Department of Education awards $121.5M student loan servicing contract to EDFINANCIAL SERVICES LLC
Contract Overview
Contract Amount: $121,480,819 ($121.5M)
Contractor: Edfinancial Services LLC
Awarding Agency: Department of Education
Start Date: 2026-04-01
End Date: 2027-03-30
Contract Duration: 363 days
Daily Burn Rate: $334.7K/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: KNOXVILLE, KNOX County, TENNESSEE, 37922
Plain-Language Summary
Department of Education obligated $121.5 million to EDFINANCIAL SERVICES 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. Contract awarded to EDFINANCIAL SERVICES LLC for student loan servicing. 2. Significant value of $121.5 million over a 363-day period. 3. Competition method was 'Full and Open', suggesting a competitive bidding process. 4. The sector is 'Other Activities Related to Credit Intermediation', a niche area.
Value Assessment
Rating: fair
The contract value of $121.5 million for a 363-day period for student loan servicing appears high. Benchmarking against similar O&M task orders for large-scale financial services is needed to assess if the pricing is competitive.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under 'Full and Open Competition', indicating that multiple vendors had the opportunity to bid. This method generally promotes price discovery and competitive pricing.
Taxpayer Impact: Taxpayer funds are being used for student loan servicing, a necessary function. The effectiveness of the competition in securing a fair price will determine the ultimate taxpayer impact.
Public Impact
Impacts millions of federal student loan borrowers who rely on these services. Ensures the continued operation of essential student loan repayment and management systems. Potential for improved borrower experience through efficient and effective servicing.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- High contract value may warrant closer scrutiny for cost-effectiveness.
- Fixed Price with Economic Price Adjustment (FPEPA) can introduce cost volatility.
Positive Signals
- Awarded under full and open competition.
- Clear contract duration and delivery order structure.
Sector Analysis
This contract falls under 'Other Activities Related to Credit Intermediation', which includes services like loan servicing. Spending in this area is crucial for the functioning of federal credit programs, but specific benchmarks for student loan servicing contracts are not readily available.
Small Business Impact
The data indicates that EDFINANCIAL SERVICES LLC is the awardee, and there is no explicit mention of small business participation or subcontracting. Further analysis would be needed to determine if small businesses were involved in this contract.
Oversight & Accountability
The Department of Education is responsible for overseeing this contract. The use of a delivery order under a larger contract structure suggests existing oversight mechanisms are in place, but the effectiveness of ongoing monitoring is key.
Related Government Programs
- Other Activities Related to Credit Intermediation
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- High contract value.
- Economic Price Adjustment clause introduces cost uncertainty.
- Lack of explicit small business participation noted.
- Potential for cost overruns if not managed effectively.
Tags
other-activities-related-to-credit-inter, department-of-education, tn, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $121.5 million to EDFINANCIAL SERVICES 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 EDFINANCIAL SERVICES LLC.
Which agency awarded this contract?
Awarding agency: Department of Education (Department of Education).
What is the total obligated amount?
The obligated amount is $121.5 million.
What is the period of performance?
Start: 2026-04-01. End: 2027-03-30.
What is the historical cost performance of EDFINANCIAL SERVICES LLC on similar student loan servicing contracts?
Historical cost performance data for EDFINANCIAL SERVICES LLC on similar contracts is crucial for evaluating the value of this $121.5 million award. Analyzing past contract spending, any cost overruns, and the efficiency metrics achieved would provide a baseline for assessing current pricing. Without this historical context, it's difficult to definitively determine if this award represents a good value for taxpayers.
What are the specific economic price adjustment clauses in this contract, and what is their potential impact on the final cost?
The contract type is 'Fixed Price with Economic Price Adjustment' (FPEPA). The specific clauses detailing which economic factors (e.g., inflation, labor costs) can trigger price adjustments and the methodology for calculating these adjustments are critical. These clauses introduce a risk of cost increases beyond the initial fixed price, potentially impacting the total taxpayer expenditure if not carefully managed and monitored.
How does the performance of EDFINANCIAL SERVICES LLC compare to other student loan servicers in terms of borrower satisfaction and operational efficiency?
Assessing the effectiveness of this contract requires comparing EDFINANCIAL SERVICES LLC's performance against industry benchmarks and competitors. Key metrics would include borrower satisfaction rates, default management success, call center efficiency, and the accuracy of loan data. A strong performance record in these areas would indicate that the $121.5 million investment is likely to yield positive outcomes for borrowers and the government.
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: 298 N SEVEN OAKS DR, KNOXVILLE, TN, 37922
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: $276,072,875
Exercised Options: $121,480,819
Current Obligation: $121,480,819
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: NO
Parent Contract
Parent Award PIID: 91003123D0003
IDV Type: IDC
Timeline
Start Date: 2026-04-01
Current End Date: 2027-03-30
Potential End Date: 2027-12-31 00:00:00
Last Modified: 2026-04-08
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