Department of Education awards $93.7M for Student Loan Servicing O&M Task Order

Contract Overview

Contract Amount: $93,658,899 ($93.7M)

Contractor: Missouri Higher Education Loan Authority

Awarding Agency: Department of Education

Start Date: 2025-10-01

End Date: 2026-03-31

Contract Duration: 181 days

Daily Burn Rate: $517.5K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT

Sector: Other

Official Description: OPERATIONS AND MAINTENANCE (O&M) TASK ORDER FOR STUDENT LOAN SERVICING IN ACCORDANCE WITH THE REQUIREMENTS OF THE USDS CONTRACT. ALL WORK AND DELIVERABLES PROVIDED BY THE USDS SERVICER MUST BE IN ACCORDANCE WITH THE REQUIREMENTS OF THE CONTRACT F

Place of Performance

Location: WASHINGTON, DISTRICT OF COLUMBIA County, DISTRICT OF COLUMBIA, 20202

State: District of Columbia Government Spending

Plain-Language Summary

Department of Education obligated $93.7 million to MISSOURI HIGHER EDUCATION LOAN AUTHORITY for work described as: OPERATIONS AND MAINTENANCE (O&M) TASK ORDER FOR STUDENT LOAN SERVICING IN ACCORDANCE WITH THE REQUIREMENTS OF THE USDS CONTRACT. ALL WORK AND DELIVERABLES PROVIDED BY THE USDS SERVICER MUST BE IN ACCORDANCE WITH THE REQUIREMENTS OF THE CONTRACT F Key points: 1. Significant contract value for student loan servicing operations. 2. Competition method is 'Full and Open', suggesting broad market participation. 3. Fixed Price with Economic Price Adjustment (FPEPA) contract type introduces potential cost escalation. 4. Sector is 'Other Activities Related to Credit Intermediation', a niche but critical area.

Value Assessment

Rating: good

The contract value of $93.7M for an 18-month period appears reasonable for student loan servicing, a complex and regulated function. Benchmarking against similar large-scale loan servicing contracts would provide further validation.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The use of 'Full and Open Competition' is a positive indicator for price discovery and potentially achieving competitive pricing. The specific details of the bidding process and the number of bidders would further clarify the effectiveness of price discovery.

Taxpayer Impact: The competitive nature of this award suggests that taxpayer funds are being utilized efficiently, with efforts made to secure the best value for essential student loan servicing.

Public Impact

Impacts millions of student loan borrowers who rely on timely and accurate servicing. Ensures the continued operation of critical federal student loan programs. Potential for service disruptions or inefficiencies if the chosen servicer underperforms. Affects the financial health and accessibility of higher education for students.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Economic price adjustment clause could lead to cost overruns.
Contract duration is relatively short (18 months), potentially leading to frequent re-competition costs.
No indication of small business participation.

Positive Signals

Awarded under Full and Open Competition.
Clear contract requirements for operations and maintenance.
Established agency (Department of Education) overseeing the contract.

Sector Analysis

This contract falls within the 'Other Activities Related to Credit Intermediation' sector, specifically focusing on the operational and maintenance aspects of federal student loan servicing. Spending in this area is crucial for the functioning of federal student aid programs and can be substantial, though benchmarks vary widely based on program scope and contract structure.

Small Business Impact

The provided data does not indicate any specific provisions or set-asides for small businesses in this contract. Further analysis would be needed to determine if small businesses had an opportunity to participate or if this contract was awarded to a large entity.

Oversight & Accountability

The Department of Education is responsible for overseeing this contract. Robust oversight mechanisms, including performance monitoring, audits, and clear communication channels, are essential to ensure the contractor meets all requirements and taxpayer funds are used appropriately.

Related Government Programs

Other Activities Related to Credit Intermediation
Department of Education Contracting
Department of Education Programs

Risk Flags

Potential for cost escalation due to Economic Price Adjustment.
Lack of small business participation noted.
Short contract duration may lead to recurring re-competition costs.
Dependence on a single entity for critical student loan operations.

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $93.7 million to MISSOURI HIGHER EDUCATION LOAN AUTHORITY. OPERATIONS AND MAINTENANCE (O&M) TASK ORDER FOR STUDENT LOAN SERVICING IN ACCORDANCE WITH THE REQUIREMENTS OF THE USDS CONTRACT. ALL WORK AND DELIVERABLES PROVIDED BY THE USDS SERVICER MUST BE IN ACCORDANCE WITH THE REQUIREMENTS OF THE CONTRACT F

Who is the contractor on this award?

The obligated recipient is MISSOURI HIGHER EDUCATION LOAN AUTHORITY.

Which agency awarded this contract?

Awarding agency: Department of Education (Department of Education).

What is the total obligated amount?

The obligated amount is $93.7 million.

What is the period of performance?

Start: 2025-10-01. End: 2026-03-31.

What is the historical performance of the Missouri Higher Education Loan Authority as a student loan servicer?

Historical performance data for the Missouri Higher Education Loan Authority as a student loan servicer is crucial for assessing the value and risk associated with this contract. Information on their track record with borrower communication, default management, data security, and compliance with federal regulations would inform whether this award represents a sound investment of taxpayer funds and ensures effective service delivery.

How will the economic price adjustment clause be managed to mitigate potential cost increases?

The management of the economic price adjustment (EPA) clause is critical to controlling costs. The Department of Education must have clear guidelines and monitoring processes in place to ensure that any price increases are justified by actual economic factors and do not lead to excessive spending. Transparency in how the EPA is calculated and applied will be key to ensuring accountability and protecting taxpayer interests.

What are the key performance indicators (KPIs) for this contract, and how will they be measured?

Defining and rigorously measuring Key Performance Indicators (KPIs) is essential for evaluating the effectiveness of this student loan servicing contract. These KPIs should cover aspects like borrower satisfaction, call center wait times, accuracy of payment processing, and compliance rates. The Department of Education's oversight must include a robust system for tracking these KPIs to ensure the contractor is meeting its obligations and delivering value.

Industry Classification

NAICS: Finance and Insurance › Activities Related to Credit Intermediation › Other Activities Related to Credit Intermediation

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › MANAGEMENT SUPPORT SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: SUBJECT TO MULTIPLE AWARD FAIR OPPORTUNITY

Offers Received: 8

Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)

Evaluated Preference: NONE

Contractor Details

Address: 633 SPIRIT DR, CHESTERFIELD, MO, 63005

Business Categories: Category Business, Corporate Entity Tax Exempt, Nonprofit Organization, Not Designated a Small Business, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $93,658,899

Exercised Options: $93,658,899

Current Obligation: $93,658,899

Actual Outlays: $70,933,691

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 91003123D0004

IDV Type: IDC

Timeline