<PAGE>
                                                                   Exhibit 10.20

                               SECURITY AGREEMENT

      THIS SECURITY AGREEMENT (the "AGREEMENT") dated as of January 11, 2002, is
by and among NELNET LOAN SERVICES, INC. "DEBTOR" and BANK OF AMERICA, N.A., as
agent for itself and the other Secured Parties, as that term is defined in the
Credit Agreement described below (the "AGENT").

                                R E C I T A L S:

      The Debtor and NELnet, Inc., as borrowers (collectively, "BORROWERS"), are
entering into that certain Credit Agreement dated of even date herewith with
Bank of America, N.A. (the "BANK") (such agreement, as it may be amended or
otherwise modified from time to time, herein the "CREDIT AGREEMENT"). The
execution and delivery of this Agreement is a condition to the Bank's entering
into the Credit Agreement and making the extensions of credit thereunder.

      NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy, receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Bank to make the Loans under the
Credit Agreement and the other Secured Parties to extend credit to Borrowers,
the parties hereto hereby agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

      Section 1.1. Definitions. As used in this Agreement, the following terms
have the following meanings:

            "COLLATERAL" has the meaning specified in SECTION 2.1 of this
      Agreement.

            "GENERAL INTANGIBLES" means any "GENERAL INTANGIBLES," as such term
      is defined in Article or Chapter 9 of the UCC, now owned or hereafter
      acquired by the Debtor and, in any event, shall include, without
      limitation, each of the following, whether now owned or hereafter acquired
      by the Debtor: (a) books, records, data, plans, manuals, computer
      software, computer tapes, computer disks, computer programs, source codes,
      object codes and rights of the Debtor to retrieve data and other
      information from third parties; (b) contract rights including, without
      limitation, all right, title and interest in and to the Servicing
      Contracts and any documentation pursuant to which any of the other
      Collateral was acquired which include, without limitation, the following:
      (i) all rights of the Debtor to receive moneys due and to become due under
      or pursuant to such agreements, (ii) all rights of the Debtor to receive
      proceeds of any insurance, indemnity, warranty, or guaranty with respect
      to such agreements, (iii) all claims of the Debtor for damages arising out
      of or for breach of or default under such agreements, (iv) all rights of
      the Debtor to terminate such agreements, to perform thereunder and to
      compel performance and otherwise exercise all rights and remedies
      thereunder, and (v) any rights to Liens arising under or as a result of
      any such agreement; (c) all rights of the Debtor to payment under letters
      of credit and similar agreements, including without limitation, all letter
      of credit rights and other supporting obligations; (d) choses in action
      and causes of action of the Debtor (whether arising in contract, tort or
      otherwise and whether or not currently in litigation) and all judgments in
      favor of the Debtor, including without limitation, all commercial tort
      claims; (e) rights and claims of the Debtor under warranties and
<PAGE>
      indemnities; (f) rights of the Debtor under any insurance, surety or
      similar contract or arrangement; and (g) all payment intangibles.

            "OBLIGATIONS" means all "OBLIGATIONS" (as such term is defined in
      the Credit Agreement); provided that the obligations secured hereby shall
      be limited to an aggregate amount equal to the largest amount that would
      not render the Debtor's obligations hereunder subject to avoidance under
      Section 544 or 548 of the United States Bankruptcy Code or under any
      applicable state law relating to fraudulent transfers or conveyances.

            "PROCEEDS" means any "PROCEEDS," as such term is defined in Article
      or Chapter 9 of the UCC and, in any event, shall include, but not be
      limited to: (a) any and all proceeds of any insurance, indemnity, warranty
      or guaranty payable to the Debtor from time to time with respect to any of
      the Collateral; (b) any and all payments (in any form whatsoever) made or
      due and payable to the Debtor from time to time in connection with any
      requisition, confiscation, condemnation, seizure or forfeiture of all or
      any part of the Collateral by any Governmental Authority (or any Person
      acting, or purporting to act, for or on behalf of any Governmental
      Authority); (c) all instruments, documents, chattel paper and general
      intangibles received or arising in connection with a disposition of
      Collateral; (d) all dividends or other distributions relating to any of
      the Collateral; and (e) any and all other amounts or property from time to
      time paid, payable, distributed or distributable under, in connection with
      or in exchange for any of the Collateral and all other payment intangibles
      relating thereto.

            "SERVICING CONTRACT" means an arrangement, whether or not in
      writing, pursuant to which the Debtor has the right to service Student
      Loans for other Persons.

            "UCC" means the Uniform Commercial Code as in effect in the State
      of Texas from time to time. For purposes of all provisions of this
      agreement, if, by applicable law, the perfection or effect of perfection
      or non-perfection of the security interest created hereunder in any
      Collateral is governed by the Uniform Commercial Code as in effect on or
      after the date hereof in any other jurisdiction, "UCC" means the Uniform
      Commercial Code as in effect in such other jurisdiction for purposes of
      the provisions hereof relating to such perfection or the effect of
      perfection or non-perfection.

      Section 1.2 Other Definitional Provisions. Terms used herein that are
defined in the Credit Agreement and are not otherwise defined herein shall have
the meanings therefor specified in the Credit Agreement. References to
"SECTIONS," "SUBSECTIONS," " EXHIBITS" and "SCHEDULES" shall be to Sections,
subsections, Exhibits and Schedules, respectively, of this Agreement unless
otherwise specifically provided. All definitions contained in this Agreement are
equally applicable to the singular and plural forms of the terms defined. All
references to statutes and regulations shall include any amendments of the same
and any successor statutes and regulations. References to particular sections of
the UCC should be read to refer also to parallel sections of the Uniform
Commercial Code as enacted in each state or other jurisdiction where any portion
of the Collateral is or may be located. Terms used herein, which are defined in
the UCC, unless otherwise defined herein or in the Credit Agreement, shall have
the meanings determined in accordance with the UCC.


                                       2
<PAGE>
                                   ARTICLE II.

                                SECURITY INTEREST

      Section 2.1 Security Interest. As collateral security for the prompt
payment and performance in full when due of the Obligations (whether at stated
maturity, by acceleration or otherwise), the Debtor hereby pledges and assigns
to the Agent, and grants to the Agent a continuing lien on and security interest
in, all of the Debtor's right, title and interest in and to the following,
whether now owned or hereafter arising or acquired and wherever located
(collectively, the "COLLATERAL"):

            (a) all rights of the Debtor under all Servicing Contracts now owned
      or hereafter acquired by the Debtor;

            (b) all rights of the Debtor to receive payments under or by virtue
      of the Servicing Contracts described in clause (b) preceding, whether as
      servicing fees, servicing income, damages, amounts payable upon the
      cancellation of termination of any such Servicing Contract, or otherwise;

            (c) all General Intangibles of the Debtor relating to or arising out
      of the Collateral described in clauses (a) and (b) preceding;

            (d) all rights of the Debtor under any Hedging Agreement now or
      hereafter entered into by the Debtor to protect the Debtor against changes
      in the value of any of the Collateral described in clauses (a), (b) and
      (c) preceding; and

            (e) all products and Proceeds, in cash or otherwise, of any of the
      Collateral described in clauses (a), (b), (c) and (d) preceding.

      Section 2.2 Debtor Remains Liable. Notwithstanding anything to the
contrary contained herein, (a) the Debtor shall remain liable under the
documentation included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Agent of any of
its rights or remedies hereunder shall not release the Debtor from any of its
duties or obligations under such documentation, (c) the Agent shall not have any
obligation under any of such documentation included in the Collateral by reason
of this Agreement, and (d) the Agent shall not be obligated to perform any of
the obligations of the Debtor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.

                                  ARTICLE III.

                         REPRESENTATIONS AND WARRANTIES

      To induce the Bank to enter into the Credit Agreement and the other
Secured Parties to extend credit to the Borrowers, the Debtor represents and
warrants to the Bank and the other Secured Parties that:

      Section 3.1 Current Servicing Contracts. Attached hereto as SCHEDULE 3.1
is a true and complete list of all of its Servicing Contracts in effect on the
date hereof. Each of the Servicing Contracts contains provisions substantially
similar to those set forth on SCHEDULE 3.1 A attached hereto.


                                       3
<PAGE>
      Section 3.2 Office Locations: Fictitious Names; Tax I.D. Number. Its
principal place of business, chief executive office and jurisdiction of
organization are located at the place or places identified for it on SCHEDULE
3.2. Within the last four months it has not had any other chief place of
business, chief executive office, or jurisdiction of organization except as
disclosed on SCHEDULE 3.2. SCHEDULE 3.2 also sets forth all other places where
it keeps its books and records relating to the Collateral. It does not do
business and has not done business during the past five years under any
trade-name or fictitious business name except as disclosed on SCHEDULE 3.2. Its
United States Federal Income Tax I.D. Number and organizational number is
identified on SCHEDULE 3.2.

