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, 2000 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 333-08929
                         ------------------------------
                        NELNET STUDENT LOAN CORPORATION-1
             (Exact name of registrant as specified in its charter)
                   (formerly Union Financial Services-1, Inc.)


                   Nevada                              86-0817755
State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

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, 2000: NONE

        THE NUMBER OF SHARES  OUTSTANDING  OF  REGISTRANT'S  COMMON  STOCK AS OF
MARCH 15, 2001 WAS 1,000.
                       -----------------------------------
                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None

                                       1
<PAGE>


                                TABLE OF CONTENTS

                                                                         Page
                                                                         ----

PART I

   ITEM 1.     BUSINESS.....................................................2
   ITEM 2.     PROPERTIES...................................................8
   ITEM 3.     LEGAL PROCEEDINGS............................................8
   ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..........8

PART II
   ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
               STOCKHOLDER MATTERS..........................................8
   ITEM 6.     SELECTED FINANCIAL DATA......................................9
   ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
               CONDITION AND RESULTS OF OPERATIONS.........................10
   ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
               MARKET RISK.................................................12
   ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................13
   ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
               ACCOUNTING AND FINANCIAL DISCLOSURE.........................13

PART III
   ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..........14
   ITEM 11.    EXECUTIVE COMPENSATION......................................15
   ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
               OWNERS AND MANAGEMENT.......................................16
   ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............16

PART IV
   ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
               FORM 8-K....................................................17

SIGNATURES.................................................................20


                                        i
<PAGE>


                                     PART I

ITEM 1.   BUSINESS

THE COMPANY

               NELNET Student Loan Corporation-1 (the "Company"), formerly Union
Financial  Services-1,  Inc.,  was  incorporated  under the laws of the State of
Nevada on February  28,  1996.  Effective  March 2, 2000,  the Company  became a
wholly owned subsidiary of NelNet,  Inc. and a wholly owned indirect  subsidiary
of UNIPAC Service Corporation,  a Nebraska Corporation  ("UNIPAC").  UNIPAC is a
privately held 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  qualified  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").

               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

                                       2

<PAGE>

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,  Inc.  ("NelNet")  acts as
servicer (the  "Servicer") of the Company's  Eligible Loans in accordance with a
Servicing  Agreement,  dated as of July 1,  1999  (the  "Servicing  Agreement").
UNIPAC  and  InTuition,   Inc.,  a  Florida  corporation  ("InTuition")  act  as
subservicers  (the  "Subservicers")  and custodians  (the  "Custodians")  of the
Eligible Loans in accordance with  Subservicing  Agreements  (the  "Subservicing
Agreements") between NelNet and UNIPAC and InTuition  respectively.  The Company
may appoint other  entities to act as a servicer or  subservicer  if approved by
the rating  agencies  which  rate the Notes.  UNIPAC  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.  UNIPAC's
corporate  headquarters  is  located  in Aurora,  Colorado.  InTuition  provides
student loan  servicing for clients  throughout the country under both timeshare
and full-service  agreements.  InTuition's corporate  headquarters is located in
Jacksonville, Florida.

                                       3
<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,  2000  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, 2000
was  $1,396,696,866.  Set  forth in Table A below is the  aggregate  outstanding
principal amount of Notes of each Class as of December 31, 2000.
<TABLE>
<CAPTION>

                                     TABLE A
            ORIGINAL PRINCIPAL AMOUNT OF NOTES ISSUED BY THE COMPANY
            AND THE OUTSTANDING AGGREGATE PRINCIPAL AMOUNT PER CLASS
                               (DECEMBER 31, 2000)

   Series      Class       Date Issued      Maturity Dates         Original               Principal
                                                               Principal Amount        Outstanding  at
                                                                                      December 31, 2000

<S>             <C>           <C>               <C>                  <C>                  <C>
1996A         A-1       March 8, 1996      July 1, 2014              $48,300,000          $48,300,000
1996A         A-2       March 8, 1996      July 1, 2014               48,300,000           48,300,000
1996A         B-1(*)    March 8, 1996      July 1, 2014               11,100,000       --------------
1996B         A-3       June 18, 1996      July 1, 2014               73,700,000           73,700,000
1996B         A-4       June 18, 1996      July 1, 2014               54,300,000           54,300,000
1996B         B-2(*)    June 18, 1996      July 1, 2014               14,200,000       --------------
1996C         A-5       October 31, 1996   July 1, 2005              225,000,000          120,900,000
1996C         A-6       October 31, 1996   July 1, 2014               75,500,000           75,500,000
1996C         B-3       October 31, 1996   July 1, 2025               15,600,000           15,600,000
1997A         B-4       March 20, 1997     July 1, 2030               30,800,000           30,800,000
1998A         A-7       December 22, 1998  August 1, 2005            125,000,000          125,000,000
1998A         A-8       December 22, 1998  September 1, 2005         125,000,000          125,000,000
1998A         A-9       December 22, 1998  December 1, 2005          125,000,000          125,000,000
1998A         A-10      December 22, 1998  October 1, 2032           100,000,000          100,000,000
1998A         A-11      December 22, 1998  November 1, 2032          100,000,000          100,000,000
1998A         A-12      December 22, 1998  December 1, 2032          100,000,000          100,000,000
1998A         B-5       December 22, 1998  December 1, 2032           70,000,000           70,000,000
1999A         A-13      July 1, 1999       December 1, 2032           70,000,000           70,000,000
1999A         A-14      July 1, 1999       December 1, 2032           70,000,000           70,000,000
1999A         A-15      July 1, 1999       December 1, 2032           70,000,000           70,000,000
1999A         A-16      July 1, 1999       December 1, 2032           68,700,000           68,700,000
                                                                      ----------           ----------
                                                                  $1,620,500,000       $1,491,100,000
                                                                  ==============       ==============
</TABLE>

(*) These Notes were defeased with the proceeds of the Series 1997A Notes and as
of March 20, 1997 are no longer deemed to be outstanding under the Indenture.


                                       4
<PAGE>

               Set  forth  in  Table B  below  is the  interest  rate  for  each
outstanding Class of Notes,  indicating whether the interest rate is fixed or is
calculated  based on the applicable  Auction Rate, LIBOR Rate, or Treasury Rate,
as the case may be. 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.  The term "LIBOR" Rate" refers to the rate of interest per annum
as  determined  by  reference to the London  Interbank  Offered  Rate.  The term
"Treasury  Rate"  refers  to the rate of  interest  per annum as  determined  by
reference to United States Treasury securities.

