Department of Education awards $160M O&M contract for student loan servicing to Nelnet Servicing LLC
Contract Overview
Contract Amount: $159,841,042 ($159.8M)
Contractor: Nelnet Servicing LLC
Awarding Agency: Department of Education
Start Date: 2025-10-01
End Date: 2026-03-31
Contract Duration: 181 days
Daily Burn Rate: $883.1K/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.
Place of Performance
Location: LINCOLN, LANCASTER County, NEBRASKA, 68508
State: Nebraska Government Spending
Plain-Language Summary
Department of Education obligated $159.8 million to NELNET SERVICING LLC for work described as: OPERATIONS AND MAINTENANCE (O&M) TASK ORDER FOR STUDENT LOAN SERVICING IN ACCORDANCE WITH THE REQUIREMENTS OF THE USDS CONTRACT. Key points: 1. Contract awarded to Nelnet Servicing LLC for student loan servicing operations. 2. Significant contract value of $159.8 million over 18 months. 3. Full and open competition was utilized for this award. 4. The contract falls under 'Other Activities Related to Credit Intermediation' NAICS code.
Value Assessment
Rating: good
The contract's fixed-price with economic price adjustment structure aims to manage costs while accounting for potential inflation. Benchmarking against similar student loan servicing contracts would provide further insight into its value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The use of full and open competition suggests a robust price discovery process. This method allows multiple qualified vendors to bid, potentially leading to more competitive pricing.
Taxpayer Impact: Taxpayer funds are being used for essential student loan servicing operations, with competition aiming to ensure efficient use of these resources.
Public Impact
Ensures continued servicing of federal student loans, impacting millions of borrowers. Maintains operational continuity for critical financial aid infrastructure. Supports the Department of Education's mission in managing student debt.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for economic price adjustments to increase final cost.
- Reliance on a single vendor for a critical function.
Positive Signals
- Awarded through full and open competition.
- Clear contract duration and defined scope of work.
Sector Analysis
This contract falls under the 'Other Activities Related to Credit Intermediation' sector, which is crucial for the financial services industry. Spending in this area is generally stable, driven by government mandates and economic conditions.
Small Business Impact
The data indicates that small businesses were not directly awarded this contract, as it was awarded to Nelnet Servicing LLC. Further analysis would be needed to determine if small businesses are involved as subcontractors.
Oversight & Accountability
The Department of Education is responsible for overseeing this contract. Robust oversight is necessary to ensure performance standards are met and funds are used appropriately.
Related Government Programs
- Other Activities Related to Credit Intermediation
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Potential cost overruns due to economic price adjustment.
- Dependence on a single contractor for a critical function.
- Need for robust oversight to ensure performance.
- Past performance of the contractor may present risks.
Tags
other-activities-related-to-credit-inter, department-of-education, ne, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $159.8 million to NELNET SERVICING LLC. OPERATIONS AND MAINTENANCE (O&M) TASK ORDER FOR STUDENT LOAN SERVICING IN ACCORDANCE WITH THE REQUIREMENTS OF THE USDS CONTRACT.
Who is the contractor on this award?
The obligated recipient is NELNET SERVICING LLC.
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $159.8 million.
What is the period of performance?
Start: 2025-10-01. End: 2026-03-31.
What is the historical performance of Nelnet Servicing LLC in managing federal student loan portfolios?
Nelnet Servicing LLC has a long history of servicing federal student loans, managing billions of dollars in debt for millions of borrowers. Their performance has been subject to various reviews and audits over the years, with outcomes varying. Understanding their track record, including any past issues with borrower communication or operational efficiency, is crucial for assessing the value and risk associated with this new contract.
How will the economic price adjustment clause impact the total cost of the contract over its duration?
The economic price adjustment (EPA) clause allows for modifications to the contract price based on specified economic factors, such as inflation indices. While intended to protect the contractor from unforeseen cost increases, it introduces uncertainty regarding the final expenditure. The actual impact will depend on the specific indices used, the frequency of adjustments, and the prevailing economic conditions during the contract period.
What mechanisms are in place to ensure the effectiveness and efficiency of student loan servicing under this contract?
Effectiveness and efficiency are typically ensured through performance standards, service level agreements (SLAs), and key performance indicators (KPIs) outlined in the contract. The Department of Education's oversight team will monitor Nelnet's adherence to these metrics, which may include call answer rates, processing times for borrower requests, and data accuracy. Regular reporting and potential penalties for non-compliance incentivize optimal performance.
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: 121 S 13TH ST, LINCOLN, NE, 68508
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $162,241,042
Exercised Options: $159,841,042
Current Obligation: $159,841,042
Actual Outlays: $119,168,833
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 91003123D0005
IDV Type: IDC
Timeline
Start Date: 2025-10-01
Current End Date: 2026-03-31
Potential End Date: 2026-03-31 00:00:00
Last Modified: 2026-03-25
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