      Section 3.3 0wnership of Collateral. It is the legal and equitable owner
of the Collateral owned by it, free and clear of all Liens, except the Lien
created hereby.

      Section 3.4 Validity of Service Contracts. Each Servicing Contract is in
full force and effect, each Servicing Contract is legal, valid, and enforceable
in accordance with its terms, except as limited by bankruptcy, insolvency and
similar laws of general application affecting the rights of creditors and
general principles of equity, and, to the best of its knowledge, no default or
event of default exists under any Servicing Contract that could have a Material
Adverse Effect.

      Section 3.5 Consents; Status. No consent or approval of any Person,
including any Governmental Authority, is required for it to execute, deliver and
perform this Agreement, or for the validity and enforceability of the Lien and
security interest in the Collateral created hereby, that in each case has not
been obtained and is not in full force and effect. It is approved by, and
qualified and in good standing with, all Governmental Authorities necessary for
it to service the Student Loans under the Servicing Contracts.

                                   ARTICLE IV.

                                    COVENANTS

      The Debtor covenants and agrees with the Agent that until the Obligations
are paid and performed in full and all commitments under the Credit Agreement
have expired or have been terminated:

      Section 4.1 Payment Obligations. It shall, in accordance with its
customary business practices, endeavor to collect or cause to be collected from
each obligor on the Collateral, as and when due, any and all amounts owing under
the Collateral. Without the prior written consent of the Agent, it shall not,
except in the ordinary course of business, (a) grant any extension of time for
any payment with respect to any of the Collateral, (b) compromise, compound, or
settle any of the Collateral for less than the full amount thereof, (c) release,
in whole or in part, any Person liable for payment of any of the Collateral, (d)
allow any credit or discount for payment with respect to any of the Collateral,
or (e) release any Lien or guaranty securing any payment obligation under the
Collateral.

      Section 4.2 Further Assurances. At any time and from time to time, upon
the request of the Agent, and at its sole expense, it shall, promptly execute
and deliver all such further agreements, documents and instruments and take such
further action as the Agent may reasonably deem necessary or appropriate to
preserve and perfect its security interest in the Collateral and carry out the
provisions and purposes of this Agreement or to enable the Agent to exercise and
enforce its rights and remedies hereunder with respect to any of the Collateral.
Without limiting the generality of the foregoing, it shall upon reasonable
request by the Agent: (a) authorize the Agent to file such financing statements
as the Agent may from time to time require; (b) take such action as the Agent
may request to permit the Agent to have control over any investment property;
(c) deliver to the Agent all Collateral the possession of which is necessary to
perfect its security interest therein, duly endorsed and/or accompanied by duly


                                       4
<PAGE>
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Agent; and (d) execute and deliver to the Agent such other
agreements, documents and instruments as the Agent may reasonably require to
perfect and maintain the validity, effectiveness and priority of the Liens
intended to be created by the Loan Documents.

      Section 4.3 Corporate Changes. It shall not change its name, identity,
jurisdiction of organization, or corporate structure in any manner that might
make any financing statement filed in connection with this Agreement seriously
misleading or its United States Federal Tax I.D. Number unless such action is
permitted or not restricted by the Credit Agreement and it shall have given the
Agent thirty (30) days prior written notice thereof and shall have taken all
action reasonably deemed necessary or desirable by the Agent to protect its
security interest in the Collateral with the perfection and priority thereof
required by the Loan Documents. It shall not change its principal place of
business, chief executive office or the place where it keeps its books and
records unless it shall have given the Agent thirty (30) days prior written
notice thereof and shall have taken all action deemed necessary or desirable by
the Agent to cause its security interest in the Collateral to be perfected with
the priority required by the Loan Documents.

      Section 4.4 Performance of Servicing Contracts. It will, at its expense:
(a) perform and observe all of the material terms and provisions of the
Servicing Contracts to be performed or observed by it in accordance with their
terms and with applicable laws and regulations of Governmental Authorities,
maintain the Servicing Contracts in full force and effect, enforce the Servicing
Contracts in accordance with their respective terms, and take all action to such
end as may be from time to time reasonably requested by the Agent and (b) from
time to time (1) furnish to the Agent such information and requests regarding
the Servicing Contracts as the Agent may reasonably request and (2) upon
reasonable request of the Agent make to any other party to any Servicing
Contract such demands and requests for information and reports or for action as
it is entitled to make thereunder.

      Section 4.5 Modification to Servicing Contracts. It will not amend or
otherwise modify the terms and conditions of any Servicing Contract if such
amendment or modification could have a Material Adverse Effect.

                                   ARTICLE V.

                               RIGHTS OF THE AGENT

      Section 5.1 POWER OF ATTORNEY. THE DEBTOR HEREBY IRREVOCABLY CONSTITUTES
AND APPOINTS THE AGENT AND ANY OFFICER OR AGENT THEREOF, WITH FULL POWER OF
SUBSTITUTION, AS ITS TRUE AND LAWFUL, ATTORNEY-IN-FACT WITH FULL IRREVOCABLE
POWER AND AUTHORITY IN THE NAME OF THE DEBTOR OR IN ITS OWN NAME, TO TAKE, WHEN
AN EVENT OF DEFAULT EXISTS, ANY AND ALL ACTIONS AND TO EXECUTE ANY AND ALL
DOCUMENTS AND INSTRUMENTS WHICH THE AGENT AT ANY TIME AND FROM TIME TO TIME
DEEMS NECESSARY OR DESIRABLE TO ACCOMPLISH THE PURPOSES OF THIS AGREEMENT
AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, IT HEREBY GIVES THE
AGENT THE POWER AND RIGHT ON ITS BEHALF AND IN ITS OWN NAME TO DO ANY OF THE
FOLLOWING WHEN AN EVENT OF DEFAULT EXISTS, WITH NOTICE TO THE DEBTOR BUT
WITHOUT THE CONSENT OF THE DEBTOR:

            (a) to demand, sue for, collect or receive, in the name of it or in
      its own name, any money or property at any time payable or receivable on
      account of or in exchange for any of the Collateral and, in connection
      therewith, endorse checks, notes, drafts, acceptances, money orders,


                                       5
<PAGE>
      documents of title or any other instruments for the payment of money under
      the Collateral or any policy of insurance;

            (b) to pay or discharge taxes, Liens or other encumbrances levied or
      placed on or threatened against the Collateral;

            (c) to notify post office authorities to change the address for
      delivery of mail of the Debtor to an address designated by the Agent and
      to receive, open, and dispose of mail addressed to the Debtor;

            (d) (A) to direct account debtors and any other parties liable for
      any payment under any of the Collateral to make payment of any and all
      monies due and to become due thereunder directly to the Agent or as the
      Agent shall direct (the Debtor agrees that if any Proceeds of any
      Collateral shall be received by it after such a direction from the Agent,
      it shall promptly deliver such Proceeds to the Agent with any necessary
      endorsements, and until such Proceeds are delivered to the Agent, such
      Proceeds shall be held in trust by it for the benefit of the Agent and
      shall not be commingled with any other of its funds or property); (B) to
      receive payment of and receipt for any and all monies, claims and other
      amounts due and to become due at any time in respect of or arising out of
      any Collateral; (C) to sign and endorse any assignments, proxies, stock
      powers, verifications and notices in connection with accounts or payment
      obligations and other documents relating to the Collateral; (D) to
      commence and prosecute any suit, action or proceeding at law or in equity
      in any court of competent jurisdiction to collect the Collateral or any
      part thereof and to enforce any other right in respect of any Collateral;
      (E) to defend any suit, action or proceeding brought against it with
      respect to any Collateral; (F) to settle, compromise or adjust any suit,
      action or proceeding described above and, in connection therewith, to give
      such discharges or releases as the Agent may deem appropriate; (G) to add
      or release any guarantor, endorser, surety or other party to any of the
      Collateral; (H) to renew, extend or otherwise change terms and
      conditions of any of the Collateral; (I) to make, settle, compromise or
      adjust any claims under or pertaining to any of the Collateral (including
      claims under any policy of insurance); and (J) to sell, transfer, pledge,
      convey, make any agreement with respect to or otherwise deal with any of
      the Collateral as fully and completely as though the Agent were the
      absolute owner thereof for all purposes, and to do, at the Agent's option
      and the Debtor's expense, at any time, or from time to time, all acts and
      things which the Agent deems necessary to protect, preserve, maintain, or
      realize upon the Collateral and the Agent's security interest therein.

      THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE UNTIL TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH SECTION 7.11.
The Agent shall be under no duty to exercise or withhold the exercise of any of
the rights, powers, privileges and options expressly or implicitly granted to
the Agent in this Agreement, and shall not be liable for any failure to do so or
any delay in doing so. Neither the Agent nor any Person designated by the Agent
shall be liable for any act or omission or for any error of judgment or any
mistake of fact or law, except any of the same resulting from its or their gross
negligence or willful misconduct. This power of attorney is conferred on the
Agent solely to protect, preserve, maintain and realize upon its security
interest in the Collateral. The Agent shall not be responsible for any decline
in the value of the Collateral and shall not be required to take any steps to
preserve rights against prior parties or to protect, preserve or maintain any
Lien given to secure the Collateral.

      Section 5.2 Assignment by the Agent. The Agent may at any time assign or
otherwise transfer all or any portion of their rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, the
Obligations) to any other Person, to the extent permitted


                                       6
<PAGE>
by, and upon the conditions contained in, the Credit Agreement, and such Person
shall thereupon become vested with all the benefits thereof granted to the
Agent, herein or otherwise.

                                   ARTICLE VI.

                          DEFAULT, RIGHTS AND REMEDIES

      If an Event of Default exists, the Agent shall have the following rights
      and remedies:

            (a) In addition to all other rights and remedies granted to the
      Agent in this Agreement or in any other Loan Document or by applicable
      law, the Agent shall have all of the rights and remedies of a secured
      party under the UCC (whether or not the UCC applies to the affected
      Collateral). Without limiting the generality of the foregoing, the Agent
      may (A) without demand or notice to it, collect, receive or take
      possession of the Collateral or any part thereof and for that purpose the
      Agent may enter upon any premises on which the Collateral is located and
      remove the Collateral therefrom or render it inoperable, and/or (B) sell,
      lease or otherwise dispose of the Collateral, or any part thereof, in one
      or more parcels at public or private sale or sales, at the Agent's offices
      or elsewhere, for cash, on credit or for future delivery, and upon such
      other terms as the Agent may deem commercially reasonable or otherwise as
      may be permitted by law. The Agent shall have the right at any public sale
      or sales, and, to the extent permitted by applicable law, at any private
      sale or sales, to bid (which bid may be, in whole or in part, in the form
      of cancellation of indebtedness) and become a purchaser of the Collateral
      or any part thereof free of any right or equity of redemption on the part
      of the Debtor, which right or equity of redemption is hereby expressly
      waived and released by the Debtor. Upon the request of the Agent, the
      Debtor shall assemble the Collateral and make it available to the Agent at
      any place designated by the Agent that is reasonably convenient to it and
      the Agent. The Debtor agrees that the Agent shall not be obligated to give
      more than ten (10) days prior written notice of the time and place of any
      public sale or of the time after which any private sale may take place and
      that such notice shall constitute reasonable notice of such matters. The
      Agent shall not be obligated to make any sale of Collateral if it shall
      determine not to do so, regardless of the fact that notice of sale of
      Collateral may have been given. The Agent may, without notice or
      publication, adjourn any public or private sale or cause the same to be
      adjourned from time to time by announcement at the time and place fixed
      for sale, and such sale may, without further notice, be made at the time
      and place to which the same was so adjourned. The Debtor shall be liable
      for all reasonable expenses of retaking, holding, preparing for sale or
      the like, and all reasonable attorneys' fees, legal expenses and other
      costs and expenses incurred by the Agent in connection with the collection
      of the Obligations and the enforcement of the Agent's rights under this
      Agreement. The Debtor shall remain liable for any deficiency if the
      Proceeds of any sale or other disposition of the Collateral applied to the
      Obligations are insufficient to pay the Obligations in full to the extent
      provided in the Loan Documents. The Agent may apply the Collateral against
      the Obligations as provided in the Credit Agreement. The Debtor waives all
      rights of marshalling, valuation and appraisal in respect of the
      Collateral. Any cash held by the Agent as Collateral and all cash proceeds
      received by the Agent in respect of any sale of, collection from or other
      realization upon all or any part of the Collateral may, in the discretion
      of the Agent, be held by the Agent as collateral for, and then or at any
      time thereafter applied in whole or in part by the Agent against, the
      Obligations in the order permitted by the Credit Agreement. Any surplus of
      such cash or cash proceeds and interest accrued thereon, if any, held by
      the Agent and remaining after payment in full of all the Obligations shall
      be promptly paid over to the Debtor or to whomsoever may be lawfully
      entitled to receive such surplus; provided that the Agent shall have


                                       7
<PAGE>
      no obligation to invest or otherwise pay interest on any amounts held by
      it in connection with or pursuant to this Agreement.

            (b) The Agent may cause any or all of the Collateral held by it to
      be transferred into the name of the Agent or the name or names of the
      Agent's nominee or nominees.

            (c) The Agent may exercise any and all of the rights and remedies of
      the Debtor under or in respect of the Collateral, including, without
      limitation, any and all rights of it to demand or otherwise require
      payment of any amount under, or performance of any provision of, any of
      the Collateral.

            (d) The Agent may collect or receive all money or property at any
      time payable or receivable on account of or in exchange for any of the
      Collateral, but shall be under no obligation to do so.

            (e) On any sale of the Collateral, the Agent is hereby authorized to
      comply with any limitation or restriction with which compliance is
      necessary, in the view of the Agent's counsel, in order to avoid any
      violation of applicable law or in order to obtain any required approval of
      the purchaser or purchasers by any applicable Governmental Authority.

                                  ARTICLE VII.

                                  MISCELLANEOUS

      Section 7.1 No Waiver; Cumulative Remedies. No failure on the part of the
Agent to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under this Agreement shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power
or privilege under this Agreement preclude any other or further exercise
thereof or the exercise of any other right, power, or privilege. The rights and
remedies provided for in this Agreement are cumulative and not exclusive of any
rights and remedies provided by law.

      Section 7.2 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Debtor and the Agent and respective successors
and assigns, except that Debtor may not assign any of its rights or obligations
under this Agreement without the prior written consent of the Agent.

      Section 7.3 AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this
Agreement may be amended or waived only by an instrument in writing signed by
the Debtor and the Agent.

      Section 7.4 Notices. All notices and other communications provided for in
this Agreement shall be given or made in accordance with the Credit Agreement.


                                       8
<PAGE>
      Section 7.5 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas and applicable laws
of the United States of America.

      Section 7.6 Headings. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.

      Section 7.7 Survival of Representations and Warranties. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by the Agent shall affect the representations
and warranties or the right of the Agent or the Bank to rely upon them.

      Section 7.8 Counterparts. This Agreement may be executed in any number of
counterparts and on telecopy counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.

      Section 7.9 Waiver of Bond. In the event the Agent seeks to take
possession of any or all of the Collateral by judicial process, the Debtor
hereby irrevocably waives any bonds and any surety or security relating thereto
that may be required by applicable law as an incident to such possession, and
waives any demand for possession prior to the commencement of any such suit or
action.

      Section 7.10 Severability. Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

      Section 7.1 1 Termination. If all of the Obligations shall have been paid
and performed in full, all commitments of the Bank shall have expired or
terminated, the Agent shall, upon the written request of the Debtor, execute and
deliver to the Debtor a proper instrument or instruments acknowledging the
release and termination of the security interests created by this Agreement, and
shall duly assign and deliver to the Debtor (without recourse and without any
representation or warranty) such of the Collateral as may be in the possession
of the Agent and has not previously been sold or otherwise applied pursuant to
this Agreement.

      Section 7.12 Obligations Absolute. All rights and remedies of the Agent
hereunder, and all obligations of the Debtor hereunder, shall be absolute and
unconditional irrespective of: (a) any lack of validity or enforceability of any
of the Loan Documents; or (b) any change in the time, manner, or place of
payment of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from any of the Loan
Documents; any exchange, release, or non-perfection of any Collateral, or any
release or amendment or waiver of or consent to any departure from any
guarantee, for all or any of the Obligations; or any other circumstance that
might otherwise constitute a defense available to, or a discharge of, a third
party pledgor.

      Section 7.13 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEBTOR HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE AGENT OR ANY
SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.


                                       9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first written above.

                                             DEBTOR:

                                             NELNET LOAN SERVICES, INC.


                                             By:  /s/ Terry Heimes
                                                  ------------------------------
                                                  Name: Terry Heimes
                                                  Title: Chief Financial Officer
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first written above.

