTSTANDING  OF  REGISTRANT'S  COMMON  STOCK AS OF
APRIL 1, 2002 WAS 1,000.

                       -----------------------------------
                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

                                       1
<PAGE>

                                TABLE OF CONTENTS


                                                                           Page
                                                                           ----

PART I
      ITEM 1.   BUSINESS......................................................3
      ITEM 2.   PROPERTIES....................................................9
      ITEM 3.   LEGAL PROCEEDINGS.............................................9
      ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...........9

PART II
      ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
                STOCKHOLDER MATTERS...........................................9
      ITEM 6.   SELECTED FINANCIAL DATA......................................10
      ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                AND RESULTS OF OPERATIONS....................................11
      ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                MARKET RISK..................................................13
      ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..................14
      ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                ACCOUNTING AND FINANCIAL DISCLOSURE..........................14

PART III
      ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT...........15
      ITEM 11.  EXECUTIVE COMPENSATION.......................................16
      ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT...................................................17
      ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...............17

PART IV
      ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                   FORM 8-K..................................................18

SIGNATURES...................................................................21


                                       2
<PAGE>
FORWARD LOOKING STATEMENTS

               Statements regarding the Company's expectations as to its ability
to purchase Eligible Loans, to structure and issue competitive securities and to
compete  generally,  and certain of the  information  presented  in this report,
constitute  forward  looking  statements  within  the  meaning  of  the  Private
Securities Litigation Reform Act of 1995. Although the Company believes that its
expectations  are  based on  reasonable  assumptions  within  the  bounds of its
knowledge of its business and operations,  there can be no assurance that actual
results will not differ materially from its expectations.

                                     PART I
ITEM 1. BUSINESS

THE COMPANY

               NELNET   Student   Loan   Corporation-2   (the   "Company")   was
incorporated under the laws of the State of Nevada on October 8, 1999. Effective
March 2, 2000,  the Company  became a wholly owned  subsidiary  of NELnet,  Inc.
("NELnet") and a wholly owned indirect subsidiary of Nelnet Loan Services,  Inc.
(formerly UNIPAC Service Corporation), a privately held Nebraska Corporation.

BUSINESS OF COMPANY

               GENERAL.  The Company is a special purpose  corporation formed to
engage in the business of purchasing,  financing, holding and selling guaranteed
educational loans made to students and to parents of students ("Eligible Loans")
under the Higher Education Act of 1965, as amended (the "Higher Education Act").
Eligible  Loans are  purchased by the Company from  eligible  lenders  under the
Higher Education Act pursuant to the terms and subject to the conditions  stated
in student loan purchase agreements. The proceeds of the Eligible Loans are used
by the borrowers to pay the costs  associated with attendance at  post-secondary
educational institutions.

               The Company  finances its purchases of Eligible Loans through the
issuance of its Taxable Student Loan Asset-Backed Notes (the "Notes"). The Notes
have been  issued in several  series.  Repayment  of the Notes is secured by the
pledge of a revolving pool of Eligible Loans and certain other property held for
the benefit of the owners of the Notes (the "Trust Estate"). The Trust Estate is
held by a trustee  (the  "Trustee")  pursuant to the terms of the  Indenture  of
Trust governing the issuance of the Notes (the "Indenture").

               RECENT   REGISTRATION  AND  ISSUANCE  OF  NOTES.  A  registration
statement  on  Form  S-3,   Registration   No.   333-93865  (the   "Registration
Statement"),  was filed with the Securities and Exchange  Commission (the "SEC")
by the Company under the  Securities  Act of 1933,  as amended (the  "Securities
Act"), for  $2,500,000,000 of Notes, and was declared  effective by order of the
SEC in February, 2000. The Notes may be offered on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act of 1933.

               In June,  2000,  the  Company  issued its  Taxable  Student  Loan
Asset-Backed  Auction  Rate Notes,  Series 2000 (the "Series 2000 Notes") in the
aggregate  principal  amount of  $1,000,000,000,  pursuant  to the  Registration
Statement.  The Series 2000 Notes  consisted of (i) Senior Class 2000A-1 Auction
Rate Notes, (the "Class 2000A-1 Notes"),  (ii) Senior Class 2000A-2 Auction Rate
Notes (the "Class 2000A-2 Notes"), (iii) Senior Class 2000A-3 Auction Rate Notes
(the "Class 2000A-3  Notes"),  (iv) Senior Class 2000A-4 Auction Rate Notes (the
"Class 2000A-4 Notes"),  (v) Senior Class 2000A-5 Auction Rate Notes (the "Class
2000A-5  Notes"),  (vi)  Senior  Class  2000A-6  Auction  Rate Notes (the "Class
2000A-6  Notes"),  (vii)  Senior  Class  2000A-7  Auction Rate Notes (the "Class
2000A-7  Notes"),  (viii)  Senior Class  2000A-8  Auction Rate Notes (the "Class
2000A-8  Notes"),  (ix)  Senior  Class  2000A-9  Auction  Rate Notes (the "Class
2000A-9  Notes"),  (x) Senior Class A-10 Auction Rate Notes (the "Class 2000A-10
Notes"), (xi) Senior Class A-11 Auction Rate Notes (the "Class 2000A-11 Notes"),
(xii) Senior Class A-12 Auction Rate Notes (the "Class  2000A-12  Notes") (xiii)
Senior Class A-13 Auction Rate Notes (the "Class 2000A-13 Notes"),  (xiv) Senior
Class A-14 Auction Rate Notes (the "Class 2000A-14  Notes") and (xv) Subordinate
Class 2000B-1 Auction Rate Notes (the "Class 2000B-1  Notes").  On April 2, 2001
the Company issued Taxable Student Loan  Asset-Backed  Fixed Rate Notes,  Series
2001A  (the  "Series  2001A  Notes")  in  the  aggregate   principal  amount  of
$480,000,000,  pursuant to the  Registration  Statement.  The Series 2001A Notes
consisted of Senior Class 2001A-1 Fixed Rate Notes, (the "Class 2001A-1 Notes").
The Company issued  additional  Taxable Student Loan  Asset-Backed  Auction Rate
Notes,  Series  2001B (the  "Series  2001B  Notes") on  September 4, 2001 in the
aggregate  principal  amount  of  $550,000,000,  pursuant  to  the  Registration
Statement.  The Series 2001B Notes consisted of (i) Senior Class 2001A-2 Auction
Rate Notes (the "Class 2001A-2  Notes"),  (ii) Senior Class 2001A-3 Auction Rate
Notes (the "Class 2001A-3 Notes"), (iii) Senior Class 2001A-4 Auction Rate Notes
(the "Class 2001A-4  Notes"),  (iv) Senior Class 2001A-5 Auction Rate Notes (the
"Class 2001A-5 Notes"),  (v) Senior Class 2001A-6 Auction Rate Notes (the "Class
2001A-6  Notes"),  (vi)  Senior  Class  2001A-7  Auction  Rate Notes (the "Class
2001A-7 Notes"),  (vii) Subordinate Class 2001B-1 Auction Rate Notes (the "Class
2001B-1  Notes") and (viii)  Subordinate  Class 2001B-2  Auction Rate Notes (the
"Class 2001B-2 Notes").
                                       3
<PAGE>

               Further  information  regarding  the  issuance  of  Notes  by the
Company since its inception is provided in Table A.

               THE FEDERAL FAMILY  EDUCATION LOAN PROGRAM.  The Higher Education
Act  provides  for a program  of  direct  federal  insurance  of  student  loans
("FISLP")  and  reinsurance  of student  loans  guaranteed or insured by a state
agency  or  private  non-profit  corporation   (collectively,   "Federal  Family
Education  Loans," with such program  referred to herein as the "Federal  Family
Education  Loan  Program").  Several types of loans are currently  authorized as
Federal Family  Education  Loans  pursuant to the Federal Family  Education Loan
Program.  These include: (a) loans to students with respect to which the federal
government  makes interest  payments  available to reduce student  interest cost
during periods of enrollment ("Subsidized Federal Stafford Loans"); (b) loans to
students  with  respect  to which  the  federal  government  does not make  such
interest payments  ("Unsubsidized Federal Stafford Loans" and, collectively with
Subsidized Federal Stafford Loans,  "Federal Stafford Loans");  (c) supplemental
loans to parents of dependent students ("Federal PLUS Loans");  and (d) loans to
fund  payment  and  consolidation  of  certain  of  the  borrower's  obligations
("Federal  Consolidation  Loans").  Prior to July 1, 1994,  the  Federal  Family
Education  Loan  Program also  included a separate  type of loan to graduate and
professional students and independent  undergraduate students and, under certain
circumstances,  dependent  undergraduate  students, to supplement their Stafford
Loans ("Federal Supplemental Loans for Students" or "Federal SLS Loans").

               GUARANTEE  AGENCIES.  Each  Eligible Loan is guaranteed as to the
payment of  principal  and interest by a state or private  non-profit  guarantor
(each, a "Guarantee Agency"). Eligible Loans originated prior to October 1, 1993
are  fully  guaranteed  as to the  principal  amount of such  loans and  accrued
interest by the applicable  Guarantee  Agency.  Eligible Loans  originated on or
after October 1, 1993 are  guaranteed as to 98% of the principal  amount of such
loans and  accrued  interest by the  applicable  Guarantee  Agency.  Each of the
Guarantee  Agencies has a reinsurance  contract with the Department of Education
(the "Department").  The Department reimburses the Guarantee Agencies for claims
paid by the  Guarantee  Agencies.  The  amount of such  reinsurance  payment  is
calculated  annually  and is subject to reduction  based upon the annual  claims
rate of the  Guarantee  Agency  to the  Department.  Regardless  of the level of
reinsurance  that the applicable  Guarantee Agency receives from the Department,
the Trustee will  continue to be entitled to  reimbursement  for the  applicable
guaranteed  portion of an Eligible Loan (either 98% or 100%, as applicable) from
such Guarantee Agency.  The obligations of each of the Guarantee Agencies to the
holders of Eligible  Loans  reinsured by the Department  (the "Federal  Loans"),
such as the  Trustee,  are payable  from the  general  funds  available  to such
Guarantee Agency,  including cash on deposit therewith,  reimbursements received
from the  Department and reserve funds  maintained by such  Guarantee  Agency as
required by the Higher  Education  Act. The Higher  Education Act provides that,
subject to the provisions thereof including the proper origination and servicing
of Eligible Loans,  the full faith and credit of the United States is pledged to
the  reinsurance  payments  by the  Department  to the  Guarantee  Agencies.  In
addition,  the Higher  Education Act provides that if the Secretary of Education
has  determined  that a Guarantee  Agency is unable to meet its  obligations  to
holders of Federal Loans, such as the Trustee, then the holders of Federal Loans
may submit  guarantee  claims  directly to the  Department and the Department is
required to pay to the holders the full  insurance  obligation of such Guarantee
Agency until such time as the obligations are transferred by the Department to a
new Guarantee  Agency  capable of meeting such  obligations or until a qualified
successor Guarantee Agency assumes such obligations. Certain delays in receiving
reimbursement  could occur if a Guarantee  Agency fails to meet its obligations.
In addition, failure to properly originate or service an Eligible Loan can cause
an Eligible Loan to lose its guarantee.

