Department of Education awards $164.8M student loan servicing contract to Maximus Education LLC under full and open competition

Contract Overview

Contract Amount: $164,848,722 ($164.8M)

Contractor: Maximus Education LLC

Awarding Agency: Department of Education

Start Date: 2026-04-01

End Date: 2033-04-24

Contract Duration: 2,580 days

Daily Burn Rate: $63.9K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 8

Pricing Type: FIRM FIXED PRICE

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 $164.8 million to MAXIMUS EDUCATION 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. ALL WORK AND DELIVERABLES PROVIDED BY THE USDS SERVICER MUST BE IN ACCORDANCE WITH THE REQUIREMENTS OF THE CONTRACT F Key points: 1. The contract focuses on essential student loan servicing operations and maintenance. 2. Maximus Education LLC, a significant player in government contracting, secured this award. 3. The award was made under a full and open competition, suggesting a competitive bidding process. 4. The contract duration extends over 7 years, indicating a long-term commitment to these services.

Value Assessment

Rating: good

The contract value of $164.8M over approximately 7 years suggests a substantial but potentially reasonable annual cost for comprehensive student loan servicing. Benchmarking against similar large-scale government IT and administrative service contracts would be necessary for a precise assessment.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded through full and open competition, which typically allows for the widest possible range of bidders and fosters price discovery. This method is expected to yield competitive pricing for the services required.

Taxpayer Impact: The competitive nature of the award is intended to ensure taxpayer funds are used efficiently for essential student loan servicing operations.

Public Impact

Ensures continued support for federal student loan borrowers. Maintains the operational integrity of the student loan program. Provides stability for borrowers by ensuring consistent loan servicing. Supports the Department of Education's mission in managing federal student aid.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Contract duration is long (over 7 years), potentially locking in costs.
Reliance on a single vendor for critical student loan operations.
Potential for scope creep or unaddressed requirements over the contract term.

Positive Signals

Awarded through full and open competition, indicating market responsiveness.
Firm Fixed Price contract type helps control costs.
Long-term contract provides service continuity.

Sector Analysis

This contract falls under 'Other Activities Related to Credit Intermediation,' a broad category that includes services supporting financial operations. Spending in this sector is often driven by regulatory requirements and the need for efficient management of financial programs.

Small Business Impact

The data does not indicate any specific set-asides for small businesses. The contract was awarded under full and open competition, suggesting that large businesses were likely the primary participants.

Oversight & Accountability

The Department of Education is responsible for overseeing this contract. Robust oversight will be crucial to ensure Maximus Education LLC meets all performance requirements and delivers services effectively throughout the contract period.

Related Government Programs

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

Risk Flags

Long contract duration (over 7 years).
Potential for vendor lock-in.
Reliance on a single entity for critical borrower services.
Need for vigilant performance monitoring to ensure quality.

Frequently Asked Questions

What is this federal contract paying for?

Department of Education awarded $164.8 million to MAXIMUS EDUCATION LLC. 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 MAXIMUS EDUCATION LLC.

Which agency awarded this contract?

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

What is the total obligated amount?

The obligated amount is $164.8 million.

What is the period of performance?

Start: 2026-04-01. End: 2033-04-24.

What specific performance metrics will be used to evaluate Maximus Education LLC's success in student loan servicing?

Performance metrics likely include borrower satisfaction rates, accuracy of payment processing, timeliness of responses to inquiries, compliance with federal regulations, and data security. The contract's Performance Work Statement (PWS) would detail these specific Key Performance Indicators (KPIs) and their associated acceptable quality levels, forming the basis for performance evaluations and potential award fee adjustments.

What are the potential risks associated with a long-term, firm-fixed-price contract for student loan servicing?

A significant risk is that the firm-fixed-price may not adequately account for unforeseen market changes or increased operational costs over the 7+ year term, potentially leading to reduced service quality if the vendor struggles with profitability. Conversely, if costs decrease significantly, the government might be overpaying. Additionally, long-term contracts can reduce flexibility to adapt to evolving student loan program policies or technological advancements.

How does this contract contribute to the overall effectiveness of the federal student loan program?

This contract is critical for the effective functioning of the federal student loan program by ensuring that borrowers receive consistent and compliant servicing for their loans. Efficient and accurate servicing directly impacts borrower repayment experiences, delinquency rates, and the government's ability to manage its loan portfolio, ultimately supporting the program's financial health and accessibility goals.

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: FIRM FIXED PRICE (J)

Evaluated Preference: NONE

Contractor Details

Address: 1891 METRO CENTER DR, RESTON, VA, 20190

Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Partnership or Limited Liability Partnership, Special Designations, U.S.-Owned Business

Financial Breakdown

Contract Ceiling: $376,408,431

Exercised Options: $164,848,722

Current Obligation: $164,848,722

Contract Characteristics

Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED

Cost or Pricing Data: NO

Parent Contract

Parent Award PIID: 91003123D0001

IDV Type: IDC

Timeline