                                             AGENT:

                                             BANK OF AMERICA, N.A.,
                                             as Agent for the Secured Parties


                                             By:  /s/ Shelly K. Harper
                                                  ------------------------------
                                                  Shelly K. Harper
                                                  Principal




                                Signature Page to
                               Security Agreement
<PAGE>
                                  SCHEDULE 3.1
                                       TO
                               SECURITY AGREEMENT

                      CURRENT FFELP LOAN SERVICING CLIENTS
                                JANUARY 8, 2002

1)  AmSouth Bank of Alabama (Remote)
2)  Arkansas Student Loan Authority (LIFE OF LOAN)
3)  Bank of America NT&SA (LIFE OF LOAN)
4)  Bank One Corporation (LIFE OF LOAN)
5)  Brazos Higher Education Service Corporation
6)  California Higher Education Loan Authority (2) (LIFE OF LOAN)
7)  Citibank, New York State (LIFE OF LOAN)
8)  Class Credit/Hibernia (LIFE OF LOAN)
9)  Comerica Bank (LIFE OF LOAN)
10) Credit Union of Denver
11) College Loan Corporation (LIFE OF LOAN)
12) Colorado Student Obligation Bond Authority
13) Central Texas Higher Education Authority
14) Chase Manhattan Bank, N.A.
15) Education Finance Group
16) First National Bank of Ft. Collins (LIFE OF LOAN)
17) Florida Educational Loan Marketing Corporation (LIFE OF LOAN)
18) Greater Texas Student Loan Corporation
19) Illinois Designated Account Purchase Program (FFELP Full Service and
    Remote) (LIFE OF LOAN)
20) Key Bank (LIFE OF LOAN)
21) Louisiana Public Facilities Authority
22) Manufacturers and Traders Bank (LIFE OF LOAN)
23) Maine Education Loan Marketing Corporation (LIFE OF LOAN)
24) Mesa County Teachers Federal Credit Union (LIFE OF LOAN)
25) Michigan Higher Education Student Loan Authority
26) Michigan National Bank/MN Finance/Standard Federal (LIFE OF LOAN)
27) Minnesota Higher Education Services Office
28) Mountain States Bank (LIFE OF LOAN)
29) Navy Federal Credit Union (LIFE OF LOAN)
30) NHELP (LIFE OF LOAN)
31) NSA, Bank of Oklahoma (LIFE OF LOAN)
32) NES, Bank of Oklahoma (LIFE OF LOAN)
33) Norlarco Credit Union (LIFE OF LOAN)
34) Northwestern Area Credit Union (LIFE OF LOAN)
35) Wells Fargo Bank, N.A. (LIFE OF LOAN)
36) North Texas Higher Education Authority
37) Orange County Teachers Federal Credit Union (LIFE OF LOAN)
38) Pinnacle Bank of Papillion (LIFE OF LOAN)
39) North Fork Bank (LIFE OF LOAN)


                                        2
<PAGE>
40) Rhode Island Student Loan Authority (FFELP Full Service and Remote)
41) San Antonio Federal Credit Union (LIFE OF LOAN)
42) Student Loan Acquisition Authority (LIFE OF LOAN)
43) Student Loan Finance Association
44) Student Loan Funding Corporation (LIFE OF LOAN)
45) Space Age Federal Credit Union (LIFE OF LOAN)
46) Sun Trust Bank (LIFE OF LOAN)
47) Union Bank & Trust Company
48) University Federal Credit Union (LIFE OF LOAN)
49) University of Missouri Kansas City (LIFE OF LOAN)
50) NELnet (LIFE OF LOAN)
51) U.S. Bank N.A.
52) USA Education (LIFE OF LOAN)
53) Utah Higher Education Assistance Authority (LIFE OF LOAN IN EVENT OF SALE)
54) Alabama Higher Education Loan (Remote)
55) Colorado Student Loan Program (Remote)
56) Regions Financial Corporation (Remote)
57) National Higher Education Loan Program (Remote)
58) Oklahoma Student Loan Authority (Remote)

                                        2
<PAGE>

                                  SCHEDULE 3.1A
                                       TO
                               SECURITY AGREEMENT

[NELNET LOGO]

                          LOAN APPLICATION PROCESSING,
                      DISBURSEMENT AND SERVICING AGREEMENT

                    --FEDERAL FAMILY EDUCATION LOAN PROGRAM--

THIS LOAN APPLICATION PROCESSING, DISBURSEMENT AND SERVICING AGREEMENT (the
"Agreement") is entered into as of the ______ day of _________, 2001, (the
"Effective Date") by and between Nelnet Loan Services, Inc. ("Servicer"), and
__________________, ("Lender").

     WHEREAS, Servicer is in the loan application processing, disbursement and
servicing business in the States of Colorado, Nebraska and Florida, and in the
ordinary course of such business processes applications, disburses and services
loans to student/parent borrowers (the "Education Loans") which are made and
guaranteed in accordance with the provisions of the Higher Education Act of
1965, as amended, and rules and regulations promulgated thereunder as in effect
from time to time (collectively, the "Education Act"); and,

     WHEREAS, Servicer has developed and/or has available to it the systems and
services to enable it to process applications, disburse and service Education
Loans in accordance with the Education Act and with rules and regulations
previously promulgated by ___________________, which constitute all of the
Guarantors for all Education Loans which are to be serviced hereunder
("Guarantor(s)") as in effect from time to time(collectively, "Regulations");
and

     WHEREAS, Lender in the ordinary course of its business makes or acquires
Education Loans; and

     WHEREAS, Lender desires to retain Servicer to process applications,
disburse and service its Education Loans.

     NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, the parties agree as follows:

                                    AGREEMENT

     1.   TERM; LIFE OF LOAN SERVICING; REMOVAL; SERIAL LOANS.

     1.1  TERM. With respect to application processing and disbursements only,
the initial term of this Agreement shall be from the Effective Date for a period
of five (5) years ("Initial Term") subject to earlier termination pursuant to
the terms herein. The Initial Term of this Agreement may be renewed for an
additional period of time upon mutual agreement of the parties ("Additional
Term"). Upon expiration of the Initial or Additional Terms, all terms and
conditions of this Agreement with respect to application processing and
disbursements, except Section 12, shall continue on a month to month basis until
either party terminates this Agreement, with or without cause, upon sixty (60)
days written notice to the other party. If this Agreement continues on a month
to month

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 1

<PAGE>

basis after expiration, the "Servicing Fees" (as set forth in this Agreement and
Schedule "A") will increase by two percent (2%). Servicer also reserves the
right, at any other time after expiration of the Initial Term or any Additional
Term, to increase, decrease, modify and/or change the Servicing Fees as provided
for in Section 13 and Schedule "A", in such manner as Servicer may determine,
upon sixty (60) days prior written notice to Lender.

     1.2  LIFE OF LOAN SERVICING. The parties acknowledge that in order to avoid
disruption and maintain continuity of service to the maker(s) of a note securing
an Education Loan ("Borrowers"), it has become customary in the industry to have
Education Loans serviced for the life of the Education Loan by a single
servicer. Accordingly, with respect to all post-disbursement servicing, Lender
hereby agrees that it will ensure that all Education Loans originated, acquired,
held, or sold by the Lender under the Education Act and subject to this
Agreement will remain with Servicer for the life of the loan, which means until
the Education Loan is paid in full by the Borrower or Guarantor.

In the event the Lender desires to sell any of its Education Loans, the Lender
will sell the Education Loans to a purchaser maintaining a servicing agreement
with Servicer which provides for servicing of such Education Loans on a life of
loan basis.

If the Lender desires to sell its Education Loans to a purchaser that does not
have such an agreement with Servicer, Lender shall require such purchaser to
execute a servicing agreement with Servicer in order to have the Education Loans
serviced on a life of loan basis by Servicer.

The intent of this section is to assure that every Education Loan will remain
with Servicer for servicing for the life of the loan.

Notwithstanding the foregoing, this section will not apply in the event:Servicer
is in material breach of this Agreement and fails to cure such breach under the
provisions set forth in Section 23(a) hereof.

     1.3  APPROVED REMOVAL OF EDUCATION LOANS. If Lender sells or removes any
Education Loan from the Servicer system with Servicer's prior written approval
(i.e., for reasons such as serialization, but subject to Servicer's sole
discretion), Lender agrees to pay to Servicer a removal fee of Twenty-One
dollars ($21.00) per "Account Group" (as defined below) transferred off the
Servicer's servicing system plus any other expenses related to additional,
special or unique requests of the Lender.

     1.4  SERIAL LOANS. Notwithstanding any other provision to the contrary in
this Agreement, Servicer shall have the right to originate and service all
Education Loans that are "serial" (as that term is commonly understood with
respect to Education Loans) to Education Loans originated and/or serviced
hereunder. This provision shall survive the termination of this Agreement for so
long as Lender is directly or indirectly engaged in the business of making
Education Loans under the FFEL Program; provided, however, that if an "eligible
institution" as defined in the Education Act ("Eligible Institution") or a
Borrower requests in writing that Servicer not provide either origination or
servicing for a serial loan, then Lender shall not be required to use Servicer
for origination or servicing for such serial loan as requested by the Eligible
Institution or borrower; Lender shall not request an Eligible Institution or
Borrower to give such request to Sender.