                                     TABLE B
                       APPLICABLE INTEREST RATE PER CLASS
                               (December 31, 2000)


                      CLASS                     CALCULATION METHOD
                      -----                     ------------------
                                                   AUCTION RATE
                       A-1                            6.8500%
                       A-2                            6.9000%
                       A-3                            6.9500%
                       A-4                            6.9500%
                       A-6                            6.9500%
                       A-10                           6.9500%
                       A-11                           6.8400%
                       A-12                           6.8500%
                       A-13                           6.9000%
                       A-14                           7.0200%
                       A-15                           6.8400%
                       A-16                           6.8750%
                       B-5                            6.9790%

                                                 TREASURY RATE (1)
                       A-5                             6.42%

                                                  LIBOR RATE (1)
                       B-3                            7.3013%
                       B-4                            7.2713%

                                                    FIXED RATE
                       A-7                             5.48%
                       A-8                             5.50%
                       A-9                             5.73%

          --------------------
          (1)     Treasury Bill Rate and LIBOR Rate based on the Smith
                               Barney stated rate.



                                       5
<PAGE>

               Set forth in the tables below are the characteristics of Eligible
Loans held in the Trust Estate on December 31,  2000.  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
                               (December 31, 2000)


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

          Consolidated                            $723,362,397        51.79  %
          PLUS                                      27,803,408         1.99
          SLS                                       13,887,824         1.00
          Stafford-Subsidized                      436,201,988        31.23
          Stafford-Unsubsidized                    195,441,249        13.99
                                                   -----------        -----

                Total                           $1,396,696,866       100.00  %
                                                ==============       ======


          Number of Borrowers                          155,281
          Average Outstanding Principal
          Balance Per Borrower                          $8,995
          Number of Loans                              258,252
          Average Outstanding Principal
          Balance Per Loan                              $5,408
          Approximate Weighted Average
                 Remaining Term (Months)                   147



                                       6
<PAGE>


                                     TABLE D
               DISTRIBUTION OF THE ELIGIBLE LOANS BY INTEREST RATE
                               (December 31, 2000)


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

 Less than 7.50%                                  $26,597,583          1.90  %
 7.50% to 7.99%                                    68,240,322          4.89
 8.00% to 8.49%                                   754,749,407         54.03
 8.50% to 8.99%                                    79,583,361          5.70
 9.00% to 9.49%                                   449,430,057         32.18
 9.50% or greater                                  18,096,136          1.30
                                                   ----------          ----

      Total                                    $1,396,696,866        100.00  %
                                               ==============        ======





                                     TABLE E
               DISTRIBUTION OF THE ELIGIBLE LOANS BY SCHOOL TYPES
                               (December 31, 2000)

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

              2-Year                              $87,729,430          6.28  %
              4-Year                              534,674,255         38.28
              Proprietary                          50,716,038          3.63
              Unknown                                 214,746           .02
              Consolidation                       723,362,397         51.79

                      Total                    $1,396,696,866        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.


                                       7
<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.


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

               There were no matters  submitted  to a vote of  security  holders
during the fourth  quarter of the fiscal year ended  December 31, 2000.



                                     PART II

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

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

               As of March 15, 2001,  NelNet,  a subsidiary  of UNIPAC,  was the
only record holder of the  Company's  outstanding  shares of common  stock.  The
Company pays dividends annually. On December 30, 1999 dividends were paid in the
amount of $4,275,000  and on December 28, 2000 dividends were paid in the amount
of $3,850,000.


                                       8
<PAGE>



ITEM 6.        SELECTED FINANCIAL DATA

               The following table sets forth the Company's  selected  financial
data as of December 31, 2000,  1999, 1998, 1997 and 1996, for each of the fiscal
years ended  December 31, 2000,  1999,  1998,  and 1997 and for the period ended
December  31,  1996.  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.
<TABLE>
<CAPTION>

                        NELNET STUDENT LOAN CORPORATION-1
                             SELECTED FINANCIAL DATA

                                             Year Ended     Year Ended     Year Ended     Year Ended    Period Ended
STATEMENT OF INCOME DATA:                   December 31,   December 31,   December 31,   December 31,   December 31,
                                                2000           1999           1998           1997         1996 (1)
                                                ----           ----           ----           ----         --------
<S>                                          <C>            <C>            <C>             <C>           <C>
Revenues:
    Loan interest.........................   $123,888,615   $106,179,544   $ 43,428,726    $41,671,560   $ 15,636,042
    Investment interest...................      3,050,187      3,424,139      1,962,767      2,268,878      1,373,140
    Other.................................        752,981        587,699         86,366        195,084         17,449
                                              -----------    -----------     ----------     ----------     ----------
            Total revenues................    127,691,783    110,191,382     45,477,859     44,135,522     17,026,631
                                              -----------    -----------     ----------     ----------     ----------
Expenses:
    Interest on notes.....................     96,106,454     78,821,125     34,076,786     32,782,396     11,987,255
    Loan servicing fees to related party .     13,235,227     12,733,854      5,475,146      4,917,318      2,255,564
    Financing fees to parent .............             --             --             --        423,112      1,919,207
    Trustee and broker fees...............      2,817,983      2,415,554        950,018        915,380        550,899
    Amortization of debt issuance costs...      1,307,783      1,259,135        558,734        494,106        250,992
    Amortization of loan premiums.........      5,355,203      4,767,963      2,008,889      1,441,526        438,584
    Provision for loan losses.............        590,000      1,150,000        600,000        133,408          4,441
    Other general and administrative .....      2,707,349      3,487,853      1,344,895      1,021,474        433,515
                                              -----------    -----------     ----------     ----------     ----------
            Total expenses................    122,119,999    104,635,484     45,014,468     42,128,720     17,840,457
                                              -----------    -----------     ----------     ----------     ----------
            Income (loss) before income
            tax expense (benefit).........      5,571,784      5,555,898        463,391      2,006,802      (813,826)

Income tax expense (benefit) .............      2,005,842      2,075,128        169,138        710,717      (274,968)
                                              -----------    -----------     ----------     ----------     ----------
            Net income (loss) ............    $ 3,565,942    $ 3,480,770     $  294,253    $ 1,296,085    $ (538,858)
                                              ===========    ===========     ==========     ==========    ===========


Ratio of earnings to fixed charges........         1.06%          1.07%        1.01%           1.06%         .93% (2)

BALANCE SHEET DATA:
Cash and cash equivalents ................  $      29,268  $      41,727  $          --    $        --   $         --
Restricted cash - held by trustee ........     51,432,752     49,889,363    664,815,085     39,542,382     65,402,585
Student loans receivable, net ............  1,417,193,283  1,492,739,182    639,740,073    525,005,954    491,046,915
Total assets..............................  1,506,580,171  1,580,406,364  1,322,564,317    575,292,144    568,171,986
Notes payable ............................  1,491,100,000  1,567,300,000  1,316,500,000    571,500,000    566,000,000
Total liabilities.........................  1,497,752,050  1,573,928,114  1,321,511,837    574,533,917    568,709,844
Stockholder's equity (deficit)............      8,828,121      6,478,250      1,052,480        758,227      (537,858)
</TABLE>

(1) The Company was incorporated on February 28, 1996.
(2) Earnings were inadequate to cover fixed charges by  $813,826.