               SERVICING  OF  ELIGIBLE  LOANS.  NELnet  acts  as  servicer  (the
"Servicer")  of the  Company's  Eligible  Loans in  accordance  with a Servicing
Agreement,  dated as of June 1, 2000 (the  "Servicing  Agreement").  Nelnet Loan
Services,  Inc. acts as  subservicer  (the  "Subservicer")  and  custodian  (the
"Custodian") of the Eligible Loans in accordance with the Subservicing Agreement
(the "Subservicing  Agreement")  between NELnet and Nelnet Loan Services,  Inc.,
respectively.  The Company may  appoint  other  entities to act as a servicer or
subservicer if approved by the rating agencies which rate the Notes. Nelnet Loan
Services, Inc. began its education loan servicing operations on January 1, 1978,
and provides  education loan servicing,  time sharing,  administration and other
services  to  lenders,   secondary  market  purchasers  and  Guarantee  Agencies
throughout the United States.

                                       4
<PAGE>

INFORMATION ON THE NOTES AND ELIGIBLE LOANS

               In  accordance  with the  Indenture,  the  Company is required to
provide information periodically to the Trustee regarding the Notes and Eligible
Loans,  which information is then forwarded to registered  holders of the Notes.
Provided  below  is  selected  information  as of  December  31,  2001  that was
previously  provided to holders of the Notes,  as well as additional  components
not previously  reported.  Although the information set forth below has not been
independently  verified by third parties, the Company believes it to be accurate
to the best of its knowledge.

               The principal  balance of Eligible  Loans as of December 31, 2001
was  $1,905,393,356.  Set  forth in Table A below is the  aggregate  outstanding
principal amount of Notes of each Class as of December 31, 2001.
<TABLE>
<CAPTION>

                                            TABLE A
                   ORIGINAL PRINCIPAL AMOUNT OF NOTES ISSUED BY THE COMPANY
                   AND THE OUTSTANDING AGGREGATE PRINCIPAL AMOUNT PER CLASS
                                     (DECEMBER 31, 2001)
                                                                                Principal Outstanding
Series       Class     Date Issued         Maturity Dates        Original      as of December 31, 2001
<C>            <C>          <C>                    <C>           <C>                 <C>
2000         A-1       June 1, 2000       December 1, 2032       $50,000,000         $50,000,000
2000         A-2       June 1, 2000       December 1, 2032        50,000,000          50,000,000
2000         A-3       June 1, 2000       December 1, 2032        50,000,000          50,000,000
2000         A-4       June 1, 2000       December 1, 2032        50,000,000          50,000,000
2000         A-5       June 1, 2000       December 1, 2032        50,000,000          50,000,000
2000         A-6       June 1, 2000       December 1, 2032        50,000,000          50,000,000
2000         A-7       June 1, 2000       December 1, 2032        50,000,000          50,000,000
2000         A-8       June 1, 2000       December 1, 2032        75,000,000          75,000,000
2000         A-9       June 1, 2000       December 1, 2032        75,000,000          75,000,000
2000         A-10      June 1, 2000       December 1, 2032        75,000,000          75,000,000
2000         A-11      June 1, 2000       December 1, 2032        75,000,000          75,000,000
2000         A-12      June 1, 2000       December 1, 2032       100,000,000         100,000,000
2000         A-13      June 1, 2000       December 1, 2032       100,000,000         100,000,000
2000         A-14      June 1, 2000       December 1, 2032       100,000,000         100,000,000
2000         B-1       June 1, 2000       December 1, 2032        50,000,000          50,000,000
2001         A-1       April 2, 2001      July 1, 2012           480,000,000         480,000,000
2001         A-2       September 4, 2001  June 1, 2035            50,000,000          50,000,000
2001         A-3       September 4, 2001  June 1, 2035            50,000,000          50,000,000
2001         A-4       September 4, 2001  June 1, 2035            75,000,000          75,000,000
2001         A-5       September 4, 2001  June 1, 2035           100,000,000         100,000,000
2001         A-6       September 4, 2001  June 1, 2035           100,000,000         100,000,000
2001         A-7       September 4, 2001  June 1, 2035           100,000,000         100,000,000
2001         B-1       September 4, 2001  June 1, 2035            37,500,000          37,500,000
2001         B-2       September 4, 2001  June 1, 2035            37,500,000          37,500,000
                                                              --------------      --------------
                                                              $2,030,000,000      $2,030,000,000
</TABLE>

                                       5
<PAGE>

               Set  forth  in  Table B  below  is the  interest  rate  for  each
outstanding  Class  of Notes as of  December  31,  2001.  The  interest  rate is
calculated based on the applicable  Auction Rate. The term "Auction Rate" refers
to the rate of  interest  per annum  that  results  from  implementation  of the
auction procedures as described in the Indenture.


                                   TABLE B
                     APPLICABLE INTEREST RATE PER CLASS
                          (as of December 31, 2001)

                   CLASS                     CALCULATION METHOD
                   -----                     ------------------
                                                AUCTION RATE
                  2000A-1                          2.120%
                  2000A-2                          2.200%
                  2000A-3                          2.150%
                  2000A-4                          2.150%
                  2000A-5                          2.300%
                  2000A-6                          2.400%
                  2000A-7                          2.120%
                  2000A-8                          2.240%
                  2000A-9                          2.150%
                  2000A-10                         2.100%
                  2000A-11                         2.280%
                  2000A-12                         2.150%
                  2000A-13                         2.350%
                  2000A-14                         2.200%
                  2000B-1                          2.170%
                  2001A-2                          2.110%
                  2001A-3                          2.300%
                  2001A-4                          2.110%
                  2001A-5                          2.200%
                  2001A-6                          2.150%
                  2001A-7                          2.200%
                  2001B-1                          2.120%
                  2001B-2                          2.200%

                                                 FIXED RATE
                  2001A-1                           5.76%



                                       6
<PAGE>

               Set forth in the tables below are the characteristics of Eligible
Loans held in the Trust Estate on December 31,  2001.  Although the  information
set forth  below  has not been  independently  verified  by third  parties,  the
Company believes it to be accurate to the best of its knowledge.

                                     TABLE C
                       COMPOSITION OF THE ELIGIBLE LOANS &
                            DISTRIBUTION BY LOAN TYPE
                            (as of December 31, 2001)




                                                  Outstanding  Percent of Loans
                                                  Principal     By Outstanding
                      Loan Types                   Balance         Balance
                      ----------                   -------         -------

           Consolidated                          $709,753,461         37.25%
           PLUS                                    27,285,168          1.43
           SLS                                      9,274,505           .49
           Stafford-Subsidized                    527,793,980         27.70
           Stafford-Unsubsidized                  631,286,242         33.13
                                                  -----------         -----

                 Total                         $1,905,393,356        100.00%
                                               ==============        ======


           Number of Borrowers                       192,335
           Average Outstanding Principal
                  Balance Per Borrower                $9,907
           Number of Loans                           345,725
           Average Outstanding Principal
                  Balance Per Loan                    $5,511
           Approximate Weighted Average
                  Remaining Term (Months)                146



                                       7
<PAGE>


                                     TABLE D
               DISTRIBUTION OF THE ELIGIBLE LOANS BY INTEREST RATE
                            (as of December 31, 2001)


                                      Outstanding         Percent of Loans
                                       Principal          By Outstanding
        Interest Rate Range             Balance               Balance
        -------------------             -------               -------

         Less than 7.50%          $1,331,646,944                69.88%
         7.50% to 7.99%               73,913,828                 3.88
         8.00% to 8.49%              296,053,305                15.54
         8.50% to 8.99%                   26,250                  .00
         9.00% to 9.49%              195,230,241                10.25
         9.50% or greater              8,522,788                  .45
                                  --------------               ------

            Total                 $1,905,393,356               100.00%
                                  ==============               ======


                                     TABLE E
               DISTRIBUTION OF THE ELIGIBLE LOANS BY SCHOOL TYPES
                            (as of December 31, 2001)


                                        Outstanding      Percent of Loans
                                         Principal       By Outstanding
                 School Type              Balance            Balance
                 -----------              -------            -------

           2-Year                       $71,431,031             3.75%
           4-Year                     1,053,837,800            55.31
           Proprietary                   53,152,780             2.79
           Unknown                       17,218,284              .90
           Consolidation                709,753,461            37.25
                                        -----------            -----

                   Total             $1,905,393,356           100.00%
                                     ==============           ======


COMPETITION

               The  Company  experiences  competition  from  banks  and  savings
associations  and other  private  companies,  non-profit  companies,  trusts and
financial  firms  issuing  debt  securities  the  proceeds  of which are used to
purchase pools of student loans. Many of these entities have greater  financial,
technical,  management and other  resources  than does the Company.  The Company
believes  that key  factors in its  ability to  compete  will be its  ability to
purchase  Eligible Loans and its ability to structure notes or other  securities
in a manner which will be competitive with securities offered by competitors.

EMPLOYEES

               The Company does not employ any employees. The Company and NELnet
have  entered  into an  Administrative  Services  Agreement  which is more fully
described in ITEM 13 hereof.  The Company does not plan to hire any employees in
the next fiscal year.


                                       8
<PAGE>

ITEM 2. PROPERTIES

               The Company has no materially important physical properties.

ITEM 3. LEGAL PROCEEDINGS

               None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

               No matters were  submitted to a vote of security  holders  during
               the fourth quarter of the fiscal year ended December 31,
2001.


                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

               The Company is a wholly owned  subsidiary of NELnet.  There is no
public trading market for the Company's common stock.

               As of April 1,  2002,  NELnet was the only  record  holder of the
Company's  outstanding  shares of common  stock.  The Company paid  dividends on
December 31, 2001 in the amount of $5,500,000.



                                       9
<PAGE>


ITEM 6. SELECTED FINANCIAL DATA

               The following table sets forth the Company's  selected  financial
data as of December  31, 2001 and for the period June 1, 2000  through  December
31, 2000. This information has been derived from the financial statements of the
Company  which have been  audited by KPMG LLP. The  information  below should be
read in conjunction  with the Financial  Statements and notes thereto  appearing
elsewhere in this document.