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 2
<PAGE>

                APPLICATION PROCESSING AND DISBURSEMENT SERVICES

     2.1. APPLICATION PROCESSING. Servicer shall maintain a special post office
drawer or box for purposes of receiving applications directly from Eligible
Institutions, Borrowers or Lender. Servicer shall process applications received
at the drawer or box or otherwise received at Servicer's office, as follows:

         (a) Servicer shall verify that all Education Loan applications and
         supporting documents are complete, provided, however, Servicer shall
         not be required to verify any information included in an Education Loan
         application (except to the extent required by the Education Act or
         applicable Regulations of the Guarantor);

         (b) Servicer shall perform acts necessary to secure disbursement
         approval and insurance coverage of the principal and interest on the
         Education Loan from the applicable Guarantor and shall be responsible
         for all communication and contact with such Guarantor necessary or
         appropriate to accomplish such approval and coverage;

         (c) Servicer shall prepare and mail directly to Borrower all notices,
         statements and disclosures required under the Education Act;

         (d) Servicer shall, if necessary, prepare and mail directly to Borrower
         a replacement or other necessary promissory note, together with
         appropriate instructions for execution and delivery of the promissory
         note and any related documentation;

Lender shall be solely responsible for payment to the U.S. Government of
origination or other fees required by the Education Act, and for all fees
required by any central disbursement agent, unless the parties agree otherwise
in writing.

If Lender is utilizing a third party disbursement agent to disburse its
Education Loans prior to delivery of the Education Loans to Servicer, Servicer
will have no liability or responsibility for the tasks set forth in subsections
(a) - (d) above nor for reconciliation issues arising from such process.

     2.2. DISBURSEMENT SERVICES. Servicer shall prepare the disbursement checks
made payable to the appropriate Borrowers, or shall make other allowable
arrangements for the disbursement of Education Loan proceeds, and shall mail the
checks or deliver the funds, to the appropriate location. Servicer will print
Lender's logo on checks if requested.

     2.3. PLUS LOAN SERVICES. If applicable, Servicer shall perform credit
review services (as required under the Education Act) on Borrowers to whom
Lender agrees to make Education Loans which are PLUS loans authorized under
Section 428B of the Education Act ("PLUS Loans"). Servicer agrees to act as
Lender's agent for the receipt, evaluation, handling and maintenance of certain
PLUS Loan credit information, in order to assist Lender in making decisions with
respect to the approval or denial of PLUS Loans, consistent with the terms of
the Education Act and Regulations. Lender will make the final lending decision,
according to the procedures stated in this Agreement and such reasonable appeal
processes as Lender determines and directs. Servicer will, with respect to PLUS
Loans:

         (a) Accept PLUS Loan applications or pre-approval requests for purposes
         of

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 3

<PAGE>

         performing credit evaluation;

     (b) Receive and evaluate (based on Education Act requirements and Lender's
         reasonable guidelines) a credit report from the credit-reporting agency
         for each applicant, and report the results of such evaluation to the
         appropriate Eligible Institution within twenty-four hours of receipt.
         Servicer may rely upon all information contained in such report or
         otherwise provided by the credit reporting agency and shall have no
         liability for inaccurate or erroneous information contained therein.

     (c) Identify each applicant for a PLUS Loan who does not have an adverse
         credit history by generating and providing to Lender a disbursement
         report related to Education Loan origination.

     (d) According to Education Act requirements, generate and provide to the
         PLUS Loan applicant an "adverse action" letter in compliance with the
         Equal Credit Opportunity Act on behalf of Lender with respect to each
         applicant identified as having an adverse credit history, within thirty
         (30) days after Servicer receives both the completed Education Loan
         application and the credit history, and provide a copy of such letter
         or otherwise identify such applicants to Lender.

     (e) Lender agrees that with respect to all PLUS Loans processed under this
         Agreement, it will ensure that all information in Loan applications and
         other information provided to Servicer in connection with its
         performance of the services hereunder is accurate and complete.

     (f) Lender will be responsible for handling and evaluating all appeals of
         denied credit, including, if appropriate following appeal,
         communicating in writing its approval of a PLUS Loan application
         previously denied, and requesting guarantee of the PLUS Loan due to
         error or other reasons relating to the original credit history and
         properly documenting the same.

Nothing in this Agreement shall make Servicer a loan production office or holder
or originator of PLUS Loans processed under this Agreement. Lender acknowledges
its sole liability for the decision to approve or deny PLUS Loan applications,
and will hold Servicer harmless against claims arising out of such decisions.

     2.4. FUNDING OF LOANS.

         (a) Servicer shall maintain an account for purposes of disbursing
         proceeds of Education Loans pursuant to this Agreement. Servicer shall
         notify Lender each "Business Day" (Monday - Friday, except Federally
         recognized holidays) of the disbursement amount required to fund the
         Education Loans processed in accordance with this Agreement. Promptly
         upon such notification, Lender shall cause such account to be credited
         with "same day" funds in such amount. If Servicer fails to notify
         Lender, Lender shall promptly credit such account with the required
         funds on the next Business Day and shall not be liable to Servicer, the
         Eligible Institutions or Borrowers for failure to credit the account on
         such day, provided, however, Lender shall use its best efforts to
         credit the account with "same day" funds regardless of when
         notification is received from Servicer. Lender shall cause all
         Education Loans originated in accordance with this Agreement to be
         promptly funded as set forth above.

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 4
<PAGE>

         (b) Failure to Fund. If Lender fails to fund the Servicer's account at
         the instructed level, Lender shall pay Servicer a fee of Two Hundred
         dollars ($200.00) per day the account is not funded. Should this
         failure persist for three (3) consecutive days, Servicer reserves the
         right to terminate its obligation to furnish the funding services.
         Servicer shall be entitled to earnings, if any, on the funding account.

         (c) Return of Deposits. Amounts deposited with Servicer but not
         disbursed by reason of an Education Loan being canceled, shall be
         returned to Lender promptly, and in no event later than one (1) week
         after Servicer's receipt of the written notice of cancellation or
         return of the check with respect to such cancelled Education Loan.

     3.  REPORTS.

         (a) Standard Reports. Standard reports will be furnished to Lender via
         U.S. Mail, first class, postage prepaid, or as otherwise mutually
         agreed.

         (b) Special Reports. At Lender's request, Servicer will furnish such
         special reports as can be reasonably provided by Servicer, provided,
         however, that Lender will compensate Servicer for such reports as a
         "Special Service" as indicated in Schedule "A".

     4.  REVIEW OF OUTPUT AND REPORTS. Servicer shall make commercially
reasonable efforts to verify that all output, including reports, are correct and
complete in all material respects. Lender shall, however, review each output,
especially reports, thoroughly upon receipt to verify completeness and accuracy.
Problems identified with output and/or the underlying Education Loan data shall
be reported by Lender to Servicer within forty-five (45) days of the date the
output was generated. Erroneous data and/or output programs so reported will be
corrected, and affected reports will be rerun at no additional charge. Problems
reported to Servicer after forty-five (45) days may be subject to a time and
materials charge at Servicer's option to correct output retroactively. Servicer
shall have no liability for errors that could reasonably be expected to be
identified by Lender personnel familiar with the Education Loan program and
Lender's Education Loan portfolio, or for errors that are not reported within
forty-five (45) days.

                           POST-DISBURSEMENT SERVICING

     5.  DELIVERY AND CONVERSION OF EDUCATION LOANS FOR SERVICING AND
COLLECTION. Subject to Servicer's scheduling requirements, Lender may from time
to time deliver or cause to be delivered Education Loans to Servicer with
respect to which processing has been completed and proceeds have been disbursed
to the Borrowers prior to the date of delivery ("Converted Education Loans") to
be serviced pursuant to the terms of this Agreement. Lender shall transmit to
Servicer all documentation required by Servicer to enable it to service the
Converted Education Loans (the "Loan Documentation"). Upon receipt of the Loan
Documentation, Servicer shall verify only the presence of the promissory note,
the original Borrower application, and proof of disbursement. Servicer is
willing to use reasonable efforts to identify previous servicing errors or
omissions in this process, if requested by Lender, for a fee to be mutually
agreed upon following Servicer's review of the portfolio. However, Servicer
shall not be liable or responsible for the consequences of any errors it does or
does not detect in such file review, nor for missing or incorrect documentation
at conversion.

     6.  PORTFOLIOS SUBJECT TO REJECTION BY SERVICER. Lender acknowledges that
servicing certain types of Education Loan portfolios poses a risk of financial
hardship for Servicer.