                                       9
<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  February  28,  1996  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 six (6) series of Notes  consisting of twenty-one  (21) 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, 2000,  the Company held  approximately  $1.397  billion in Eligible
Loans.  Throughout 2000, the Company purchased portfolios of Eligible Loans from
various financial institutions and related parties.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

               REVENUES. Revenues for the year ended December 31, 2000 consisted
primarily of interest on Eligible Loans, which totaled $123,888,615, compared to
$106,179,544  for the year ended  December 31, 1999, an increase of 16.69%.  The
amount of interest  reported  for the year ended  December  31, 2000 was derived
from Eligible Loans in an aggregate  principal amount, net of allowance for loan
losses, of  $1,417,193,283  at December 31, 2000,  compared to $1,492,739,182 at
December 31, 1999. The Company's average net investment in Eligible Loans during
the year ended December 31, 2000 was $1,426,498,815 (excluding funds held by the
Trustee),  compared to $1,332,494,385  for the year ended December 31, 1999, and
the average  effective annual interest rate of interest income on Eligible Loans
was approximately 8.64%, compared to 7.97% for the year ended December 31, 1999.
The Company  also  received  investment  interest  and other income for the year
ended December 31, 2000 in the amounts of $3,050,187 and $752,981, respectively,
compared to $3,424,139  and $587,699  respectively,  for the year ended December
31,  1999.  The decrease in  investment  interest was a result of the cash being
utilized to acquire student loans.

               EXPENSES. Expenses for the year ended December 31, 2000 consisted
primarily  of  interest  on  the  Company's   outstanding  Notes  which  totaled
$96,106,454,  compared to  $78,821,125  for the year ended December 31, 1999, an
increase of 21.93%.  The amount of interest expense  reported depends  primarily
upon the amount of Notes outstanding  during the years and the interest rates on
such Notes. The increase in interest  expense was attributable  primarily to the
issuance of additional  notes in the amount of  $278,700,000 on July 1, 1999 and
an increase in interest  rates.  The  Company's  average  debt  outstanding  was
approximately  $1,530,417,000 for the year ended December 31, 2000,  compared to
$1,446,050,000 for the year ended December 31, 1999, and the average annual cost
of  borrowings  was  approximately  6.28% for the year ended  December 31, 2000,
compared  to  approximately  5.45% for the year ended  December  31,  1999.  The
Company also  incurred  loan  servicing  fees to related  party in the amount of
$13,235,227  for the year ended December 31, 2000,  compared to $12,733,854  for
the year ended  December  31,  1999.  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  incurred by the Company were higher in 2000 because the Company
held,  on  average,  more  student  loans  in 2000.  Trustee  and  broker  fees,
amortization  of debt issuance costs and  amortization  of loan premiums for the
year ended December 31, 2000 amounted to  $2,817,983,  $1,307,783 and $5,355,203
respectively,  compared to $2,415,554,  $1,259,135 and $4,767,963  respectively,
for the year ended  December 31, 1999.  The change in the  amortization  of loan
premiums  from  1999 to 2000  is  attributable  to an  increase  in the  rate of
amortization  due to an increase in principal  payments on the loans.  Provision
for loan  losses for the year ended  December  31, 2000  amounted  to  $590,000,
compared to $1,150,000  for the year ended  December 31, 1999.  The reduction in
the  provision  for loan losses in 2000 is a result of  additional  amounts that
were  incurred  for the  provision  of loan  losses  during  1999 to reflect the
appropriate  allowance  amounts  in  comparison  to the  estimated  defaults  at
December 31, 1999. Other general and administrative  expenses for the year ended
December 31, 2000 amounted to  $2,707,349,  compared to $3,487,853  for the year
ended December 31, 1999.  This  reduction is due to a decline in  administrative
fees  incurred  to the  parent.  Administrative  fees to the parent in 1999 were
higher than amounts in 2000 as a result of additional  amounts reimbursed to the
parent in 1999 as permitted by the trust  indenture.  Income tax expense for the
year ended December 31, 2000 amounted to $2,005,842,  compared to $2,075,128 for
the year ended December 31, 1999. The decrease in income tax expense is due to a
decrease  in the  effective  income tax rate used in  arriving at the income tax
expense  for  2000.  The  reduction  in the  income  tax rate  was a  result  of
reflecting the overall effective income tax rate on a consolidated basis.

                                       10
<PAGE>

YEAR ENDED DECEMBER 31, 1999 COMPARED TO YEAR ENDED DECEMBER 31, 1998

               REVENUES. Revenues for the year ended December 31, 1999 consisted
primarily of interest on Eligible Loans, which totaled $106,179,544, compared to
$43,428,726  for the year ended  December 31, 1998, an increase of 144.49%.  The
amount of interest  reported  for the year ended  December  31, 1999 was derived
from Eligible Loans in an aggregate  principal amount, net of allowance for loan
losses,  of  $1,492,739,182  at December 31, 1999,  compared to  $639,740,073 at
December 31, 1998. The Company's average net investment in Eligible Loans during
the year ended December 31, 1999 was $1,332,494,385 (excluding funds held by the
Trustee), compared to $539,082,229 for the year ended December 31, 1998, and the
average  effective annual interest rate of interest income on Eligible Loans was
approximately 7.97%, compared to 8.06% for the year ended December 31, 1998. The
Company also  received  investment  interest and other income for the year ended
December  31,  1999 in the amounts of  $3,424,139  and  $587,699,  respectively,
compared to $1,962,767 and $86,366 respectively, for the year ended December 31,
1998.  The increase in  investment  interest was  attributable  primarily to the
investment of funds for a period of time as a result of the additional  issuance
of Notes .

               EXPENSES. Expenses for the year ended December 31, 1999 consisted
primarily  of  interest  on  the  Company's   outstanding  Notes  which  totaled
$78,821,125,  compared to  $34,076,786  for the year ended December 31, 1998, an
increase of 131.30%.  The amount of interest expense depends  primarily upon the
amount of Notes  outstanding  during  the years and the  interest  rates on such
Notes.  The  increase in  interest  expense was  attributable  primarily  to the
issuance of additional  notes in the amount of  $278,700,000 on July 1, 1999 and
$745,000,000  in December  1998.  The  Company's  average debt  outstanding  was
approximately  $1,446,050,000 for the year ended December 31, 1999,  compared to
$633,583,000  for the year ended  December 31, 1998, and the average annual cost
of  borrowings  was  approximately  5.45% for the year ended  December 31, 1999,
compared  to  approximately  5.38% for the year ended  December  31,  1998.  The
Company also  incurred  loan  servicing  fees to related  party in the amount of
$12,733,854 for the year ended December 31, 1999, compared to $5,475,146 for the
year ended December 31, 1998. 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
related  party  incurred by the Company  were higher in 1999 because the Company
held more student loans in 1999.  Trustee and broker fees,  amortization of debt
issuance costs and amortization of loan premiums for the year ended December 31,
1999 amounted to $2,415,554, $1,259,135 and $4,767,963,  respectively,  compared
to $950,018, $558,734 and $2,008,889,  respectively, for the year ended December
31,  1998.  Provision  for loan  losses for the year  ended  December  31,  1999
amounted to  $1,150,000  compared to $600,000  for the year ended  December  31,
1998.  The  increase  in the  provision  for loan  losses in 1999 is a result of
additional  amounts that were incurred for the provision of loan losses in order
to reflect the  appropriate  allowance  amounts in  comparison  to the estimated
defaults at December 31, 1999. Other general and administrative expenses for the
year ended December 31, 1999 amounted to $3,487,853,  compared to $1,344,895 for
the year ended  December 31, 1998.  The  increase in the  Company's  general and
administrative   expenses   was   attributable   primarily  to  an  increase  in
administrative  expenses as a result of the increase in Eligible  Loans.  Income
tax  expense  for the year ended  December  31,  1999  amounted  to  $2,075,128,
compared to an income tax  expense in the amount of $169,138  for the year ended
December 31, 1998.  This increase is a direct result of the income before income
tax expense in 1999 being  higher than the income  before  income tax expense in
1998.