                        NELNET STUDENT LOAN CORPORATION-2
                             SELECTED FINANCIAL DATA

                                                  Year Ended       Period Ended
STATEMENT OF OPERATIONS DATA:                    December 31,       December 31,
                                                     2001             2000 (1)
                                                     ----             --------
Revenues:
    Loan interest..........................     $ 100,455,019      $ 46,225,110
    Investment interest....................         1,743,425         2,174,126
    Other..................................           198,289            80,481
                                                  -----------        ----------
            Total revenues.................       102,396,733        48,479,717
                                                  -----------        ----------
Expenses:
    Interest on notes payable..............        68,190,154        39,401,390
    Loan servicing fees to related party...        13,586,370         5,414,538
    Trustee and broker fees................         3,311,175         1,621,060
    Amortization of debt issuance costs....           344,311            78,537
    Amortization of loan premiums and
    lender fees............................         4,434,839         1,652,178
    Provision for loan losses..............         1,600,000         1.010,000
    Other general and administrative ......         2,767,940         1,147,800
                                                  -----------        ----------
            Total expenses.................        94,234,789        50,325,503
                                                  -----------        ----------
            Income (loss) before income tax
            expense (benefit)  ............         8,161,944        (1,845,786)

Income tax expense (benefit) ..............         2,938,300          (664,483)
                                                  -----------        ----------
            Net income (loss) .............     $   5,223,644    $   (1,181,303)
                                                =============    ==============

Ratio of earnings to fixed charges.........            1.12%             .95%(2)

BALANCE SHEET DATA:
Cash and cash equivalents .................        $    8,093      $ 1,008,671
Restricted cash - held by trustee .........        46,135,799       24,532,423
Student loans receivable, net..............     1,933,941,068      942,498,737
Total assets...............................     2,044,931,717    1,003,025,980
Notes payable .............................     2,030,000,000    1,000,000,000
Total liabilities..........................     2,040,788,376    1,004,206,283
Stockholder's equity (deficit).............         4,143,341       (1,180,303)

    (1)  The Company  was  incorporated  on October 8, 1999.  The Company
         commenced its business operations on June 1, 2000.

    (2)  Earnings  were  inadequate  to cover fixed charges by $1,845,786
         for the period ended December 31, 2000.


                                       10
<PAGE>

ITEM 7. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

               The  following   discussion  and  analysis   should  be  read  in
conjunction  with the  information  set forth under the caption  entitled  "ITEM
6.--SELECTED  FINANCIAL  DATA" and the  financial  statements  and notes thereto
included  elsewhere herein.  Moreover,  any forward looking statements should be
read in conjunction  with  information  set forth in "ITEM 1 -- Forward  Looking
Statements."

GENERAL

               The  Company was formed on October 8, 1999 solely for the purpose
of acquiring,  from time to time,  Eligible Loans and issuing notes, such as the
Notes,  secured by such Eligible  Loans.  Since its  inception,  the Company has
issued three (3) series of Notes  consisting of  twenty-four  (24) classes.  The
Notes  shown  in the  financial  statements  of the  Company  represent  limited
obligations of the Company secured solely by the Eligible Loans and other assets
in the Trust Estate.

               The assets of the Company consist primarily of Eligible Loans. At
December 31, 2001,  the Company held  approximately  $1,905,400,000  in Eligible
Loans.  The initial  issuance of Notes occurred on June 1, 2000 in the amount of
$1,000,000,000. There were two additional issuances in 2001, on April 2, 2001 in
the  amount  of  $480,000,000  and  on  September  4,  2001  in  the  amount  of
$550,000,000.

SIGNIFICANT ACCOUNTING POLICIES

               The notes to the  financial  statements  contain a summary of the
Company's  significant  accounting  policies.  Certain  of  these  policies  are
considered  to  be  important  to  the  portrayal  of  the  Company's  financial
condition,  since they may  require  management  to make  difficult,  complex or
subjective  judgments,  some of which may relate to matters that are  inherently
uncertain.  The Company's significant accounting policy is determining the level
of the allowance for loan losses.  Additional  information about this policy can
be found in Note 1 to the financial statements.

ALLOWANCE FOR LOAN LOSSES

               The allowance for loan losses represents management's estimate of
probable  losses on Eligible Loans held in the Trust Estate and pledged to repay
the  Notes.  This  evaluation  process  is subject  to  numerous  estimates  and
judgments.  In making such  estimates and judgments,  management  considers such
things  as the  value  and  character  of  loans  outstanding,  past  loan  loss
experience and general economic  conditions.  The allowance for credit losses is
determined  via a process  that begins  with  estimates  of  probable  losses on
Eligible  Loans held in the Trust  Estate,  based upon a  statistical  analysis.
Historical  delinquencies  and credit loss  experience is applied to the current
aging of the portfolio,  together with analyses that reflect  current trends and
conditions.

               The allowance for loan losses reflects  assumptions and estimates
the Company believes are reasonable in light of historical loan losses and known
trends with respect to Eligible Loans held in the Trust Estate.  However,  these
estimates and assumptions are inherently uncertain and there can be no guarantee
that  management's  estimates  and  assumptions  will  prove  correct  in future
periods.  Management  continually measures expected losses against actual losses
and assumptions are revised accordingly.  Moreover, changes in the estimates and
assumptions management uses to estimate the allowance for loan losses could have
a direct  impact on the  amount of the  allowance  and the  Company's  financial
condition in future periods.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2001 COMPARED TO PERIOD ENDED DECEMBER 31, 2000

               REVENUES. Revenues for the year ended December 31, 2001 consisted
primarily  of interest  earned on student  loans,  which  totaled  $100,455,019,
compared to  $46,225,110  for the period ended December 31, 2000, an increase of
117.32%. The increase in revenues is directly attributable to the acquisition of
additional student loans by the Company in the second and third quarters of 2001
along with the  financial  results on a full year of  business  activity in 2001
compared to seven  months of business  activity in 2000.  The amount of interest
reported  for each  period  was  derived  from  Eligible  Loans in an  aggregate
principal amount, net of allowance for loan losses and unamortized  premiums, of
$1,933,941,068  at December 31, 2001,  compared to  $942,498,737 at December 31,
2000.  The  Company's  average net  investment  in student loans during the year
ended  December  31,  2001  was  $1,422,838,180  (excluding  funds  held  by the


                                       11
<PAGE>
Trustee),  compared to $891,888,250  for the period ended December 31, 2000, and
the average  effective annual interest rate of interest income on Eligible Loans
was 7.06% for the year ended December 31, 2001, compared to 8.88% for the period
ended  December 31, 2000,  respectively.  The decrease in the  effective  annual
interest  rate of  interest  income on student  loans is a direct  result of the
declining  interest  rate  environment  during 2001 and the "floor  rate" on the
student  loan assets being reset  annually on July 1. The Company also  received
investment interest and other income for the year ended December 31, 2001 in the
amounts of $1,743,425  and $198,289,  respectively,  compared to $2,174,126  and
$80,481,  respectfully,  for the period ended December 31, 2000. The decrease in
investment  interest  was a result of the  restricted  cash  being  utilized  to
acquire  student loans along with lower  interest  rates on  investments  in the
current fiscal year.

               EXPENSES. Expenses for the year ended December 31, 2001 consisted
primarily  of  interest  on  the  Company's   outstanding  Notes  which  totaled
$68,190,154,  compared to $39,401,390 for the period ended December 31, 2000, an
increase of 73.07% . The amount of interest expense  reported depends  primarily
upon the amount of Notes outstanding  during the years and the interest rates on
such Notes.  This increase in expenses is directly  attributable to the issuance
of  additional  Notes in the  second and third  quarters  of 2001 along with the
financial  information  on a full year of  business  activity  compared to seven
months of business  activity in 2000. The Company's average debt outstanding was
approximately  $1,543,000,000 for the year ended December 31, 2001,  compared to
debt  outstanding of  $1,000,000,000  for the period ended December 31, 2000 and
the average annual cost of borrowings was approximately 4.42% for the year ended
December 31, 2001, compared to approximately 6.75% for the period ended December
31, 2000.  The  decrease in the average  annual cost of  borrowings  is a direct
result of a declining  interest rate  environment  during 2001. The Company also
incurred loan servicing fees to a related party in the amount of $13,586,370 for
the year ended  December 31, 2001,  compared to $5,414,538  for the period ended
December 31, 2000. See "ITEM 13--CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS"
for a  description  of  the  Servicing  Agreement  and  Administrative  Services
Agreement pursuant to which such fees are owed. Loan servicing fees to a related
party were higher in 2001  because the Company  held,  on average,  more student
loans in 2001 and  incurred a full year of servicing  costs.  Trustee and broker
fees,  amortization of debt issuance costs and amortization of loan premiums and
lender  fees for the year  ended  December  31,  2001  amounted  to  $3,311,175,
$344,311  and  $4,434,839  respectively,  compared  to  $1,621,060,  $78,537 and
$1,652,178  respectively,  for the period ended December 31, 2000. The increases
are  attributable  to the issuance of  additional  Notes in the second and third
quarters  of 2001 and a  comparison  of a full year of expenses in 2001 to seven
months of expenses in 2000.  Amortization of loans premiums and lender fees also
increased due to an increase in the rate of amortization based on an increase in
principal  payments on the loans as a greater  percentage of the loan  portfolio
that is in  repayment  status.  Provision  for loan  losses  for the year  ended
December 31, 2001 amounted to $1,600,000,  compared to $1,010,000 for the period
ended  December 31, 2000.  Additional  amounts were  recognized as provision for
loan losses in order to reflect the appropriate  allowance amounts in comparison
to the estimated  defaults.  Other general and  administrative  expenses for the
year ended December 31, 2001 amounted to $2,767,940,  compared to $1,147,800 for
the period  ended  December  31,  2000.  This  increase is due to an increase in
administrative  fees incurred to the parent as the average  outstanding  student
loan balances  increased in 2001 along with a full year of expenses  reported in
2001 compared to seven months in 2000.

               INCOME TAX EXPENSE. The Company has recognized income tax expense
of  $2,938,300  for the year ended  December 31, 2001  compared to an income tax
benefit of $664,483  for the period  ended  December  31,  2000.  The income tax
expense was a result of net income being  realized  for the year ended  December
31, 2001 compared  with the net loss realized for the period ended  December 31,
2000.  The  effective  tax rate utilized by the Company to recognize a provision
for income taxes was 36%. The  effective tax rate will be adjusted in the future
for changes to the corporate tax regulations.

               NET INCOME. The Company had net income of $5,223,644 for the year
ended  December  31, 2001  compared to a net loss of  $1,181,303  for the period
ended December 31, 2000. The net income is attributable to a higher net interest
margin on student loans due to the declining  interest rates on the Notes during
the period while the "floor rate" on student loan assets is determined  annually
on July 1.  Consequently,  in a  declining  interest  rate  environment  the net
interest  margin  increases  and  in  a  rising  interest  rate  environment  it
decreases.  The net interest margin increased by $25,441,145 from $6,823,720 for
the period ended  December 31, 2000 to  $32,264,865  for the year ended December
31, 2001.  The net loss for the period ended December 31, 2000 resulted from the
pre-funding  of a portion of the Series 2000 Notes,  establishing  the allowance
for loan loss and  amortization  expense  related to student loan premiums being
higher than expected.

