The Department has initiated a two step process to potentially replace their existing debt management and collection system for defaulted federal loans. From the FedBizOpps website:
The RFP provided this description and some relevant data on the current Debt Management and Collections System (DMCS):
In December 2009, the Department selected these six firms to move to phase II of the solicitation process:
- ACS Federal Solutions
- CGI Federal Inc.
- Diversified Collection Services, Inc.
- Nelnet Guarantor Solutions
- Sallie Mae, Inc.
- Vangent, Inc.
Given the increases in volume of defaulted loans and the continued uncertainty regarding the FFEL program, this has the potential to become a pivotal contract in managing federal loan defaults. It would seem to indicate that either 1) FSA is not satisfied with their current system and/or 2) Recognizes the need to increase their capacity in this area. Note that the total portfolio of defaulted federal student loans recently surpassed $50 billion.