               For the year ended  December 31,  2000,  there were no unusual or
infrequent  events or  transactions  or any  significant  economic  dangers that
materially affected the amount of reported income.

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 April 1, 2002.  The Company  began  redeeming  monthly a percentage of the
Class 1996-A5 Notes on May 1, 1999 with principal  receipts from Eligible Loans.
The Company plans to continue to do so monthly in the future, in accordance with
an Issuer Order delivered to the Trustee.  The remaining principal receipts from
Eligible Loans have been used to purchase Eligible Loans.

                                       11
<PAGE>

IMPACT OF INFLATION

               For the year ended  December  31,  2000,  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 majority
of the Notes  bear  interest  at a rate that is reset  periodically  by means of
auction  procedures,  or by  reference  to the  London  Interbank  Offered  Rate
("LIBOR") or a specified Treasury rate plus an applicable margin. 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 interest
rates on each  series of LIBOR  Rate  Notes  and  Treasury  Rate  Notes is based
generally on the LIBOR Rate or Treasury  Rate then in effect for the  applicable
interest rate period. 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,  LIBOR or 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).



                                       12
<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  Rate.  Thus,  the  Company's  analysis of the effect of different
interest rates on its cash flows was prepared assuming spreads of 30, 40, 60, 80
and 100 basis  points  between  91 Day  Treasury  Bills and 1 Month  LIBOR  (the
"NELNET-1 Ted Spread").  The NELNET-1 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-1 Net Spread").


--------------------------------------------------------------------------------
    T-BILL*                              NELNET-1  NET SPREAD

                 ----------- ----------- ------------- ------------ ------------
     7.00%           .84%        .78%        .64%          .51%        .38%
                 ----------- ----------- ------------- ------------ ------------
     6.50%           .72%        .65%        .52%          .39%        .25%
                 ----------- ----------- ------------- ------------ ------------
     6.00%           .59%        .53%        .39%          .26%        .13%
                 ----------- ----------- ------------- ------------ ------------
     5.50%           .60%        .53%        .40%          .26%        .13%
                 ----------- ----------- ------------- ------------ ------------
     5.00%           .64%        .57%        .44%          .31%        .17%
                 ----------- ----------- ------------- ------------ ------------
     4.50%           .75%        .68%        .55%          .41%        .28%
                 ----------- ----------- ------------- ------------ ------------

---------------- ----------- ----------- ------------- ------------ ------------
   NELNET-1
 TED SPREAD**         30          40          60            80          100
--------------------------------------------------------------------------------


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


               Generally,  increases in the NELNET-1 Ted Spread and decreases in
interest  rates  have the  effect of  reducing  the  NELNET-1  Net  Spread,  and
correspondingly, the Company's cash flows. For example, as of March 27, 2000 the
1 Month LIBOR rate was 5.055% and the 91 Day Treasury Bill Rate was 4.34%. Thus,
the NELNET-1 Ted Spread was  approximately 72 basis points  (5.055-4.34) and the
NELNET-1 Net Spread was approximately 41 basis points.  If, at the same interest
rate  (approximately  4.50%),  the  NELNET-1 Ted Spread is increased to 100, the
Company's cash flows are significantly  reduced,  as evidenced by a NELNET-1 Net
Spread of 28 basis points.  The Company,  however,  believes that a NELNET-1 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.


                                       13
<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>
Michael S.          Chairman      37   6801 S. 27th Street            Chief           February  Present
Dunlap                                 P.O. Box 82529                 Executive       1996
                                       Lincoln, Nebraska 68501        Officer of
                                                                      Union Bank
                                                                      and Trust
                                                                      Company;
                                                                      President,
                                                                      Farmers &
                                                                      Merchants
                                                                      Investment,
                                                                      Inc.;
                                                                      Chairman,
                                                                      NelNet, Inc.

Stephen F.          President     48   6991 East Camelback            Vice-Chairman,  February  Present
Butterfield                            Road, Suite B290               NelNet, Inc.;   1996
                                       Scottsdale, Arizona 85251      President
                                                                      Union
                                                                      Financial
                                                                      Services

Ronald W. Page        Vice        52   1801 California                Executive       February  Present
                   President,          Street                         Vice            1996
                    Treasurer          Suite 3920                     President of
                  and Secretary        Denver, CO 80202               Union
                                                                      Financial
                                                                      Services,
                                                                      Inc.

Ross Wilcox            --         58   4732 Calvert Street            Chairman of     February  Present
                                       Lincoln, Nebraska 68506        the Board of    1996
                                                                      Union Bank and
                                                                      Trust Company


Dr. Paul R. Hoff       --         66   Hernia Hill, Rural             Retired         February  Present
                                       Route 1                        Physician       1996
                                       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, 2002.


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"),  Mike 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 over 15 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.


                                       14
<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.

        RONALD W. PAGE,  VICE PRESIDENT,  TREASURER AND SECRETARY.  As executive
vice president,  treasurer and secretary of UFS, Mr. Page overseas the financial
operations  of the company  including  financial  planning  and  capital  market
operations.  Mr.  Page's  primary  responsibility,  however,  is  to  coordinate
financial  consulting  with NelNet,  which includes  preparation of asset-backed
securitization, warehousing activities, investor relations, underwriter liaison,
legal support, credit enhancement  coordination and rating agency relations. Mr.
Page has over 25 years experience in asset  securitization of student loans. His
experience  includes  taxable  and  tax-exempt   issuances  of  debt,  arranging
warehousing lines of credit,  asset-backed  commercial paper, conduit financing,
SEC S-3 filings,  private  placements  and  conversion of non-profit  tax-exempt
issuers to taxable  issuers.  Mr. Page  earned a Bachelor  of Science  degree in
business  administration from the University of Colorado and a Masters of Public
Administration in Public Policy Analysis from the American 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 UNIPAC.

               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 2000

               The Company has not issued any options.

LONG-TERM INCENTIVE PLAN AWARDS IN 2000

               The Company has no long-term incentive plan.