               For the year ended  December 31,  2001,  there were no unusual or
infrequent  events or  transactions  or any  significant  economic  dangers that
materially affected the amount of reported income.

                                       12
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

               Eligible  Loans held by the Company are pledged as collateral for
the Notes,  the terms of which provide for the  retirement of all Notes from the
proceeds of the Eligible Loans.  Cash flows from payments on the Eligible Loans,
together with proceeds of reinvestment  income earned on the Eligible Loans, are
intended to provide cash  sufficient to make all required  payments of principal
and interest on each outstanding  series of Notes. The Indenture under which the
Notes were issued also  creates a Reserve  Fund from which money can be drawn to
make payments or interest and principal on the Notes.  The Reserve Fund is fully
funded under the terms of the  Indenture and the Company  anticipates  that cash
flows  generated  from  its  Eligible  Loans  will be  sufficient  to  meet  the
obligation on its outstanding Notes.

               It is  anticipated  that regular  payments under the terms of the
Eligible Loans, as well as early prepayment,  will reduce the number of Eligible
Loans held in the Trust Estate. The Company is authorized under the Indenture to
use principal receipts from Eligible Loans to purchase additional Eligible Loans
until July 1, 2004.

               Scheduled  payments on the Company's notes payable will be made ,
only to the extent funds are available. Assuming funds are available,  scheduled
payments are due as follows:

           2002                                   $           --
           2003                                       48,000,000
           2004                                       89,760,000
           2005                                       84,000,000
           2006                                       84,000,000
           2007 and thereafter                     1,724,240,000
                                                   -------------
                                                  $2,030,000,000

               Management's  expectations are that future cash flows provided by
operating activities will be sufficient to meet the Company's  obligations.  For
further  discussion of the above  obligations,  refer to Note 4 of the financial
statements.

IMPACT OF INFLATION

               For the year ended  December  31,  2001,  cost  increases  to the
Company were not materially impacted by inflation.

ITEM 7A.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

               The Company's  assets consist  almost  entirely of student loans.
Those student loans are subject to market risk in that the cash flows  generated
by the student loans can be affected by changes in interest  rates.  The student
loans  generally  bear  interest at a rate equal to the average bond  equivalent
rates of weekly  auctions of 91-day  Treasury  bills (the "91-day  Treasury Bill
Rate") plus a margin  specified for each student loan.  Thus, if interest  rates
generally  increase,  the Company  would expect to earn greater  interest on its
student  loans,  and if interest  rates  generally  decrease,  the Company would
expect the interest  that it earns to be reduced.  The Company does not hold any
of its assets for trading purposes.

               The Company  attempts to manage its interest rate risk by funding
its portfolio of student loans with  variable rate debt  instruments.  The Notes
bear  interest  at a rate  that  is  reset  periodically  by  means  of  auction
procedures.  By funding its student loans with variable rate Notes,  the Company
attempts to maintain a positive  "spread"  between  the  interest  earned on its
student loans and its interest payment  obligations under the Notes. Thus, in an
environment of generally  declining interest rates, the Company should earn less
interest on its student loans, but the interest expense on the Notes should also
be lower.

               The interest  rates on each series of Auction Rate Notes is based
generally  on the outcome of each  auction of such series of Notes.  The student
loans,  however,  generally bear interest at the 91-day  Treasury Bill Rate plus
margins specified for such student loans. As a result of the differences between
the  indices  used to  determine  the  interest  rates on student  loans and the
interest  rates on the Notes,  there  could be periods of time when the rates on
student  loans are  inadequate  to  generate  sufficient  cash flow to cover the
interest on the Notes and the expenses  required to be paid under the Indenture.
In a period  of  rapidly  rising  interest  rates,  auction  rates may rise more
quickly than the 91-day  Treasury  Bill Rate. If there is a decline in the rates
on student  loans,  the funds  deposited into the trust estate created under the
Indenture  may be  reduced  and,  even if there is a  similar  reduction  in the
variable  interest  rates  applicable  to any  series  of  Notes,  there may not
necessarily be a similar  reduction in the other amounts required to be paid out
of such funds (such as administrative expenses).

                                       13
<PAGE>

               As  shown  by the  chart  below,  the  Company  has  conducted  a
sensitivity  analysis to determine what effect different changes in the interest
rates on  student  loans  and the  Notes  would  have on its cash  flows and its
resulting  ability  to  pay  the  principal  and  interest  due  on  the  Notes.
Historically,  the majority of the Company's Notes have borne interest at a rate
that  approximates  1 Month LIBOR.  Generally,  student loans bear interest at a
rate based on the 91-day Treasury Bill Rate. Thus, the Company's analysis of the
effect of  different  interest  rates on its cash  flows was  prepared  assuming
spreads of 10, 30, 40, 60, 80 and 100 basis points between 91-day Treasury Bills
and 1 Month LIBOR (the  "NELNET-2  Ted  Spread").  The NELNET-2 Ted Spreads were
then  applied at different  rates of interest to  determine  their effect on the
"spread"  between the  interest the Company  earns on its student  loans and its
interest payment obligations under the notes (the "NELNET-2 Net Spread").
<TABLE>
<CAPTION>

--------------- ------------------------------------------------------------------------------------
   T-BILL*                                      NELNET-2  NET SPREAD

                ------------ ------------ ------------- -------------- -------------- --------------
<S> <C>             <C>          <C>           <C>           <C>            <C>            <C>
    7.00%           1.13%        .97%          .90%          .74%           .59%           .44%
                ------------ ------------ ------------- -------------- -------------- --------------
    6.00%           .89%         .74%          .66%          .51%           .36%           .20%
                ------------ ------------ ------------- -------------- -------------- --------------
    5.00%           .71%         .56%          .48%          .33%           .18%           .03%
                ------------ ------------ ------------- -------------- -------------- --------------
    4.00%           .63%         .47%          .40%          .25%           .09%           -.06%
                ------------ ------------ ------------- -------------- -------------- --------------
    3.00%           .60%         .45%          .37%          .22%           .07%           -.09%
                ------------ ------------ ------------- -------------- -------------- --------------
    2.00%           .56%         .41%          .34%          .18%           .03%           -.12%
                ------------ ------------ ------------- -------------- -------------- --------------

--------------- ------------------------- ------------- -------------- -------------- --------------
   NELNET-2
 TED SPREAD**        10           30            40            60             80             100
--------------- ------------------------------------------------------------------------------------
</TABLE>

*       91 Day T-Bill (Yield)
**      1 Month LIBOR vs. 91 Day T-Bill (Yield)

               Generally,  increases in the NELNET-2 Ted Spread and decreases in
interest  rates  have the  effect of  reducing  the  NELNET-2  Net  Spread,  and
correspondingly, the Company's cash flows. For example, as of March 27, 2002 the
1 Month LIBOR rate was 1.884% and the 91-day Treasury Bill Rate was 1.80%. Thus,
the NELNET-2 Ted Spread was approximately  eight basis points (1.884 - 1.80) and
the  NELNET-2  Net Spread was  approximately  56 basis  points.  If, at the same
interest  rate  (approximately  2.00%),  the NELNET-2 Ted Spread is increased to
100,  the  Company's  cash flows are  significantly  reduced,  as evidenced by a
NELNET-2 Net Spread of a negative  twelve basis  points.  The Company,  however,
believes that a NELNET-2 Ted Spread of 100 is unlikely to occur.


ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

               The  financial   statements  and  supplementary   financial  data
required  by this  ITEM 8 are set  forth  in ITEM  14 of  this  Form  10-K.  All
information which has been omitted is either inapplicable or not required.


ITEM  9.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE

               There were no adverse  opinions or  disclaimers  of opinion,  nor
were there any  modifications  as to  uncertainty,  audit scope,  or  accounting
principles rendered by the independent accountants.  There were no disagreements
with the  current  accounting  firm on any matter of  accounting  principles  or
practices, financial statement disclosure, or auditing scope or procedure. There
are no  changes  in or  disagreements  on  accounting  and  financial  statement
disclosure.  There are no other changes in or  disagreements  on accounting  and
financial statement disclosure.

                                       14
<PAGE>
                                    PART III

ITEM 10.       DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

               The  Company  is  governed  by a Board  of  Directors,  which  is
required by the Company's  Articles of  Incorporation  to include at least three
directors.  Directors  are required to be elected at each annual  meeting of the
shareholders.   The  present   directors  and  their   addresses  and  principal
occupations or affiliations are as follows:
<TABLE>
<CAPTION>
                                                                Principal      Officers and
                      Other                                     Occupation    Directors Term
Name of Director  Offices Held   Age          Address         or Affiliation    From   To*
----------------  ------------   ---          -------         --------------    ----   --
<S>                  <C>         <C>        <C>                 <C>             <C>       <C>
Michael S.          Chairman      38   6801 S. 27th Street    Chief           October   Present
Dunlap                                 P.O. Box 82529         Executive       1999
                                       Lincoln, Nebraska      Officer of
                                       68501                  Union Bank
                                                              and Trust
                                                              Company;
                                                              President,
                                                              Farmers &
                                                              Merchants
                                                              Investment,
                                                              Inc.;
                                                              Chairman,
                                                              NELnet, Inc.

Stephen F.          President     49   6991 East Camelback    Vice-Chairman,  October   Present
Butterfield                            Road, Suite B290       NELnet, Inc.;   1999
                                       Scottsdale, Arizona    President of
                                       85251                  Union
                                                              Financial
                                                              Services, Inc.

Jeffery R.            Vice        36   3015 S. Parker Road    Senior Vice     November  Present
Noordhoek          President,          Suite 400              President,      2001
                    Treasurer          Aurora, CO 80014       Capital
                  and Secretary                               Markets -
                                                              NELnet, Inc.

Ross Wilcox            --         59   4732 Calvert Street    Chairman of     October   Present
                                       Lincoln, Nebraska      the Board of    1999
                                       68506                  Union Bank
                                                              and Trust
                                                              Company

Dr. Paul R. Hoff       --         67   Hernia Hill, Rural     Retired         October   Present
                                       Route 1                Physician       1999
                                       Seward, Nebraska
                                       68434
</TABLE>
  -------------
  (*)  Each director holds office until the next annual meeting of shareholders
       following his or her election  until such  director's  successors  shall
       have been elected and  qualified.  The Company's  next annual meeting is
       scheduled for March, 2003.

EXECUTIVE MANAGEMENT

        The  Board of  Directors  and  executive  officers  described  below are
responsible for overall  management of the Company.  The Company's  officers and
directors are  shareholders,  officers and  directors of business  entities that
have engaged in the business of purchasing, holding and selling student loans.

