The Department of Education (ED) yesterday filed a notice that it plans to cancel the contract it awarded to Performant Financial Corp. and Windham Professionals to collect on unpaid student loans.
While the news was not altogether a surprise, it does add a new chapter into a process that has been ongoing for more nearly a decade as the department seeks help in collecting on unpaid student loans that are guaranteed by the federal government.
A copy of the filing from the Education Department can be accessed by clicking here.
In its filing with the Court of Federal Claims, the Education Dept. said it would begin a new program that will “significantly enhance its engagement at the 90-day delinquency mark in an effort to help borrowers more effectively manage their Federal student loan debt.”
The current private collection agencies (PCA) under contract with ED have sufficient capacity to absorb the number of accounts expected to need debt collection services while the process for transitioning to the new approach is developed and implemented. Therefore, additional PCA contract work is not currently needed.
The two firms were selected by the Education Dept. in January following a lengthy procurement process. When Performant and Windham were selected, the Education Dept. notified seven other firms that contracts with them were being terminated, which kicked off a legal battle.
Published reports from those who have been following the process very closely have indicated that the Education Dept. will likely issue another request seeking bids from PCAs in the near future.