                                       15
<PAGE>

DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE IN 2000

               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 2000, 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 March 15, 2001,  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 August 1,  1996.  Under  the  Agreement,  NelNet
agreed:  (i) to assist the  Company in  developing  and  implementing  financing
transactions to enable the Company to purchase loans made to borrowers under the
Federal Family Education Loan Program (the "Loans"); (ii) to monitor, and to the
extent  required,  direct the Servicer in  connection  with its servicing of the
Loans; (iii) 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;  (iv)  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;  (v) 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;  (vi) to prepare for and furnish to the Company  estimates of  Maintenance
and  Operating  Expenses  (as  defined in the  Indenture)  and such  statistical
reports and cash flow  projections  as may be required  under the  Indenture  or
requested by the Company;  and (vii) 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  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


                                       16
<PAGE>

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. The Administrative Services
Agreement has been filed as an Exhibit to this Form 10-K.

               SERVICING  AGREEMENT.  The  Company  and  NelNet  entered  into a
Servicing Agreement (the "Servicing  Agreement") dated as of July 1, 1999. Under
the Servicing Agreement,  NelNet services the Eligible Loans. NelNet owns all of
the issued and outstanding stock of the Company and is a wholly-owned subsidiary
of  UNIPAC.  NelNet  entered  into  subservicing   agreements  with  UNIPAC  and
InTuitition (the "Subservicing  Agreements") dated as of July 1, 1999. Under the
Subservicing   Agreements,   UNIPAC  and  InTuition,  as  Subservicers,   assume
substantially  all of the duties of the Servicer  under the Servicing  Agreement
for the term of the  Servicing  Agreement.  NelNet  owns all of the  issued  and
outstanding shares of voting stock of the parent  corporation of InTuition.  The
Company  believes that the terms and conditions of the Servicing  Agreement (and
the subservicing  arrangements)  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 and related
parties including,  but not limited to, Union Bank and Trust Company,  InTuition
Holdings,  Inc., NHELP-I,  Inc., and NEBHELP, Inc. pursuant to which the Company
has purchased  Eligible Loans.  NHELP-I,  Inc. and NEBHELP,  Inc. are subsidiary
corporations  of NelNet.  Certain  of the  shareholders  of UNIPAC  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 Union Bank and
Trust Company,  InTuition Holdings,  Inc., NHELP-I,  Inc., and NEBHELP, Inc. 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 October  1997.  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.

                                       17
<PAGE>


        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  Annual Report on Form 10-K
                 for the fiscal year ended December 31, 1996.)

            3.2  Certificate of Amendment to the Articles of Incorporation of
                 Union Financial Services-1, Inc. (Incorporated by reference to
                                -
                 the Company's Quarterly Report on Form 10-Q dated September 30,
                 1999.)

            3.3  Bylaws of the Company (Incorporated by reference herein to the
                 Company's  Annual Report on Form 10-K for the fiscal year ended
                 December 31, 1996.)

            4.1  Second  Amended  and  Restated  Indenture  by  and  between the
                 Company and Norwest  Bank  Minnesota,  N.A.  (Incorporated   by
                 reference  herein to the Company's current  report on Form 8-K,
                 filed January 7, 1997.)

            4.2  Series 1996C Supplemental Indenture by and between the Company
                 and Norwest Bank Minnesota, N.A. (Incorporated by reference
                 herein to the Company's current report on Form 8-K, filed
                 January 7, 1997.)

          4.2.1  1998  Supplemental  Indenture  by and  between  the Company and
                 Zions First National Bank  (Incorporated by reference herein to
                 the  Company's  current  report  on Form 8-K,  filed  January 6
                 1999.)

          4.2.2  Series 1999 Supplemental Indenture of Trust by and between the
                 Company and Zions First National Bank (Incorporated by
                 reference herein to the Company's  current report on Form 8-K,
                 filed July 8, 1999.)

           10.1  Servicing  Agreement,  dated as of July 1, 1999, by and between
                 the  Company  and   National   Education   Loan   Network  Inc.
                 (Incorporated by reference herein to the Company's Registration
                 Statement on Form S-3 (File No. 333-75693).)


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.



                                       18
<PAGE>


                          INDEX TO FINANCIAL STATEMENTS


FINANCIAL STATEMENTS OF NELNET STUDENT LOAN CORPORATION-1

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

Balance Sheets as of December 31, 2000 and 1999............................. F-2

Statements of Income for the years ended December 31, 2000, 1999 and 1998... F-3

Statements of Stockholder's Equity for the years ended December 31,
2000, 1999 and 1998........................................................  F-4

Statements of Cash Flows for the years ended December 31, 2000,
1999 and 1998..............................................................  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.



                                       19
<PAGE>
                        NELNET STUDENT LOAN CORPORATION-1
                   (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

                              Financial Statements

                           December 31, 2000 and 1999

                   (With Independent Auditors' Report Thereon)


<PAGE>



                          INDEPENDENT AUDITORS' REPORT



    The Board of Directors
    NELNET Student Loan Corporation-1:


    We have audited the accompanying balance sheets of NELNET Student Loan
    Corporation-1, a wholly-owned subsidiary of NelNet, Inc., as of December 31,
    2000 and 1999 and the related statements of income, stockholder's equity and
    cash flows for each of the years in the three-year period ended 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-1 as of December 31, 2000 and 1999 and the results of its
    operations and its cash flows for each of the years in the three-year period
    ended December 31, 2000, in conformity with accounting principles generally
    accepted in the United States of America.

    /s/KPMG LLP
    February 7, 2001
    Lincoln, Nebraska


                                      F-1
<PAGE>
                        NELNET STUDENT LOAN CORPORATION-1
                  (a wholly-owned subsidiary of NelNet, Inc.)

<TABLE>
<CAPTION>
                                 Balance Sheets

                           December 31, 2000 and 1999




                            ASSETS                                     2000             1999
                                                                   --------------  ---------------
<S>                                                              <C>                       <C>
Cash and cash equivalents                                        $        29,268           41,727
Student loans receivable, net of allowance of $1,208,929 in 2000
   and $1,336,294 in 1999                                          1,417,193,283    1,492,739,182
Accrued interest receivable                                           31,653,602       30,162,766
Restricted cash - held by trustee                                     51,432,752       49,889,363
Debt issuance costs, net of accumulated amortization of $2,961,562
   in 2000 and $2,533,121 in 1999                                      5,941,299        7,249,082
Deferred tax asset                                                       329,967          324,244
                                                                  --------------  ---------------

           Total assets                                          $ 1,506,580,171    1,580,406,364
                                                                   ==============  ===============

             LIABILITIES AND STOCKHOLDER'S EQUITY

Liabilities:
   Notes payable                                                 $ 1,491,100,000    1,567,300,000
   Accrued interest payable                                            4,835,359        4,801,540
   Other liabilities                                                   1,682,848        1,734,065
   Income taxes payable to parent                                        133,843           92,509
                                                                   --------------  ---------------