        MICHAEL S. DUNLAP,  CHAIRMAN OF THE BOARD. As co-founder and chairman of
the board of both NELnet and Union Financial  Services Inc. ("UFS"),  Mr. Dunlap
is  responsible  for the overall  strategy and direction of the  companies.  Mr.
Dunlap is also the chief executive officer of Union Bank and Trust Company,  and
president of Farmers & Merchants Investment,  Inc. (the parent of Union Bank and
Trust Company).  Mr. Dunlap has been an employee of Union Bank and Trust Company
for  approximately  20  years  and  is  a  member  of  the  Nebraska  State  Bar
Association.  Mr. Dunlap  received his B.S. degree in finance and accounting and
his law degree from the University of Nebraska.

                                       15
<PAGE>

        STEPHEN F. BUTTERFIELD,  PRESIDENT AND DIRECTOR.  Stephen F. Butterfield
serves as the vice chairman of NELnet  assisting in the  executive  direction of
the company and managing its capital  market  relationships.  As co-founder  and
president of UFS, Mr.  Butterfield  directs the overall management and direction
of the company, including asset purchasing, marketing of corporate services, and
coordination of the company's  capital market  activities.  Mr.  Butterfield has
been a  member  of the  student  loan  industry  since  January  1989,  first as
president of a for-profit  student loan secondary  marketing facility located in
Scottsdale,  Arizona,  and second as president  of the Student Loan  Acquisition
Authority of Arizona, a non-profit  secondary  marketing facility in Scottsdale,
Arizona.  Prior to his work in the student loan industry,  Mr. Butterfield spent
15 years as an  investment  banker for  Boettcher  and Company  specializing  in
municipal  finance.  Mr.  Butterfield  received  his  B.S.  degree  in  business
administration from Arizona State University.

        JEFFERY R.  NOORDHOEK,  VICE  PRESIDENT,  TREASURER AND SECRETARY.  As a
Senior Vice President in the capital  markets area of NELnet,  Jeff Noordhoek is
responsible  for leading the company in its  securitization  and capital markets
funding efforts.  Mr. Noordhoek's  primary function is to raise low cost capital
and to design creative methods to finance the company's  student loan portfolios
through warehouse lines of credit, long-term  securitizations,  and private debt
arrangements. Mr. Noordhoek has been in the capital markets area of NELnet since
1996.  Prior to joining NELnet,  Mr.  Noordhoek served as a senior associate for
State  Street  Capital  Corporation  where he assisted in the  establishment  of
Clipper  Receivables  Commercial  Paper Conduit and the Clipper Blue  Tax-Exempt
financing  vehicles.  While at State Street, Mr. Noordhoek worked at its offices
in   Luxembourg,   Toronto,   and   Boston   where  he   successfully   executed
securitizations  in numerous asset classes.  Mr. Noordhoek  received his B.S. in
business  administration  from the  University  of Nebraska and his M.B.A.  from
Boston University.

        ROSS  WILCOX,  DIRECTOR.  Ross Wilcox has been with Union Bank and Trust
Company since 1966 and serves as chairman of its Board of Directors.  Mr. Wilcox
is the  chairman  of the  Lincoln  Chamber of  Commerce.  A graduate of Nebraska
Wesleyan University,  Mr. Wilcox now serves as a trustee for the University. Mr.
Wilcox also serves as trustee for Lighthouse (a youth intervention program), the
Lincoln Public Schools  Foundation,  and Bryan LGH Medical Center. Mr. Wilcox is
also on the Board of Directors for the Lincoln Country Club.

        DR.  R. PAUL  HOFF,  DIRECTOR.  Dr. R. Paul Hoff has  worked as a family
practice physician in Seward, NE for 35 years. In addition,  Dr. Hoff has served
as a past member of Admissions  Board of University of Nebraska  Medical  School
and the Deans  Advisory  Board.  Dr. Hoff  currently  acts as a board member for
Stratus  Mutual Fund and  Security  Home Bank,  and as a past board  member for:
Hawkeye Bank Corp., NEBHELP and Nelnet Loan Services.

               The  Company's  executive  officers  are elected  annually by the
Board of  Directors  and serve at the  discretion  of the Board.  The  Company's
directors  hold office until the next annual meeting of  stockholders  and until
their successors have been duly elected and qualified.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

               Section  16(a)  of the  Securities  Exchange  Act of  1934 is not
applicable to the Company, because the Company has no class of equity securities
registered pursuant to Section 12 thereof.


ITEM 11.       EXECUTIVE COMPENSATION

               The  Company's  executive  officers  are not  compensated  by the
Company for services rendered by them,  although some of the Company's  officers
are compensated by NELnet, which receives remuneration from the Company pursuant
to an Administrative Services Agreement by and between NELnet and the Company. A
detailed  description of the  Administrative  Services Agreement is set forth in
ITEM 13 of this Form 10-K.

AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES IN 2001

               The Company has not issued any options.

                                       16
<PAGE>

LONG-TERM INCENTIVE PLAN AWARDS IN 2001

               The Company has no long-term incentive plan.

DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE IN 2001

               The Company has no such benefit plans.

EMPLOYMENT AGREEMENTS

               The Company has not entered into any employment agreements.

DIRECTOR COMPENSATION

               Directors of the Company are not  compensated  as directors,  but
may  receive   reimbursement  of  out-of-pocket   expenses  in  connection  with
attendance at Board meetings.

OFFICER COMPENSATION

               The Company has not adopted a compensation plan for officers.

BOARD MEETINGS

               During fiscal year 2001, the Board held three regular meetings.

COMMITTEES OF THE BOARD

               The Board of Directors has not  established an Audit Committee or
a Compensation Committee.


ITEM 12.       SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

               As of April 1, 2002,  there were  1,000  shares of the  Company's
common stock, no par value,  outstanding,  all of which were held by NELnet.  No
director or  executive  officer  owns any shares of the Company and there are no
other beneficial owners.

CHANGES IN CONTROL.

               The Company knows of no arrangement,  including the pledge by any
person of  securities of the Company,  which may at a subsequent  date result in
change of control of the Company.


ITEM 13.       CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

               ADMINISTRATIVE  SERVICES  AGREEMENT.  The Company and NELnet, the
Company's parent corporation,  entered into an Administrative Services Agreement
(the "Agreement") dated as of June 1, 2000.
  Under the Agreement, NELnet agreed: (i) to furnish or cause to be furnished to
the Company or the Trustee copies of reports received with respect to the Loans,
and prepare such additional  reports with respect to the Loans as the Company or
the  Trustee  may  reasonably  request  from time to time;  (ii) to  respond  to
inquiries and requests made by borrowers,  educational  institutions,  Guarantee
Agencies,  the Trustee,  and other parties with respect to the Loans and respond
to requests by the Company's independent auditors for information concerning the
Company's financial affairs;  (iii) to maintain financial records concerning the
Loans and, if furnished  adequate  information with respect to financial affairs
not related to the Loans,  prepare and maintain a general  ledger and  financial
statements  for the  Company;  (iv)  provide  instructions  to the Trustee  with
respect to the  administration  of the Loans;  (v) to prepare for and furnish to
the  Company  such  statistical  reports  and cash  flow  projections  as may be
required  under the  Indenture or requested by the Company;  and (vi) to provide
such other services with respect to administration of its program as the Company
may reasonably  request.  The Agreement  expires upon the stated maturity of the
Notes. In return for the services provided by NELnet, the Company pays to NELnet
on the first day of each calendar month an amount equal to 0.015% of the average
outstanding  balance of the Loans during the preceding  month. The obligation of
the  Company  to pay fees  under the  Agreement  is a limited  obligation  to be
satisfied solely from distributions made by the Trustee to the Company under the
terms of the  Indenture.  Although the Company is obligated to pay to NELnet the
full amount of all accrued fees, such payments are made exclusively from amounts
deposited in the  Operating  Fund for payment of the Company's  Maintenance  and

                                       17
<PAGE>
Operating  Expenses (as defined in the Indenture).  If the Company does not have
funds on hand to cover the full amount of the fees due under the Agreement, then
payment of the unpaid  balance is  deferred  until  there are  sufficient  funds
available  from such sources to satisfy part, or all, of the  outstanding  debt.
The fee payable to NELnet under the  Agreement  may be revised on each January 1
during the term of the Agreement.  To alter the fee, NELnet must provide written
notice of the proposed new fee to the Company ninety (90) days prior to the next
January 1. If NELnet and the Company cannot reach an agreement within sixty (60)
days of the receipt of the notice, either party may terminate the Agreement upon
thirty (30) day's written notice to the other party.

               SERVICING  AGREEMENT.  The  Company  and  NELnet  entered  into a
Servicing Agreement (the "Servicing  Agreement") dated as of June 1, 2000. Under
the Servicing Agreement,  NELnet services the Eligible Loans. NELnet owns all of
the  issued  and  outstanding   stock  of  the  Company.   NELnet  entered  into
subservicing  agreements  with Nelnet Loan  Services,  Inc.  (the  "Subservicing
Agreement") dated as of June 1, 2000. Under the Subservicing  Agreement,  Nelnet
Loan Services, Inc., as Subservicer,  assumes substantially all of the duties of
the  Servicer  under  the  Servicing  Agreement  for the  term of the  Servicing
Agreement.  The Company  believes that the terms and conditions of the Servicing
Agreement (and the subservicing  arrangement) are comparable to those offered by
or available to unrelated  parties.  The  servicing  fee to NELnet is calculated
using an annual  asset-based charge that ranges from 0.60 to 1.25 percent of the
student  loan  principal  balance,  depending  on the type of  loan,  calculated
monthly.

               STUDENT LOAN  PURCHASE  AGREEMENTS.  The Company has entered into
Student Loan Purchase Agreements with various financial institutions  including,
but not limited to, Union Bank and Trust Company,  NEBHELP,  Inc., MELMAC,  LLC,
NHELP-I,  Inc., NHELP-III,  Inc., and NELNET Student Loan Corporation-1 pursuant
to which the Company has purchased Eligible Loans.  NEBHELP,  Inc., MELMAC, LLC,
NHELP-I,  Inc.,  NHELP-III,  Inc.  and NELNET  Student  Loan  Corporation-1  are
subsidiary  corporations of NELnet.  Certain of the  shareholders of Nelnet Loan
Services,  Inc. also hold an interest in the bank holding  company that owns and
controls Union Bank and Trust Company, and certain of the officers and directors
of the Company are also officers and directors of Union Bank and Trust  Company.
Although the above mentioned entities are related to the Company as described in
the paragraph  above,  the Company believes that the terms and conditions of the
Student Loan Purchase Agreements are comparable to those offered by or available
to unrelated parties.