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 5

<PAGE>

Therefore, Servicer may in its discretion reject certain Education Loans or
Education Loan portfolios ("Rejected Loans") prior to placing such loans on the
Servicer system. Servicer shall provide Lender with reasonable notice prior to
transfer to Servicer's system as to Servicer's determination that Education
Loans are deemed to be Rejected Loans. Servicer shall have no right to reject or
decline Education Loans after the loans are transferred to the Servicer system.

     7.  CONVERSION OF DELINQUENT LOANS. Servicer is agreeable to the conversion
of delinquent Education Loans to its system for servicing. If a loan is one
hundred eighty (180) days or more past due, however, Servicer will not be
responsible for any Guarantor claim rejects or interest denials due to untimely
guarantee claim filing.

     8.  SERVICING OF EDUCATION LOANS. Upon acceptance of any Education Loan
into Servicer's computer system and after the sale date (if applicable) of the
Education Loan to Lender, or following application processing and disbursement
of Education Loans originated under this Agreement, Servicer shall service the
Education Loan in accordance with the Education Act, and this Agreement,
including the following:

     (a) Servicer will service the Education Loans in such a manner as to
         maintain the guarantee thereon in full force at all times, subject to
         Section 16, below.

     (b) Servicer shall prepare and mail all required statements, notices,
         disclosures and demands directly to the Borrower.

     (c) Servicer shall retain records of contacts, follow-ups, collection
         efforts and correspondence regarding each Education Loan.

     (d) Servicer shall provide accounting for all transactions related to
         individual Education Loans, including, but not limited to, accounting
         for all payments of principal and interest upon such Education Loans
         (for Converted Education Loans, from the conversion date to the
         Servicer system).

     (e) Servicer shall process all deferments and forbearances.

     (f) Servicer shall process all address changes and update address changes
         accordingly.

     (g) Servicer shall retain all documents it receives pertaining to each
         Education Loan, in accordance with the filing requirements set forth in
         the most current "Common Manual - Unified Student Loan Policy". Such
         retention may be on magnetic tape, microfilm, laser disk or other
         related medium.

     (h) When necessary and allowable by the Education Act, Servicer shall take
         all steps necessary to file a claim for loss with Guarantor.

     (i) Servicer shall provide data as required to Guarantor. Any requirements
         beyond those found in the Common Manual shall be billed to the Lender
         at a price to be mutually agreed upon. Servicer shall have no liability
         for late filing of claims if the information required for such filing
         has been requested from Lender but not received within seven days of
         such request.

     (j) Servicer shall process and add repurchase Education Loans from the
         Guarantor to the Servicer Servicing System as required by the Education
         Act or upon the request of Lender. The fee for such repurchase is
         provided in Schedule A.

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 6

<PAGE>

     (k) Servicer shall provide such other services as Servicer customarily
         provides and deems appropriate.

     9.  SYSTEM UPDATES. Lender agrees that in the course of its Education Loan
servicing activities, Servicer may rely on, without independently verifying, all
data entries, manipulations and representations provided to Servicer by Lender,
Eligible Institutions, and Borrowers with respect to the Education Loans,
including but not limited to, Eligible Institutions/Borrower certification,
eligibility, enrollment, and Eligible Institution or Borrower demographics,
including data entries provided to Servicer electronically, via the Internet or
otherwise, and that Servicer shall have no liability for incorrect information
or the consequences thereof, which is provided by Lender, Eligible Institutions,
or Borrowers.

     10. CURE SERVICING. At Lender's request Servicer agrees to perform
additional servicing activities not required under the terms of this Agreement
for Converted Education Loans transferred to Servicer, which have previously not
been serviced in accordance with the Education Act and Regulations, and which
require additional servicing activity to attempt to maintain or reinstate the
Loans' principal and interest guarantee from the Guarantor ("Cure Procedures").
Utilizing Cure Procedures approved by the Guarantor, Servicer will use its best
efforts to cure all defects caused by Lender or unreasonable acts of the
Guarantor(s) (as defined in Section 17 below). Servicer makes no representation
or warranty that the guarantee on any Education Loan will be reinstated
regardless of whether Servicer follows the Cure Procedures approved by the
Guarantor.

     11. WRITE OFF GUIDELINES. The Servicer shall use the following guidelines
in determining whether to write off and terminate efforts to collect or service
a Borrower's Account:

<TABLE>
<CAPTION>
Account Balance*                      Process Requirements
----------------                      --------------------
<S>                       <C>
$0 - $100.00              Writeoff thirty (30) days after the last payment was
                          made, and if applicable, forward notes to Borrower.

$100.01 +                 Recover such amount by filing a supplemental
                          claim, if applicable, or service as normal.
</TABLE>

* Account Balance includes both principal and interest

If the Borrower's final payment results in an overpayment equal to or greater
than ten dollars ($10.00), the Servicer shall notify the Lender no later than
forty-five (45) days after receipt to refund the entire overpayment to the
Borrower. If the overpayment is less than ten dollars ($10.00), the Servicer
shall write off the amount, but in each case shall notify the Lender by listing
the dollar amount and Borrower Account within thirty (30) days. To the extent a
law requires refunds of less than $10.00, Servicer shall refund such overpayment
upon notification by Lender of such law and the specific requirements thereof.

     12. REPORTS TO LENDER. On or before the 15th day of each month, (or by the
15th day following quarter end, as applicable) unless some other time is
provided herein, Servicer shall prepare and deliver the following reports to
Lender, or to such other person as Lender may designate, with respect to
activity during the preceding month:

     (a) Total Principal Report (Daily);

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 7

<PAGE>

     (b) Interest Reconcile Report (Daily)

     (c) Refund Reconcile Report (Daily);

     (d) Daily Monetary Transaction Summary (Daily, Monthly);

     (e) Portfolio Report (Monthly);

     (f) Claims Delinquency Detail (Monthly);

     (g) Computation of Interest and Special Allowance Payments (currently
     reported on E.D. Form 799). Data will be computed commencing with the date
     Education Loans appear on the records of Servicer (Quarterly).

     Lender shall receive one copy of each of the above reports at no cost.
Servicer will provide extra copies at the request of Lender, and Lender will pay
the cost of the copies. Any customized reports shall be provided at an
additional cost to be mutually agreed upon by Servicer and Lender.

     13. SERVICING FEES.

     13.1. Lender shall pay to Servicer, on or before the 15th day of each month
(or within fifteen (15) days of billing statement) the fees provided in Schedule
A ("Servicing Fees") for and in consideration of the services performed by
Servicer hereunder for the preceding month. After the first twelve (12) months
of this Agreement, the Servicing Fees shall be subject to change by Servicer at
any time, upon sixty (60) days written notice, but changes will not occur more
frequently than once every twelve (12) months. No change will result in an
increase that exceeds two percent (2%) for any twelve (12) month period.

     In the event Servicing Fees are not paid within thirty (30) days of the
billing statement, Lender agrees to pay a late fee of one and one-half percent
(1 1/2%) per month against the entire outstanding balance of the account
including any prior late fees outstanding. Servicer also reserves the rights to
(a) withhold transfer of borrower payments; (b) withhold reports otherwise due;
and (c) terminate this Agreement without notice if nonpayment persists for sixty
(60) days or more from billing.

     13.2. POSTAGE EXPENSES. In addition to the foregoing, Lender also agrees
that Servicer may pass on to Lender the cost of actual increases in postage
rates by the United States Postal Service.

     13.3. MATERIAL CHANGES. The parties agree that should Servicer be required
to make material changes to its current lender servicing practices or servicing
system due to changes to the Education Act, Regulations of the Guarantor, and/or
business environment, or to other costs beyond Servicer's control, Servicer may
increase the Servicing Fees with Lender to reasonably reflect those increased
costs at any time during this Agreement.

     13.4. RIGHT TO OFFSET. In the event that the Servicer does not receive
payment from Lender with respect to any Education Loan or services provided
under this Agreement, or in the event that the Servicer is notified that funds
are owed to the Secretary of Education, the Servicer shall notify Lender of such
nonpayment or monies owed. In such event, the Servicer may, at its discretion,
use funds received on Lender's behalf to offset or pay any monies due the
Secretary of Education or any invoice due the Servicer plus interest provided
that the invoice has not been paid, the amount is undisputed as of the date of
payment, and ninety (90) days have elapsed since the mailing of the invoice to
Lender.

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 8

<PAGE>

     14. LOAN PAYMENTS. Borrowers will be directed to make all Education Loan
payments to a lockbox established by Servicer. All cash receipts will be
remitted once a week to Lender or as Lender may otherwise reasonably request.