           Total liabilities                                       1,497,752,050    1,573,928,114
                                                                   --------------  ---------------

Stockholder's equity:
   Common stock, no par value, authorized 1,000 shares;
     issued and outstanding 1,000 shares                                   1,000            1,000
   Additional paid-in capital                                          8,827,121        6,220,000
   Retained earnings                                                          --          257,250
                                                                   --------------  ---------------

           Total stockholder's equity                                  8,828,121        6,478,250

Commitments and contingencies
                                                                   --------------  ---------------

           Total liabilities and stockholder's equity            $ 1,506,580,171    1,580,406,364
                                                                   ==============  ===============


See accompanying notes to financial statements.
</TABLE>

                                       F-2
<PAGE>

                        NELNET STUDENT LOAN CORPORATION-1
                   (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

<TABLE>
<CAPTION>
                              Statements of Income

                  Years ended December 31, 2000, 1999 and 1998




                                                            2000           1999         1998
                                                         ------------  ------------- ------------
<S>                                                    <C>              <C>           <C>
Revenues:
   Loan interest                                       $ 123,888,615    106,179,544   43,428,726
   Investment interest                                     3,050,187      3,424,139    1,962,767
   Other                                                     752,981        587,699       86,366
                                                         ------------  ------------- ------------

           Total revenues                                127,691,783    110,191,382   45,477,859
                                                         ------------  ------------- ------------

Expenses:
   Interest on notes                                      96,106,454     78,821,125   34,076,786
   Loan servicing fees to related party                   13,235,227     12,733,854    5,475,146
   Trustee and broker fees                                 2,817,983      2,415,554      950,018
   Amortization of debt issuance costs                     1,307,783      1,259,135      558,734
   Amortization of loan premiums                           5,355,203      4,767,963    2,008,889
   Provision for loan losses                                 590,000      1,150,000      600,000
   Other general and administrative                        2,707,349      3,487,853    1,344,895
                                                         ------------  ------------- ------------

           Total expenses                                122,119,999    104,635,484   45,014,468
                                                         ------------  ------------- ------------

           Income before income tax expense                5,571,784      5,555,898      463,391

Income tax expense                                         2,005,842      2,075,128      169,138
                                                         ------------  ------------- ------------

           Net income                                  $   3,565,942      3,480,770      294,253
                                                         ============  ============= ============

</TABLE>

See accompanying notes to financial statements.

                                       F-3
<PAGE>

                        NELNET STUDENT LOAN CORPORATION-1
                  (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

<TABLE>
<CAPTION>
                       Statements of Stockholder's Equity

                  Years ended December 31, 2000, 1999 and 1998




                                                         ADDITIONAL                    TOTAL
                                               Common    paid-in       Retained    stockholder's
                                               stock      capital       earnings      equity
                                              ---------  -----------   -----------  ------------

<S>                                           <C>             <C>         <C>           <C>
Balance at December 31, 1997                $    1,000           --       757,227       758,227

Net income                                          --           --       294,253       294,253
                                              ---------  -----------   -----------  ------------

Balance at December 31, 1998                     1,000           --     1,051,480     1,052,480

Net income                                          --           --     3,480,770     3,480,770
Capital contribution from parent                    --    6,220,000            --     6,220,000
Dividends paid - $4,275 per share                   --           --    (4,275,000)   (4,275,000)
                                              ---------  -----------   -----------  ------------

Balance at December 31, 1999                     1,000    6,220,000       257,250     6,478,250

Net income                                          --           --     3,565,942     3,565,942
Capital contribution from parent                    --    3,885,000            --     3,885,000
Return of capital to parent                         --   (1,251,071)           --    (1,251,071)
Dividends paid - $3,850 per share                   --      (26,808)   (3,823,192)   (3,850,000)
                                              ---------  -----------   -----------  ------------

Balance at December 31, 2000                $    1,000    8,827,121            --     8,828,121
                                              =========  ===========   ===========  ============

</TABLE>

See accompanying notes to financial statements.

                                       F-4
<PAGE>

                        NELNET STUDENT LOAN CORPORATION-1
                   (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

<TABLE>
<CAPTION>
                            Statements of Cash Flows

                  Years ended December 31, 2000, 1999 and 1998




                                                          2000          1999          1998
                                                       ------------ -------------- ------------
<S>                                                  <C>                <C>            <C>
Net income                                           $   3,565,942      3,480,770      294,253
Adjustments to reconcile net income to net cash
   from operating activities:
     Amortization of loan premiums and
     debt issuance costs                                 6,662,987      6,027,098    2,567,623
     Deferred income tax benefit                            (5,723)      (171,112)    (153,132)
     Provision for loan losses                             590,000      1,150,000      600,000
     Increase in accrued interest receivable            (1,490,836)   (19,051,958)  (3,375,516)
     Decrease (increase) in other assets                        --         46,374      (35,374)
     Increase in accrued interest payable                   33,819      1,075,918    2,118,272
     (Decrease) increase in other liabilities              (51,217)       594,120      150,126
     Increase (decrease) in income taxes payable to parent  41,334        (53,761)    (290,478)
                                                       ------------ -------------- ------------

          Net cash provided by (used in)
          operating activities                           9,346,306     (6,902,551)   1,875,774
                                                       ------------ -------------- ------------

Cash flows from investing activities:
   Purchases of student loans, including premiums     (174,371,621)(1,081,832,346)(178,538,396)
   Proceeds from sales of student loans                101,408,534     16,850,114    2,056,884
   Net proceeds from student loan principal payments
     and loan consolidations                           142,563,782    206,065,160   59,138,505
   (Increase) decrease in restricted
    cash - held by trustee                              (1,543,389)   614,925,722 (625,272,703)
                                                       ------------ -------------- ------------

          Net cash provided by (used in)
          investing activities                          68,057,306   (243,991,350)(742,615,710)
                                                       ------------ -------------- ------------

Cash flows from financing activities:
   Proceeds from issuance of notes payable                      --    278,700,000  745,000,000
   Payment on notes payable                            (76,200,000)   (27,900,000)          --
   Payment for debt issuance costs                              --     (1,809,372)  (4,260,064)
   Return of capital to parent                          (1,251,071)            --           --
   Capital contribution from parent                      3,885,000      6,220,000           --
   Dividends paid                                       (3,850,000)    (4,275,000)          --
                                                       ------------ -------------- ------------

          Net cash (used in) provided by
          financing activities                         (77,416,071)   250,935,628  740,739,936
                                                       ------------ -------------- ------------

          Net (decrease) increase in cash and
          cash equivalents                                 (12,459)        41,727           --

Cash and cash equivalents, beginning of year                41,727             --           --
                                                       ------------ -------------- ------------

Cash and cash equivalents, end of year               $      29,268         41,727           --
                                                       ============ ============== ============

Supplemental disclosures of cash flow information:
   Interest paid                                     $  96,072,635     77,745,207   31,958,514
                                                       ============ ============== ============

   Income taxes paid to parent                       $   1,877,722      2,300,000      611,748
                                                       ============ ============== ============


See accompanying notes to financial statements.
</TABLE>

                                       F-5
<PAGE>


                        NELNET STUDENT LOAN CORPORATION-1
                   (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

                          Notes to Financial Statements

                        December 31, 2000, 1999 and 1998


 (1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

       DESCRIPTION OF BUSINESS

       NELNET Student Loan Corporation-1 (the Company), a wholly-owned
       subsidiary of NelNet, Inc. (formerly known as National Education Loan
       Network, Inc.) (the Parent) 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). 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 student loans
       is held by an eligible lender trustee under the Act for the benefit of
       the Company. The financed eligible student 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. As the Company maintains control of the student loans
       and related notes payable, the Company accounts for the transactions as
       secured borrowings in the accompanying balance sheets when the loans are
       transferred into the trusts.