                                     PART IV

ITEM 14.       EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

FINANCIAL STATEMENTS

               The financial statements and financial statement  information and
schedules  required by this Item are included in this report  commencing on page
F-1. The Independent  Auditors'  Report appears on page F-1 of this report.  All
other schedules have been omitted because they are  inapplicable,  not required,
or the  information is included  elsewhere in the financial  statements or notes
thereto.

EXHIBITS
               All exhibits listed hereunder,  unless otherwise indicated,  have
previously  been  filed as  exhibits  to the  Company's  Registration  Statement
declared  effective in February,  2000.  Such  exhibits have been filed with the
Commission  pursuant  to  the  requirements  of  the  Acts  administered  by the
Commission. Such exhibits are incorporated herein by reference under Rule 12b-23
of the Securities Exchange Act of 1934.

               The following is a complete list of exhibits filed as part of the
Company's  Registration Statement and this Form 10-K. Exhibit numbers correspond
to the numbers in the Exhibit Table of Item 601 of Regulation S-K.


   Exhibit No.          Description
   -----------          -----------

          3.1  Articles of Incorporation of the Company (Incorporated by
               reference herein to the Company's Quarterly Report on Form 10-Q
               for the period ended June 30, 2000.)

                                       18
<PAGE>

          3.3  Bylaws of the Company (Incorporated by reference herein to the
               Company's  Quarterly  Report on Form 10-Q for the period  ended
               June 30, 2000.)

          4.1  Indenture of Trust by and between the Company and Zions First
               National Bank, dated as of June 1, 2000 (Incorporated by
               reference  herein to the Company's  current report on Form 8-K,
               filed June 16, 2000.)

          4.2  Series 2000  Supplemental  Indenture by and between the Company
               and  Zions  First  National  Bank,  dated  as of June  1,  2000
               (Incorporated  by  reference  herein to the  Company's  current
               report on Form 8-K, filed June 16, 2000.)

          4.3  Series 2001A Supplemental Indenture of Trust by and between the
               Company and Zions  First  National  Bank,  dated as of April 1,
               2001 (Incorporated by reference herein to the Company's current
               report on Form 8-K, filed April 16, 2001.)

          4.4  Series 2001B Supplemental Indenture of Trust by and between the
               Company and Zions First National Bank, dated as of September 1,
               2001 (Incorporated by reference herein to the Company's current
               report on Form 8-K, filed September 7, 2001.)

         10.1  Servicing Agreement, dated as of June 1, 2000, by and between
               the Company and NELnet, Inc. (Incorporated by reference herein
               to the Company's  Quarterly  report on Form 10-Q for the period
               ended June 30, 2000.)

         23.1  Consent of KPMG LLP to the  incorporation  by  reference of the
               Company's financial statements as of December 31, 2001 and 2000
               and for the year ended December 31, 2001 and the period June 1,
               2000 through December 31, 2000, into the Company's Registration
               Statement on Form S-3 (File No. 333-93865).*

            *  Filed herewith


REPORTS ON FORM 8-K

               The  Company did not file any reports on Form 8-K during the last
quarter of the period covered by this report.


                                       19
<PAGE>


                          INDEX TO FINANCIAL STATEMENTS


FINANCIAL STATEMENTS OF NELNET STUDENT LOAN CORPORATION-2

Independent Auditors' Report.................................................F-1

Balance Sheets as of December 31, 2001 and 2000..............................F-2

Statements of Operations for the year ended December 31, 2001 and the
period June 1, 2000 through December 31, 2000................................F-3

Statements of Stockholder's Equity (deficit) for the year ended
December 31, 2001 and the period June 1, 2000 through December 31, 2000..... F-4

Statements of Cash Flows for the year ended December 31, 2001 and the
period June 1, 2000 through December 31, 2000................................F-5

Notes to Financial Statements................................................F-6


All other  schedules  are  omitted as they are not  applicable  or the  required
information is shown in the financial statements or notes thereto.


                                       20
<PAGE>

                                   SIGNATURES


               Pursuant  to the  requirements  of  Section  13 or  15(d)  of the
Securities  Exchange Act of 1934,  the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.


                                     NELNET STUDENT LOAN CORPORATION-2


                                     By: /s/ Michael S. Dunlap
                                        -------------------------
                                        Michael S. Dunlap, Chairman of the Board
                                        (Principal Executive Officer)

                                     Date:  April 1, 2002


                                     By: /s/ Jeffery R. Noordhoek
                                        ----------------------------
                                        Jeffery R. Noordhoek, Vice President
                                        (Principal Financial and Accounting
                                        Officer)

                                     Date:  March 29, 2002


               Pursuant to the  requirements  of the Securities  Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the registrant and in the capacities and on the dates indicated.

                 Signature                  Title                  Date
                 ---------                  -----                  ----

By: /s/ Michael S. Dunlap        Chairman of the Board        April 1, 2002
    ------------------------     (Principal Executive
      Michael S. Dunlap          Officer)


By: /s/ Stephen F. Butterfield   President and Director       March 29, 2002
    ------------------------
      Stephen F. Butterfield


By: /s/ Jeffery R. Noordhoek     Vice-President, Secretary,   March 29, 2002
    ------------------------     Treasurer and Director
      Jeffery R. Noordhoek       (Principal Financial and
                                  Accounting Officer)


By:                              Director
    -------------------------
      Ross Wilcox

By:  /s/ Dr. Paul Hoff           Director                     March 29, 2002
    -------------------------
      Dr. Paul Hoff





                                       21
<PAGE>

                        NELNET STUDENT LOAN CORPORATION-2
                   (a wholly owned subsidiary of NELnet, Inc.)

                              Financial Statements

                           December 31, 2001 and 2000

                   (With Independent Auditors' Report Thereon)



<PAGE>

                          Independent Auditors' Report



The Board of Directors
NELNET Student Loan Corporation-2:


We have audited the accompanying balance sheets of NELNET Student Loan
Corporation-2, (a wholly owned subsidiary of NELnet, Inc.), as of December 31,
2001 and 2000, and the related statements of operations, stockholder's equity
(deficit) and cash flows for the year ended December 31, 2001 and for the period
June 1, 2000 through December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of NELNET Student Loan
Corporation-2 at December 31, 2001 and 2000 and the results of its operations
and its cash flows for the year ended December 31, 2001 and for the period June
1, 2000 through December 31, 2000, in conformity with accounting principles
generally accepted in the United States of America.


/s/ KPMG LLP



March 8, 2002
Lincoln, Nebraska

                                     F-2

<PAGE>
<TABLE>
<CAPTION>

                              NELNET STUDENT LOAN CORPORATION-2
                         (a wholly owned subsidiary of NELnet, Inc.)
                                       Balance Sheets
                                 December 31, 2001 and 2000

                             Assets                                       2001              2000
                                                                    ----------------  ----------------
<S>                                                                 <C>                     <C>
Cash and cash equivalents                                           $         8,093         1,008,671
Student loans receivable, net of allowance of $1,891,253 in 2001
    and $826,279 in 2000                                              1,933,941,068       942,498,737
Accrued interest receivable                                              50,256,051        30,024,577
Restricted cash - held by trustee                                        46,135,799        24,532,423
Debt issuance costs, net of accumulated amortization of $422,848
     in 2001 and $78,537 in 2000                                          9,355,177         4,297,089
Income taxes receivable from parent                                              --           376,708
Due from parent                                                           4,100,000                --
Deferred tax asset                                                        1,135,529           287,775
                                                                    ----------------  ----------------
              Total assets                                          $ 2,044,931,717     1,003,025,980
                                                                    ================  ================
         Liabilities and Stockholder's Equity (Deficit)
Liabilities:
    Notes payable                                                   $ 2,030,000,000     1,000,000,000
    Accrued interest payable                                              4,087,348         3,120,615
    Other liabilities                                                     3,833,683         1,085,668
    Income taxes payable to parent                                        2,867,345                --
                                                                    ----------------  ----------------
              Total liabilities                                       2,040,788,376     1,004,206,283
                                                                    ----------------  ----------------
Stockholder's equity (deficit):
    Common stock, no par value, authorized 1,000 shares;
       issued and outstanding 1,000 shares                                    1,000             1,000
    Additional paid in capital                                            4,142,341                --
    Accumulated deficit                                                          --        (1,181,303)
                                                                    ----------------  ----------------
              Total stockholder's equity (deficit)                        4,143,341        (1,180,303)
Commitments and contingencies
                                                                    ----------------  ----------------
              Total liabilities and stockholder's equity (deficit)  $ 2,044,931,717     1,003,025,980
                                                                    ================  ================
See accompanying notes to financial statements.
</TABLE>

                                     F-2
<PAGE>
<TABLE>
<CAPTION>


                                NELNET STUDENT LOAN CORPORATION-2
                            (a wholly owned subsidiary of NELnet, Inc.)
                                      Statements of Operations
           Year ended December 31, 2001 and the period June 1, 2000 through December 31, 2000

                                                                       2001              2000
                                                                 ----------------  ----------------
<S>                                                              <C>                    <C>
Revenues:
    Loan interest                                                $   100,455,019        46,225,110
    Investment interest                                                1,743,425         2,174,126
    Other                                                                198,289            80,481
                                                                 ----------------  ----------------
              Total revenues                                         102,396,733        48,479,717
                                                                 ----------------  ----------------
Expenses:
    Interest on notes payable                                         68,190,154        39,401,390
    Loan servicing fees to related party                              13,586,370         5,414,538
    Trustee and broker fees                                            3,311,175         1,621,060
    Amortization of debt issuance costs                                  344,311            78,537
    Amortization of loan premiums and lender fees                      4,434,839         1,652,178
    Provision for loan losses                                          1,600,000         1,010,000
    Other general and administrative                                   2,767,940         1,147,800
                                                                 ----------------  ----------------
              Total expenses                                          94,234,789        50,325,503
                                                                 ----------------  ----------------
              Income (loss) before income tax expense (benefit)        8,161,944        (1,845,786)
Income tax expense (benefit)                                           2,938,300          (664,483)
                                                                 ----------------  ----------------
              Net income (loss)                                  $     5,223,644        (1,181,303)
                                                                 ================  ================

See accompanying notes to financial statements.
</TABLE>


                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                              NELNET STUDENT LOAN CORPORATION-2
                           (a wholly owned subsidiary of NELnet, Inc.)
                           Statements of Stockholder's Equity (Deficit)
        Year ended December 31, 2001 and the period June 1, 2000 through December 31, 2000

                                                                                            Total
                                                        Additional        Retained       stockholder's
                                             Common      paid-in          earnings          equity
                                             stock        capital         (deficit)       (deficit)
                                           ---------- ---------------  --------------   -------------
<S>                                         <C>             <C>            <C>             <C>
Balance at June 1, 2000                   $     --              --               --               --

Issuance of common stock                     1,000              --               --            1,000
Net loss                                        --              --       (1,181,303)      (1,181,303)
                                           ----------   -----------    --------------   -------------
Balance at December 31, 2000              $  1,000              --       (1,181,303)      (1,180,303)