     15. INQUIRIES. Servicer shall answer all inquiries regarding Education
Loans, Eligible Institution status or refunds, and Lender shall cooperate to the
extent necessary to gather the information needed to answer such inquiries. Such
inquiries may be referred to the Eligible Institution which the student Borrower
attended or is attending, if necessary. Servicer shall have no responsibility
for any disputes between Borrowers and Eligible Institutions regarding tuition,
registration, attendance, or quality of education/training.

     16. AGENT AUTHORIZATION. Lender authorizes Servicer to act as Lender's
agent in the processing and servicing of Lender's Education Loans. This
authorization includes but is not limited to all correspondence and liaison
necessary with Guarantor regarding Lender's Education Loans, assignment of
claims to Guarantor and any/or all other communications, correspondence,
signatures or other acts appropriate to service Lender's Education Loans in
accordance with the Education Act and/or Regulations of the Guarantor.

     17. LIABILITY OF SERVICER. Servicer assumes no responsibility or liability
for any claims, liabilities, losses, guarantee rejects, or interest denials that
are related to servicing of the Education Loans prior to (a) Servicer processing
the application of the Education Loan, (b) placing of the Education Loan on
Servicer's system, or (c) prior to the date Lender holds ownership of the
Education Loan. Servicer assumes no liability for the failure of any Borrower to
repay their Education Loan, nor for the failure of the United States government
to pay any principal, interest, subsidy or special allowance, nor for the
failure of Guarantor to make a required payment of any principal and/or interest
on any of Lender's Education Loans. Servicer shall not be responsible for
consequences of unreasonable acts of any Guarantor. For purposes of this
Agreement, unreasonable acts of the Guarantor shall include but not be limited
to: Guarantor actions that are outside the scope of industry custom; oral
commitments accepted in practice discontinued without sufficient advance notice;
retroactive implementation of a regulation without sufficient prior notification
or clarification; Guarantor servicing deficiencies that preclude Servicer from
performing requirements correctly or timely; Guarantor submission of data to the
incorrect entity; Guarantor submission of data in a format that is not usable,
legible or readable; refusal of the Guarantor to acknowledge data or
documentation; unscheduled changes in normal business hours; enforcement of an
unwritten policy or standard; interpretation of a policy, standard or regulation
in a manner inconsistent with the Common Manual, Guarantor's manual or
Department of Education clarification; or any other acts of the Guarantor of a
similar nature.

If Servicer takes or fails to take any action in connection with servicing
responsibilities under this Agreement (whether or not such action or inaction
amounts to negligence) which causes any Education Loan subject to this Agreement
to be denied the benefit of any applicable guarantee, Servicer shall have a
reasonable time to cause such benefits of the guarantee to be reinstated. If
such benefits are not reinstated within twelve (12) months of denial by
Guarantor or the Department of Education, Lender agrees to sign a Loan Sale
Agreement to sell the Education Loan to another Eligible Lender (as defined in
the Act) of Servicer's choice ("Buyer"). Subject to the terms of the Loan Sale
Agreement, Buyer will purchase the Education Loan from Lender for an amount
equal to the amount the Guarantor would have paid if the Education Loan had been
accepted and paid by the Guarantor as a claim (which may include but is not
limited to lost principal, interest including interest penalties for due
diligence violations, and special allowance payments), and title to the
Education Loan will thereby be transferred to Buyer. Lender

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 9

<PAGE>

shall repurchase any Education Loan on which the guarantee is fully reinstated,
from Buyer at an amount equal to the then outstanding principal balance plus all
accrued interest due thereon, less the amount subject to Lender Risk Sharing
under the Education Act. Notwithstanding any other provision in this Agreement
to the contrary, if Servicer performs its duties under this paragraph, then
Servicer shall not be deemed to be in breach of this Agreement for failure to
service properly.

Lender's remedies for breach of this Agreement by Servicer shall be limited to
this Section. In no event will Servicer be liable under any theory of tort,
contract, strict liability or other legal or equitable theory for any lost
profits or exemplary, punitive, special, incidental, indirect or consequential
damages, each of which is hereby excluded by agreement of the parties regardless
of whether or not Servicer has been advised of the possibility of such damages.
Any action for the breach of any provisions of this Agreement shall be commenced
within one (1) year after the Education Loan leaves the Servicer's servicing
system.

     18. INDEMNIFICATION. Lender shall indemnify and hold Servicer harmless from
and against all claims, liabilities, losses, damages, costs and expenses
(including reasonable attorney's fees) asserted against or incurred by Servicer
as a result of Servicer complying with any instruction or directive by Lender.
Lender shall further indemnify and hold Servicer harmless from and against all
claims, liabilities, losses, damages, costs and expenses (including reasonable
attorney's fees) asserted against or incurred by Servicer as a result of actions
not the fault of or not caused solely by a negligent act of Servicer, its agents
or employees, including all claims, liabilities, losses, damages and costs
caused in part or in whole by or the fault of the Lender, a prior holder, owner
or lender, a prior servicer or any other party connected in any manner to the
Education Loan or Education Loans resulting in the claim, liability, loss,
damage, cost, or expense.

     19. DISCLOSURE OF INFORMATION. (a) All data, information, records,
correspondence, reports or other documentation received by Servicer pursuant to
this Agreement from Lender, the Eligible Institution which the student attended,
or the Borrower, or prepared and maintained by Servicer in the course of its
activities under this Agreement shall be released or divulged only to Lender,
Eligible Institutions, guarantee agencies, regulatory bodies, other parties
necessary to accommodate enforceability of the Education Loan, Servicer's
affiliates or as otherwise required by law. With respect to information or
documents relating to a particular Borrower, Servicer may release or divulge
that information or those documents to that Borrower, Eligible Institutions, or
such other parties as Servicer may be directed in writing by Lender or such
Borrower, or as otherwise required by law.

(b) Servicer shall establish and maintain policies and procedures designed to
ensure the confidentiality of the Lender information (non-public personal
information). Among other things, Servicer acknowledges that it is against
Federal law to disclose non-public personal information received from a
financial institution under certain circumstances. Servicer and Lender agree to
comply with the provisions of the Gramm-Leach-Bliley Act and all implementing
rules and regulations (collectively "GLB") regarding consumer financial privacy,
to the extent each of their actions and responsibilities hereunder are impacted.

(c) Lender acknowledges that it holds the "Customer Relationship" (as defined in
GLB) with Education Loan borrowers and thereby has the responsibility to provide
required privacy policies and notices to such borrowers. Upon request, Servicer
will assist Lender with such services at an additional fee to be negotiated
separately from this Agreement.

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 10

<PAGE>

     20. CONFIDENTIALITY.

     20.1. Lender agrees not to disclose any provisions or portions of this
Agreement, "Trade Secrets" (as defined below) or financial information
(collectively, "Confidential Information") concerning or belonging to Servicer
to any third party or use the same in competition with Servicer. For purposes of
this Agreement, Confidential Information does not include "Nonpublic Personal
Information" as defined in GLB. "Trade Secret" shall mean the whole or any
portion or phase of any technical information, design, process, procedure,
formula, improvement, algorithm, method, technique, confidential business or
financial information, or other information relating to any business of Servicer
that is not generally known by the public. Servicer and Lender specifically
agree that the format used to transfer Lender's data contains confidential and
proprietary trade secret information that is the exclusive property of Servicer.
Servicer makes no claim to the specific data contained in any printout given to
Lender and recognizes that said data is the exclusive property of Lender.
Servicer and Lender agree, however, that all aspects of the underlying computer
program, algorithms, methods of processing, specific design and layout, report
format, and the unique processing techniques and interactions of the various
aspects of Servicer's computer program are trade secrets of, proprietary to, and
owned exclusively by Servicer.

     20.2. In accordance with applicable law, the Lender agrees that in the
event Servicer grants access to any Confidential Information, to forever
thereafter keep the same confidential. Lender also agrees to keep Confidential
Information and material (both written and verbal) relating to any Lender,
vendor, or other party transacting business with Servicer. Lender, its agents
and employees, further agrees not to release, share, use, or disclose the same
without the prior written permission of Servicer except to only those of
Lender's employees, agents, or advisors having a need to know the same for
purposes related to this Agreement.

     20.3. Lender, its agents, employees, and advisors, recognize the disclosure
of Confidential Information by Lender, or Lender's agents or advisors may give
rise to irreparable injury to Servicer inadequately compensable in damages and
that accordingly, Servicer may seek and obtain injunctive relief or damages
against the disclosure or threatened disclosure, in addition to any other legal
remedies, including attorney's fees, which may be available. The parties agree,
however, that the duty to protect Confidential Information shall not include
data, information, or materials which the Lender can demonstrate is publicly
available by other than unauthorized disclosures by other parties. All
confidentiality requirements shall survive the termination or cancellation of
this Agreement.