       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 statements 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. Loans are charged against the allowance
       when management believes that the collectibility of the 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.

                                                                     (Continued)
                                       F-6
<PAGE>
                        NELNET STUDENT LOAN CORPORATION-1
                   (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

                          Notes to Financial Statements

                        December 31, 2000, 1999 and 1998


       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 sixty 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 5 to 15 years.

       INCOME TAXES

       The Company files a consolidated federal tax return with UNIPAC Service
       Corporation (UNIPAC), the legal parent of NelNet, Inc. The financial
       statements reflect income taxes computed as if the Company filed a
       separate tax return. Current income tax payments are made by the Company
       to 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.

       RECLASSIFICATIONS

       Certain 1999 and 1998 amounts have been reclassified to conform with the
       2000 financial statement presentation.

                                                                     (Continued)

                                       F-7
<PAGE>
                        NELNET STUDENT LOAN CORPORATION-1
                   (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

                          Notes to Financial Statements

                        December 31, 2000, 1999 and 1998


 (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; 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; the interest fund which is used for the payment of
       debt service requirements; and the senior note redemption fund which is
       used to redeem senior notes.

 (3)   STUDENT LOANS RECEIVABLE AND CONCENTRATION OF CREDIT RISK

       Guaranteed loans may be made under this 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 twenty 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
       6% 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 91% of the
       student loans at December 31, 2000) are insured up to 98%.

       The Company has provided for an allowance for loan losses related to
       those 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 years ended December 31, 2000,
       1999 and 1998 is shown on the following page.

                                                                     (Continued)

                                       F-8
<PAGE>
                        NELNET STUDENT LOAN CORPORATION-1
                   (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

                          Notes to Financial Statements

                        December 31, 2000, 1999 and 1998



                                            2000         1999        1998
                                          ----------  -----------  ----------

    Beginning balance                    $ 1,336,294      416,801           -
    Provision for loan losses                590,000    1,150,000     600,000
    Loans charged off, net of recoveries    (717,365)    (230,507)   (183,199)
                                          ----------  -----------  ----------

    Ending balance                       $ 1,208,929    1,336,294     416,801
                                          ==========  ===========  ==========

 (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 outstanding notes payable at December 31, 2000
       and 1999 by issue.
<TABLE>
<CAPTION>

                                                             2000                           1999
                                                  --------------------------    --------------------------
                                                                  INTEREST                      INTEREST
                                        FINAL       CARRYING        RATE           CARRYING       RATE
 2000                                 MATURITY       AMOUNT        RANGE            AMOUNT        RANGE
-----------------------------------   ----------  -------------- -----------    --------------- ----------
<S>                                     <C>              <C>        <C>               <C>        <C>
1996A Senior Auction Rate Notes,
   Class A-1 and A-2                   7/1/2014 $    96,600,000  6.85 - 6.90% $     96,600,000  6.60 - 6.9%
1996B Senior Auction Rate Notes,
   Class A-3 and A-4                   7/1/2014     128,000,000     6.95           128,000,000    7.00
1996C Senior Treasury Rate Notes,
   Class A-5                           7/1/2005     120,900,000     6.42           197,100,000    6.02
1996C Senior Auction Rate Notes,
   Class A-6                           7/1/2014      75,500,000     6.95            75,500,000    7.00
1996C Subordinate LIBOR Rate Notes,
   Class B-3                           7/1/2025      15,600,000     7.30            15,600,000    6.96
1997A Subordinate LIBOR Rate Notes,
   Class B-4                           7/1/1930      30,800,000     7.27            30,800,000    6.93
1998A Senior Fixed Rate Notes,
   Class A-7                           8/1/2005     125,000,000     5.48           125,000,000    5.48
1998A Senior Fixed Rate Notes,
   Class A-8                           9/1/2005     125,000,000     5.50           125,000,000    5.50
1998A Senior Fixed Rate Notes,
   Class A-9                          12/1/2005     125,000,000     5.73           125,000,000    5.73
1998A Senior Auction Rate Notes,
   Class A-10                         10/1/1932     100,000,000     6.95           100,000,000    7.10
1998A Senior Auction Rate Notes,
   Class A-11                         11/1/1932     100,000,000     6.84           100,000,000    6.30
1998A Senior Auction Rate Notes,
   Class A-12                         12/1/1932     100,000,000     6.85           100,000,000    6.55
1998B Subordinate Auction Rate Notes,
   Class B-5                          12/1/1932      70,000,000     6.98            70,000,000    7.35
1999A Senior Auction Rate Notes,
   Class A-13, A-14, A-15 and A-16    12/1/1932     278,700,000  6.84 - 7.02       278,700,000  5.97 - 6.85
                                                  --------------                ---------------

                                                $ 1,491,100,000               $  1,567,300,000
                                                  ==============                ===============
</TABLE>


                                                                     (Continued)

                                       F-9
<PAGE>
                        NELNET STUDENT LOAN CORPORATION-1
                   (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

                          Notes to Financial Statements

                        December 31, 2000, 1999 and 1998


       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 redeemed $76,200,000 and $27,900,000 in
       2000 and 1999, respectively of the Series 1996C Senior Treasury Rate
       Notes, Class A-5.

       In July 1999, the Company issued $278,700,000 of Taxable Student Loan
       Asset-Backed Notes, Series 1999A, due December 1, 2032, at varying rates.
       The proceeds were used to purchase eligible student loans.

       In December 1998, the Company issued $745,000,000 of Taxable Student Loan
       Asset - Backed Notes, Series 1998A, due in maturities from August 1, 2005
       to December 1, 2032, at varying rates. The proceeds were deposited into
       the Loan Account Fund 98A and eligible student loans were purchased in
       January 1999.

       In March 1997, the Company issued $30.8 million of Taxable Student Loan
       Asset-Backed Notes, Series 1997A, due July 1, 2030. The proceeds were
       deposited in an escrow fund to provide for the defeasance of the $11.1
       million of the Series 1996A Class B Subordinate Notes and $14.2 million
       of the Series 1996B Class B-2 Subordinate Notes, respectively, in May
       1999.