Net income                                      --              --        5,223,644        5,223,644
Capital contribution from parent                --       5,600,000               --        5,600,000
Dividends paid - $5,500 a share                 --      (1,457,659)      (4,042,341)      (5,500,000)
                                           ---------- ---------------  --------------   -------------
Balance at December 31, 2001              $  1,000       4,142,341               --        4,143,341
                                           ========== ===============  ==============   =============

See accompanying notes to financial statements.
</TABLE>
                                     F-4
<PAGE>
<TABLE>
<CAPTION>

                                    NELNET STUDENT LOAN CORPORATION-2
                                (a wholly owned subsidiary of NELnet, Inc.)
                                          Statements of Cash Flows
             Year ended December 31, 2001 and the period June 1, 2000 through December 31, 2000

                                                                          2001              2000
                                                                     ---------------   ---------------
<S>                                                                  <C>                   <C>
Net income (loss)                                                    $    5,223,644        (1,181,303)
Adjustments to reconcile net income (loss) to net cash used in
    operating activities:
       Amortization of loan premiums, lender fees and debt
         issuance costs                                                   4,779,150         1,730,715
       Deferred income tax benefit                                         (847,754)         (287,775)
       Provision for loan losses                                          1,600,000         1,010,000
       Increase in accrued interest receivable                          (20,231,474)      (30,024,577)
       Increase in accrued interest payable                                 966,733         3,120,615
       Increase in other liabilities                                      2,748,015         1,085,668
       Decrease (increase) in income taxes receivable from parent           376,708          (376,708)
       Increase in income taxes payable to parent                         2,867,345                --
       Increase in due from parent                                       (4,100,000)               --
                                                                     ---------------   ---------------
              Net cash used in operating activities                      (6,617,633)      (24,923,365)
                                                                     ---------------   ---------------
Cash flows from investing activities:
    Purchases of student loans, including premiums                   (1,188,809,680)   (1,007,842,817)
    Proceeds from sales of student loans                                 54,923,189            11,698
    Net proceeds from student loan principal payments
       and loan consolidations                                          136,409,321        62,670,204
    Increase in restricted cash - held by trustee                       (21,603,376)      (24,532,423)
                                                                     ---------------   ---------------
              Net cash used in investing activities                  (1,019,080,546)     (969,693,338)
                                                                     ---------------   ---------------
Cash flows from financing activities:
    Proceeds from issuance of notes payable                           1,030,000,000     1,000,000,000
    Payment for debt issuance costs                                      (5,402,399)       (4,375,626)
    Issuance of common stock                                                     --             1,000
    Capital contribution from parent                                      5,600,000                --
    Dividends paid                                                       (5,500,000)               --
                                                                     ---------------   ---------------
              Net cash provided by financing activities               1,024,697,601       995,625,374
                                                                     ---------------   ---------------
              Net (decrease) increase in cash and cash equivalents       (1,000,578)        1,008,671

Cash and cash equivalents, beginning of period                            1,008,671                --
                                                                     ---------------   ---------------
Cash and cash equivalents, end of period                             $        8,093         1,008,671
                                                                     ===============   ===============

Supplemental disclosures of cash flow information:
    Interest paid                                                    $   67,223,421        36,280,775
                                                                     ===============   ===============
    Income taxes paid to parent                                      $      542,001                --
                                                                     ===============   ===============

See accompanying notes to financial statements.
</TABLE>

                                     F-5
<PAGE>


                        Nelnet Student Loan Corporation-2
                   (a wholly owned subsidiary of NELnet, Inc.)

                          Notes to Financial Statements

                           December 31, 2001 and 2000


(1)   Summary of Significant Accounting Policies and Practices

           Description of Business

           NELNET Student Loan Corporation-2 (the Company), a wholly owned
           subsidiary of NELnet, Inc. (the Parent or NELnet) is a C Corporation
           which invests in eligible student loans issued under Title IV of the
           Higher Education Act of 1965, as amended (the Act). The 2000
           financial statements reflect the operations of the Company for the
           period June 1, 2000 (date of commencement of operations) through
           December 31, 2000.

           Student loans beneficially owned by the Company include those
           originated under the Stafford Loan Program (SLP), the Parent Loan
           Program for Undergraduate Students (PLUS) program, the Supplemental
           Loans for Students (SLS) program and loans which consolidate certain
           borrower obligations (Consolidation). Title to the loans is held by
           an eligible lender trustee under the Act for the benefit of the
           Company. The financed eligible loan borrowers are geographically
           located throughout the United States and the majority are in school
           or their first year of repayment. The notes payable outstanding are
           payable primarily from interest and principal payments on the student
           loans receivable.

           The Parent is a holding company organized for the purpose of
           establishing and owning the stock of corporations like the Company
           engaged in the securitization of financial assets. The Parent also
           provides managerial and administrative support to the Company.

           Cash Equivalents

           For purposes of the statement of cash flows, the Company considers
           all investments with original maturities of three months or less to
           be cash equivalents.

           Student Loans Receivable and Allowance for Loan Losses

           Investments in student loans, including premiums, are recorded at
           cost, net of premium amortization and the allowance for loan losses.
           Premiums are amortized over the estimated principal life of the
           related loans.

           The allowance for loan losses is estimated and established through a
           provision charged to expense. Losses are charged against the
           allowance when management believes that the collectibility of the
           loan principal is unlikely. Recovery of amounts previously charged
           off are credited to the allowance for loan losses. The charge to
           operations is estimated and based on management's evaluation of the
           loan portfolio, including such factors as the volume and character of
           loans outstanding, past loan loss experience, and general economic
           conditions.

           Management believes that the allowance for loan losses is adequate.
           While management used available information to recognize losses on
           loans, future additions to the allowance for loan losses may be
           necessary based on changes in economic conditions.


                                     F-6
                                                                     (Continued)
<PAGE>


           Interest on Student Loans

           Interest on student loans is accrued when earned and is either paid
           by the Department of Education or the borrower depending on the
           status of the loan at the time of accrual. In addition, the
           Department of Education makes quarterly interest subsidy payments on
           certain qualified Title IV loans until the student is required under
           the provisions of the Act to begin repayment. Repayment on guaranteed
           student loans normally begins within six months after completion of
           their course of study, leaving school or ceasing to carry at least
           one-half the normal full-time academic load as determined by the
           educational institution. Repayment of PLUS loans normally begins
           within 60 days from the date of loan disbursement and repayment of
           SLS loans begins within one month after completion of course study,
           leaving school or ceasing to carry at least the normal full-time
           academic load as determined by the educational institution.

           Debt Issuance Costs

           Debt issuance costs are amortized over the estimated life of the
           related debt, ranging from 12 to 34 years.

           Income Taxes

           The Company files a consolidated Federal tax return with Nelnet Loan
           Services, Inc. (formerly UNIPAC Service Corporation) (NLS), the legal
           parent of NELnet. The financial statements reflect income tax expense
           (benefit) computed as if the Company filed a separate tax return.
           Income tax expense (benefit) is allocated by (to) the Company to
           (from) its Parent as if the Company were a separate tax paying
           entity.

           Income taxes are accounted for under the asset and liability method.
           Deferred tax assets and liabilities are recognized for the future tax
           consequences attributable to differences between the financial
           statement carrying amounts of existing assets and liabilities and
           their respective tax bases. Deferred tax assets and liabilities are
           measured using enacted tax rates expected to apply to taxable income
           in the years in which those temporary differences are expected to be
           recovered or settled. The effect on deferred tax assets and
           liabilities of a change in tax rates is recognized in income in the
           period that includes the enactment date.

           Use of Estimates

           The preparation of the financial statements in conformity with
           accounting principles generally accepted in the United States of
           America requires management to make a number of estimates and
           assumptions that effect the reported amounts of assets and
           liabilities, reported amounts of revenues and expenses, and other
           disclosures. Actual results could differ from those estimates.

           Comprehensive Income

           The Company has no sources of other comprehensive income. Therefore,
           the Company's comprehensive income consists solely of its net income
           (loss).

                                     F-7
                                                                     (Continued)
<PAGE>


(2)   Restricted Cash - Held by Trustee

      The Company's restricted cash is held by the trustee in various accounts
      subject to use restrictions, imposed by the indenture of trust. These
      trustee funds include: the recycling account fund which is used to
      maintain excess funds for future operating needs, if necessary and
      purchases of eligible student loans; the reserve fund which is used to
      cure any deficiencies in the debt service requirement; and the revenue
      fund which is used for the receipt of interest payments on eligible
      student loans and investment securities and to pay fees and expenses
      incurred under the indenture.

(3)   Student Loans Receivable and Concentration of Credit Risk

      Guaranteed loans may be made under the insured student loan program by
      certain lenders as defined by the Act. These loans, including related
      accrued interest, are guaranteed at their maximum level permitted under
      the Act by an authorized guarantee agency which has a contract of
      reinsurance with the Department of Education. The terms of the loans,
      which vary on an individual basis, generally provide for repayment in
      monthly installments of principal and interest over a period of up to 20
      years. Interest rates on loans may be fixed or variable, and will vary
      based on the average of the 91-day U. S. treasury bill rate, and currently
      range from 5% to 12% dependent upon type, terms of loan agreements and
      date of origination. For Title IV loans, the Company has entered into a
      trust agreement in which an unrelated financial institution will serve as
      the eligible lender trustee. As an eligible lender trustee, the financial
      institution acts as the eligible lender in acquiring certain eligible
      student loans as an accommodation to the Company who holds a beneficial
      interest in the student loan assets as the beneficiary of such trust.

      Substantially all student loan principal and related accrued interest are
      guaranteed as defined by the Act. These guarantees are made subject to the
      performance of certain loan servicing procedures stipulated by applicable
      regulations. If these procedures are not met, affected student loans may
      not be covered by the guarantees should the borrower default. The Company
      retains and enforces recourse provisions against servicers and lenders
      under certain circumstances. Such loans are subject to "cure" procedures
      and reinstatement of the guarantee under certain circumstances. Also, in
      accordance with Student Loan Reform Act of 1993, loans disbursed prior to
      October 1, 1993 are fully insured and loans disbursed subsequent to
      October 1, 1993 (approximately 96% and 97% of the student loans at
      December 31, 2001 and 2000, respectively) are insured up to 98%.