     21. INTELLECTUAL PROPERTY PROTECTION. The parties agree that all right,
title and interest of whatever nature in Servicer's user manuals, training
materials, computer programs (including both source and object code), routines,
structures, layout, report formats, together with all subsequent versions,
enhancements and supplements to said programs, all copyright rights, and all
oral or written information relating to Servicer's intellectual property
conveyed in confidence by Servicer to Lender pursuant to this Agreement which is
not generally known to the public and which gives Servicer an advantage over its
competitors who do not know or use such information are also Confidential
Information. All forms of Servicer's intellectual property of whatever nature is
and shall remain the sole and exclusive property of Servicer. Lender may only
use aforementioned materials and tools in form and manner approved by Servicer
in writing.

     22. MODIFICATION OF EQUIPMENT, COMPUTER PROGRAMS AND PROCEDURES. The
Servicer reserves the right to change any part or all of its equipment and
computer

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 11

<PAGE>

programs, and its procedures, reports and services, relating to the manner of,
or the methodology used in, servicing Education Loans as set forth in this
Agreement without the prior consent of the Lender; provided, however, that in no
event shall such change abrogate or in any way modify the obligations of the
Servicer to comply with the Education Act and Regulations as set forth above. It
is specifically understood that the intent of this paragraph is to allow the
Servicer flexibility in the methods and techniques of servicing subject to full
compliance with this Agreement.

     23. TERMINATION.

     a.  If at any time during this Agreement either party refuses or fails to
         perform in a material fashion any portion of this Agreement, the other
         party will provide written notice describing the nonperformance. If the
         nonperforming party fails or refuses to correct the nonperformance
         within thirty (30) days after receipt of written notice, the other
         party may terminate this Agreement.

     b.  If the delinquency rate of the Lender's portfolio of Education Loans
         being serviced hereunder (as calculated during month-end processing in
         accordance with the formula described below) exceeds twenty percent
         (20%) for any three consecutive months during the term of this
         Agreement, the Servicer may terminate the Agreement by providing sixty
         (60) days prior written notice to the Lender. The Servicer may, at its
         option, propose modified servicing fees in lieu of exercising the
         termination provisions of this section. Delinquency rate is defined as
         the number of Accounts 31- 270 days delinquent divided by the total
         number of Accounts in repayment status.

     24. PROCEDURES IN EVENT OF SERVICER BREACH. If this Agreement is terminated
by Lender due to a breach by Servicer, a deconversion fee of Three dollars
($3.00) per Account plus any other reasonable expenses incurred in connection
with the transfer of Lender's files and other required information and reports
off of the Servicer system, shall be paid by Lender. In such case, Servicer
shall turn over to Lender all Education Loan files in accordance with acceptable
standards as described in the Common Manual to support claims filing function.
Servicer shall make available to Lender the original promissory note, along with
an electronic record of Servicer servicing documenting information related to
deferments, forbearances, disbursements, and guarantees (the "Electronic
History"). Electronic History shall be provided in Servicer's standard format.

     25. NOTICES. All notices or communications between the parties shall be
addressed as follows: If to Servicer: President, Nelnet Loan Services, Inc.,
6420 Southpoint Parkway, Jacksonville, FL, 32216, with a copy to General
Counsel, Nelnet Corporation, 3015 South Parker Road, Suite 400, Aurora, CO
80014, and if to Lender: ___________________ or to such other address as may be
indicated by the parties. Any notice shall be deemed given upon mailing if by
registered or certified mail, and upon receipt in every other case.

     26. GOVERNING LAW. This Agreement is executed and delivered within the
State of Colorado. The parties agree this Agreement shall be construed,
interpreted and applied in accordance with the laws of the State of Colorado,
and that the state and Federal courts and authorities within Colorado shall have
sole jurisdiction and venue over all controversies which may arise with respect
to the execution, interpretation and compliance with this Agreement.

     27. CHANGES IN WRITING. This Agreement, including this provision, shall not
be modified or changed except by a writing signed by all parties hereto.

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 12

<PAGE>

     28.  SEVERABILITY. If a court of competent jurisdiction finds any of the
provisions of this Agreement to be so overly broad as to be unenforceable or
invalid for any other reason, the invalid provisions will be reduced in scope or
eliminated by the court to the extent deemed necessary by the court to render
the remaining provisions of this Agreement reasonable and enforceable.

     29.  PERSONS BOUND. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their legal representatives, successors and
assigns.

     30. ASSIGNMENT. This Agreement shall not be assigned by either party
without the prior written consent of the other party which consent shall not be
unreasonably withheld. However, notwithstanding the previous sentence, Servicer
may in its sole discretion, without Lender's consent, assign or delegate any of
its duties or obligations hereunder to an entity affiliated with Servicer. In
such case, the assignee or delegate shall be bound by all terms and conditions
of this Agreement related to such assignment or delegation.

     31.  TITLES. The titles used in this Agreement are intended for convenience
and reference only. They are not intended and shall not be construed to be a
substantive part of this Agreement or in any other way to affect the validity,
construction or effect of any of the provisions of this Agreement.

     32.  WAIVER. The waiver or failure of either party to exercise in any
respect any right provided for herein shall not be deemed a waiver of any
further right hereunder.

     33.  FORCE MAJEURE. The foregoing provisions of this Agreement are subject
to the following limitation: If by reason of a force majeure Servicer is unable
in whole or in part to carry out any agreement on its part herein contained,
Servicer shall not be deemed in default during the continuance of such
inability. The term "force majeure" as used herein shall mean, without
limitation, the following: acts of God, strikes, lockouts, or other industrial
disturbances; acts of public enemies; order or restraint of any kind of the
government of the United States of America or of the States of Colorado,
Nebraska or Florida or Cities of Aurora, Colorado, Lincoln, Nebraska or
Jacksonville, Florida, or any of their departments, agencies or officials, or
any civil or military authority; insurrections; riots; landslides; earthquakes;
fires; storms; droughts; floods; explosions; breakage or accident to machinery,
equipment, transmission pipes or canals; or any other cause or event not
reasonably within the control of Servicer.

     34.  HIRING. Lender agrees that during the term of this Agreement and any
extensions or renewals thereof, and for one year thereafter, Lender shall not
solicit for hire, or knowingly allow its employees to solicit for hire, any
employees of Servicer without the prior written consent of Servicer.

     35. AUDITS. Lender, at its own expense, with prior notice to Servicer and
during Servicer's normal business hours, may perform or arrange to have audits
performed of Servicer's servicing activities on Lender's Education Loans.
Servicer shall provide up to forty (40) hours of audit assistance per year.
Lender will reimburse Servicer for its staff time and expense beyond said forty
(40) hours.

     36.  CORPORATE OBLIGATION. This Agreement is solely a corporate obligation
of Servicer and Lender and no personal liability against any parent, subsidiary,
affiliate, incorporator, member, officer, employee, or trustee, past present, or
future of the parties shall attach to any of the foregoing as a result of this
Agreement, the provision of the

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 13

<PAGE>

Services pursuant to this Agreement, or any breach of this Agreement; the
parties hereto agreeing that the sole recourse is against the Servicer (or its
successors) or the Lender (or its successors). Notwithstanding the foregoing,
any incorporator, member, officer, employee, or trustee shall have
responsibility to the extent such individual receives a fraudulent conveyance
from Servicer or Lender.

     37. ENTIRE AGREEMENT. This is the entire and exclusive statement of the
Agreement between the parties, which supersedes and merges all prior proposals,
understandings and all other agreements oral and written, between the parties
relating to this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                                       NELNET LOAN SERVICES, INC.

                                       By:


                                       Name: Edward P. Martinez

                                       Title: Sr. Vice President/General Counsel


                                       LENDER

                                       By: _____________________________________

                                       Name: ___________________________________
                                              (PLEASE PRINT)

                                       Title:___________________________________

NELNET LOAN SERVICES, INC. SERVICING AGREEMENT
11/13/2001
PAGE 14

<PAGE>

                                  SCHEDULE 3.2
                                       TO
                               SECURITY AGREEMENT

   OFFICE LOCATIONS; FICTITIOUS NAMES; TAX I.D. NUMBER; ORGANIZATIONAL NUMBER

OFFICE LOCATIONS:

  Headquarters Office:             3015 South Parker Road
                                   Suite 400
                                   Aurora, Colorado 80014

  Other Locations:                 121 South 13th, Suite 301
                                   Lincoln Nebraska

                                   First Trust Center
                                   180 East Fifth Street, Suite 1350
                                   St. Paul, Minnesota

                                   6420 Southpoint Parkway
                                   Jacksonville, Florida

NAMES:

  Current Name:                    NELNET Loan Services, Inc.

  Prior Name:                      UNIPAC Service Corporation

  Fictitious Names:                None

TAX PAYER I.D. NO.:

                                                                    SCHEDULE 3.2