       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, 2000 and 1999.

(5)    INCOME TAXES

       Components of income tax expense (benefit) in 2000, 1999 and 1998 are
       shown below.

                              2000         1999        1998
                          -----------  ----------- -----------
          Current:
             Federal     $  1,843,960    2,051,990     300,265
             State            167,605      194,250      22,005
                          -----------  ----------- -----------

                            2,011,565    2,246,240     322,270
                          -----------  ----------- -----------

         Deferred:
            Federal           (5,272)    (157,603)   (142,712)
            State               (451)     (13,509)    (10,420)
                          -----------  ----------- -----------

                              (5,723)    (171,112)   (153,132)
                          -----------  ----------- -----------

                        $  2,005,842    2,075,128     169,138
                          ===========  =========== ===========

       The actual income tax expense differs from the "expected" income tax
       expense, computed by applying the federal statutory corporate tax rates
       to income before income tax expense for 2000, 1999 and 1998, as shown on
       the following page.

                                                                     (Continued)
                                      F-10
<PAGE>
                        NELNET STUDENT LOAN CORPORATION-1
                   (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

                          Notes to Financial Statements

                        December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>

                                                        2000         1999        1998
                                                     ----------  -----------  ----------

<S>                                                 <C>            <C>           <C>
Computed "expected" income tax expense              $ 1,894,407    1,889,005     157,553
Increase in income tax expense resulting from:
   State taxes, net of federal income tax benefit       110,322      119,289       7,646
   Other                                                  1,113       66,834       3,939
                                                      ----------  -----------  ----------

           Actual income tax expense                $ 2,005,842    2,075,128     169,138
                                                      ==========  ===========  ==========
</TABLE>

       The Company's deferred tax assets at December 31, 2000 and 1999 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 and capital gains 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 approximates carrying value due to
       the nature of the financing arrangement. The terms of the arrangement
       specify that the outstanding debt is callable at par at specified
       interest payment dates.

       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.

                                                                     (Continued)

                                      F-11
<PAGE>
                        NELNET STUDENT LOAN CORPORATION-1
                   (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

                          Notes to Financial Statements

                        December 31, 2000, 1999 and 1998


 (7)   GUARANTEE AGENCIES

       As of December 31, 2000, Iowa College Student Aid Commission, Nebraska
       Student Loan Program, Inc., Florida Department of Education Office of
       Student Financial Assistance, and the United Student Aid Funds, Inc. were
       the primary guarantors, guaranteeing approximately 88% of the total
       student loans beneficially owned by the Company. As of December 31, 1999,
       Nebraska Student Loan Program, Inc., Florida Department of Education
       Office of Student Financial Assistance, and the United Student Aid Fund
       were the primary guarantors, guaranteeing approximately 79% 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, 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)   RECENT STUDENT LOAN LEGISLATION

       The Company's student loan program is subject to the provisions of the
       Act and as such, may be subject to legislative changes. Legislative
       changes to the Act affecting competition, loan asset characteristics,
       debt structure provisions and regulatory compliance may from time to
       time affect the operations of the Company. The Act expired September
       1998 and was reauthorized with certain amendments effective October 1,
       1998. These amendments included certain provisions for changes in the
       existing Federal Family Loan Program which included changes to interest
       rates, special allowance payments and guarantee fees that could have a
       material effect on the financial statements.

 (9)   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 contracted all loan
       servicing through UB&T through June 30, 1999. UNIPAC was contracted as a
       sub-servicer by UB&T. Fees paid to UB&T were calculated using an annual
       asset-based charge ranging from .60% to 1.25% of the student loan
       principal balance, calculated monthly. On June 30, 1999, UB&T assigned
       this servicing agreement to the Parent who contracts UNIPAC and
       InTuition, Inc., a wholly-owned subsidiary of the Parent, as
       sub-servicers. The fees amounted to approximately $13.2 million, $12.7
       million and $5.5 million in 2000, 1999 and 1998, respectively. At
       December 31, 2000 and 1999, approximately $1,063,000 and $506,000,
       respectively, was payable to the Parent for loan servicing and is
       included in other liabilities on the accompanying balance sheets. In
       1998, the Company also paid approximately $385,000 to UB&T for services
       provided in connection with the purchase of eligible student loans.

                                                                     (Continued)

                                      F-12
<PAGE>
                        NELNET STUDENT LOAN CORPORATION-1
                   (A WHOLLY-OWNED SUBSIDIARY OF NELNET, INC.)

                          Notes to Financial Statements

                        December 31, 2000, 1999 and 1998

       During 2000 and 1999, the Company purchased student loans of
       approximately $27 million and $279 million from NEBHELP, Inc., a
       wholly-owned subsidiary of the Parent. Premiums paid on these purchased
       loans totaled approximately $507,000 and $6 million in 2000 and 1999,
       respectively. During 1999, the Company purchased student loans of
       approximately $143 million from NHELP-I, Inc., a wholly-owned subsidiary
       of the Parent. Premiums paid on these purchased loans totaled
       approximately $3 million in 1999. During 2000 and 1999, the Company also
       purchased student loans of approximately $5.3 million and $481 million,
       respectively, from InTuition, Inc., a wholly-owned subsidiary of the
       Parent. Premiums paid on these purchased loans totaled approximately
       $134,000 and $12.4 million, respectively. These purchases were made on
       terms similar to those made with unrelated entities. During 2000, the
       Company sold approximately $101 million of student loans to NELNET
       Student Loan Corporation-2, a wholly-owned subsidiary of the Parent.

       During 2000 and 1999, the Company purchased student loans of
       approximately $141 million and $11 million, respectively, from UB&T.
       Premiums paid on these loans totaled approximately $1.3 million and
       $201,000, respectively. During 1999, the Company sold approximately $5.6
       million of student loans to UB&T.

       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 income, amounted to approximately $2.6 million, $3.3 million and
       $953,000 in 2000, 1999 and 1998, respectively.



                                      F-13
<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-1


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




                                     By:/s/ Ronald W. Page
                                       ----------------------------------------
                                       Ronald W. Page, Vice President (Principal
                                       Financial and Accounting Officer)


                                      Date:  March 30, 2001

               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      March 30, 2001
      ------------------------------   (Principal Executive
      Michael S. Dunlap                Officer)


By:   /s/ Stephen F. Butterfield       President and Director     March 30, 2001
      ------------------------------
      Stephen F. Butterfield

By:   /s/ Ronald W. Page               Vice-President,            March 30, 2001
      ------------------------------   Secretary,
      Ronald W. Page                   Treasurer and Director
                                       (Principal Financial and
                                       Accounting Officer)

By:   /s/ Ross Wilcox                  Director                   March 30, 2001
      ------------------------------
      Ross Wilcox

By:   /s/ Dr. Paul Hoff                Director                   March 30, 2001
      ------------------------------
      Dr. Paul Hoff


                                     20
<PAGE>