      The Company has provided for an allowance for loan losses related to those
      student loans only guaranteed up to 98% for principal and interest. The
      provision is based upon historical default rates for such loans. Activity
      in the allowance for loan losses for the year ended December 31, 2001 and
      for the period June 1, 2000 through December 31, 2000 is shown below:

                                                    2001        2000
                                                 -----------  ----------
           Beginning balance                    $   826,279           -
           Provision for loan losses              1,600,000   1,010,000
           Loans charged off, net of recoveries    (535,026)   (183,721)
                                                 -----------  ----------
           Ending balance                       $ 1,891,253     826,279
                                                 ===========  ==========


                                     F-8
                                                                     (Continued)
<PAGE>

(4)   Notes Payable

      The Company periodically issues taxable student loan asset-backed notes to
      finance the acquisition of student loans. All notes are primarily secured
      by the student loans receivable, related accrued interest, and other
      property and funds held in trust. The majority of the notes are variable
      rate notes with interest rates reset periodically based upon auction rates
      and national indices.

      The table below summarizes the outstanding notes payable at December 31,
2001 and 2000 by issue:
<TABLE>
<CAPTION>

                                                                          2001                          2000
                                                             ---------------------------   ----------------------------
                                                                Carrying       Interest       Carrying        Interest
                                                   Maturity      amount          rate          amount           rate
                                                  ----------- --------------- ----------   ---------------  -----------
<C>                                                 <C>         <C>            <C>            <C>             <C>
2000 Senior Auction Rate Notes, Class A-1          12/1/2032   $  50,000,000       2.12%    $  50,000,000         6.75%
2000 Senior Auction Rate Notes, Class A-2          12/1/2032      50,000,000       2.20        50,000,000         6.98
2000 Senior Auction Rate Notes, Class A-3          12/1/2032      50,000,000       2.15        50,000,000         6.84
2000 Senior Auction Rate Notes, Class A-4          12/1/2032      50,000,000       2.15        50,000,000         6.82
2000 Senior Auction Rate Notes, Class A-5          12/1/2032      50,000,000       2.30        50,000,000         6.85
2000 Senior Auction Rate Notes, Class A-6          12/1/2032      50,000,000       2.40        50,000,000         6.85
2000 Senior Auction Rate Notes, Class A-7          12/1/2032      50,000,000       2.12        50,000,000         6.90
2000 Senior Auction Rate Notes, Class A-8          12/1/2032      75,000,000       2.24        75,000,000         6.98
2000 Senior Auction Rate Notes, Class A-9          12/1/2032      75,000,000       2.15        75,000,000         6.97
2000 Senior Auction Rate Notes, Class A-10         12/1/2032      75,000,000       2.10        75,000,000         6.95
2000 Senior Auction Rate Notes, Class A-11         12/1/2032      75,000,000       2.28        75,000,000         6.95
2000 Senior Auction Rate Notes, Class A-12         12/1/2032     100,000,000       2.15       100,000,000         6.80
2000 Senior Auction Rate Notes, Class A-13         12/1/2032     100,000,000       2.35       100,000,000         6.73
2000 Senior Auction Rate Notes, Class A-14         12/1/2032     100,000,000       2.20       100,000,000         6.65
2000 Subordinate Auction Rate Notes, Class B-1     12/1/2032      50,000,000       2.17        50,000,000         6.90
2001 Senior Fixed Rate Notes, Class A-1             7/1/2012     480,000,000       5.76                --           --
2001 Senior Auction Rate Notes, Class A-2           6/1/2035      50,000,000       2.11                --           --
2001 Senior Auction Rate Notes, Class A-3           6/1/2035      50,000,000       2.30                --           --
2001 Senior Auction Rate Notes, Class A-4           6/1/2035      75,000,000       2.11                --           --
2001 Senior Auction Rate Notes, Class A-5           6/1/2035     100,000,000       2.20                --           --
2001 Senior Auction Rate Notes, Class A-6           6/1/2035     100,000,000       2.15                --           --
2001 Senior Auction Rate Notes, Class A-7           6/1/2035     100,000,000       2.20                --           --
2001 Subordinate Auction Rate Notes, Class B-1      6/1/2035      37,500,000       2.12                --           --
2001 Subordinate Auction Rate Notes, Class B-2      6/1/2035      37,500,000       2.20                --           --
                                                              ---------------              ---------------

                                                              $2,030,000,000               $1,000,000,000
                                                              ===============              ===============
</TABLE>

                                     F-9
                                                                   (Continued)
<PAGE>


      Generally, the notes can be redeemed on any interest payment date at par
      plus accrued interest. Subject to note provisions, all notes are subject
      to redemption prior to maturity at the option of the Company, without a
      prepayment penalty. The Company's prospectus supplement for the 2001
      Senior Fixed Rate Notes, Class A-1 provides that beginning July 1, 2003,
      scheduled payments will be made, only to the extent funds are available.
      Assuming funds are available, scheduled payments are due as follows:

               2002                         $             -
               2003                              48,000,000
               2004                              89,760,000
               2005                              84,000,000
               2006                              84,000,000
               2007 and thereafter            1,724,240,000
                                             ---------------
                                            $ 2,030,000,000
                                             ===============

      The indenture of trust contains, among other requirements, covenants
      related to the restriction of funds to be maintained in a reserve fund.
      Management believes the Company is in compliance with all covenants of the
      note agreements at December 31, 2001 and 2000.

(5)   Income Taxes

      Components of the income tax expense (benefit) for the year ended December
      31, 2001 and the period June 1, 2000 through December 31, 2000 are shown
      below.

                                        2001        2000
                                    ------------ -----------
           Current:
              Federal              $  3,474,268    (346,123)
              State                     311,786     (30,585)
                                    ------------ -----------
                                      3,786,054    (376,708)
                                    ------------ -----------
           Deferred:
              Federal                  (780,826)   (262,987)
              State                     (66,928)    (24,788)
                                    ------------ -----------
                                       (847,754)   (287,775)
                                    ------------ -----------
                                   $  2,938,300    (664,483)
                                    ============ ===========


                                     F-10
                                                                     (Continued)
<PAGE>


      The actual income tax expense (benefit) differs from the "expected" income
      tax expense (benefit), computed by applying the federal statutory
      corporate tax rates to income (loss) before income tax expense (benefit)
      for 2001 and 2000, as shown below.

                                                             2001        2000
                                                          ----------  ----------
      Computed "expected" income tax expense (benefit)   $2,775,061    (627,567)
      Increase in income tax benefit resulting from;
         State taxes, net of Federal income tax expense     161,606     (36,916)
         Other                                                1,633           -
                                                          ----------  ----------
                 Actual income tax expense (benefit)     $2,938,300    (664,483)
                                                          ==========  ==========


      The Company's deferred tax assets at December 31, 2001 and 2000 resulted
      from the future tax benefit of the allowance for loan losses, not
      currently deductible for tax purposes. Management believes that it is more
      likely than not that the Company will generate sufficient future taxable
      income to fully recover deferred tax assets recognized and, therefore, no
      valuation allowance is required.

(6)   Fair Value of Financial Instruments

      Fair value estimates, methods and assumptions are set forth below:

           Cash and Cash Equivalents, Restricted Cash - Held by Trustee
            and Accrued Interest Receivable/Payable

           The carrying amount approximates fair value due to the variable rate
           of interest and/or the short maturities of these instruments.

           Student Loans Receivable

           The fair value of student loans receivable is estimated at amounts
           recently paid by the Company to acquire the loans in the market. The
           fair value of the student loans receivable approximates carrying
           value.

           Notes Payable

           The fair value of the notes payable is based on market prices for
           securities that possess similar credit risk and interest rate risk at
           or near December 31, 2001. The terms of the arrangement specify that
           the outstanding debt is callable at par at specified interest payment
           dates. The estimated fair value of notes payable at December 31, 2001
           is approximately $2,043,940,000.

           Limitations

           Fair value estimates are made at a specific point in time, based on
           relevant market information and information about the financial
           instrument. These estimates are subjective in nature and involve
           uncertainties and matters of significant judgment and, therefore,
           cannot be determined with precision. Changes in assumptions could
           significantly affect the estimates.


                                     F-11
                                                                     (Continued)
<PAGE>

(7)   Guarantee Agencies

      As of December 31, 2001 and 2000, Nebraska Student Loan Program, Inc., the
      Florida Department of Education Office of Student Financial Assistance,
      and the United Student Aid Funds, Inc. were the primary guarantors,
      guaranteeing approximately 66% and 77%, respectively, of the total student
      loans beneficially owned by the Company. Management periodically reviews
      the financial condition of its guarantors and does not believe the level
      of concentration creates an unusual or unanticipated credit risk. In
      addition, management believes that based on the Higher Education
      Amendments of 1998, as amended, the security for and payment of any of the
      Company's obligations would not be materially adversely affected as a
      result of legislative action or other failure to perform on its
      obligations on the part of any guarantee agency. The Company, however,
      offers no assurances to that effect.

 (8)  Related Parties

      Certain shareholders and directors of the Parent are also officers and
      directors of Union Bank & Trust Company (UB&T). A majority of the loans
      currently held were purchased from UB&T and other wholly owned
      subsidiaries of the Parent.

      Under the terms of an agreement, the Company contracts all loan servicing
      through the Parent. NLS is contracted as a sub-servicer by the Parent.
      Fees paid to NLS are calculated using an annual asset-based charge ranging
      from .60% to 1.25% of the student loan principal balance, calculated
      monthly. The fees amounted to approximately $13.6 million and $4.5 million
      in 2001 and 2000, respectively. At December 31, 2001 and 2000,
      approximately $2.9 million and $0.8 million, respectively, was payable to
      the Parent and NLS for loan servicing and is included in other liabilities
      on the accompanying balance sheets.

      During 2001 and 2000, the Company purchased student loans in the
      approximate amounts, from the following wholly owned subsidiaries of the
      Parent. Premiums paid on these loans, not included in the amounts below,
      totaled approximately $14 million and $17.9 million in 2001 and 2000,
      respectively.

                                                      2001          2000
                                                 ------------- -------------
      NELNET Student Loan Corporation-1         $ 224,800,000   101,400,000
      NHELP-I, Inc.                               191,600,000   412,900,000
      NHELP-III, Inc.                              42,400,000   344,100,000
      NEBHELP, Inc.                               390,600,000    97,100,000
      MELMAC, LLC                                   4,900,000             -
                                                 ============= =============


                                     F-12
                                                                     (Continued)
<PAGE>

      During 2001, the Company sold student loans, including unamortized
      premiums, of approximately $54.9 million to NEBHELP, Inc. No gains or
      losses were recognized, as sales between wholly owned subsidiaries of the
      Parent are made at amortized cost.

      During 2001, the Company purchased student loans of approximately $270
      million from UB&T. Premiums paid on these loans totaled approximately $3.4
      million.

      The Company incurred fees to the Parent for managerial and administrative
      support for the operations of the Company based on a service agreement
      that requires .015% of the average outstanding loan balance to be paid
      monthly. In addition, the Parent has provided additional services to the
      Company on an as-needed transactional basis. These fees, included in other
      general and administrative expenses on the accompanying statements of
      operations, amounted to approximately $2.6 million and $0.8 million in
      2001 and 2000, respectively.


                                     F-13