Department of Education awards $137.7M contract for student financial aid servicing to Nelnet
Contract Overview
Contract Amount: $137,745,250 ($137.7M)
Contractor: Nelnet Servicing LLC
Awarding Agency: Department of Education
Start Date: 2017-09-01
End Date: 2018-08-31
Contract Duration: 364 days
Daily Burn Rate: $378.4K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT
Sector: Other
Official Description: IGF::CT::IGF CRITICAL FUNCTION BASE AWARD: SERVICING OF TITLE IV STUDENT FINANCIAL AID, IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L. 111-152, 124 STAT. 1029) FOR THE PERIOD OF 6/17/2009 TO 6/16/2019. TASK ORDER: SERVICING OF TITLE IV STUDENT FINANCIAL AID IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L.111-152, 124 STAT. 1029) FOR THE PERIOD OF 9/01/2017 TO 8/31/2018.
Place of Performance
Location: LINCOLN, LANCASTER County, NEBRASKA, 68508
State: Nebraska Government Spending
Plain-Language Summary
Department of Education obligated $137.7 million to NELNET SERVICING LLC for work described as: IGF::CT::IGF CRITICAL FUNCTION BASE AWARD: SERVICING OF TITLE IV STUDENT FINANCIAL AID, IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L. 111-152, 124 STAT. 1029) FOR THE PERIOD OF 6/17/2009 TO 6/16/2019. TASK ORDER: SERVICING O… Key points: 1. The contract focuses on servicing Title IV student financial aid, a critical function for federal student loan programs. 2. Nelnet Servicing LLC is the sole awardee for this specific task order. 3. The contract was awarded under full and open competition, suggesting a robust price discovery process. 4. The sector is primarily financial services, supporting educational initiatives.
Value Assessment
Rating: good
The contract value of $137.7M over one year appears reasonable for the scope of servicing federal student financial aid. Benchmarking against similar large-scale student loan servicing contracts would provide further context on pricing efficiency.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded through full and open competition, indicating that multiple vendors had the opportunity to bid. This competitive process likely contributed to achieving a fair market price for the services rendered.
Taxpayer Impact: Taxpayer funds are utilized for the administration and servicing of federal student financial aid programs, ensuring the smooth operation of student loan repayment and management.
Public Impact
Ensures continued access to student financial aid services for millions of students. Supports the operational integrity of federal student loan programs. Facilitates student loan repayment and borrower assistance. Contributes to the overall efficiency of the Department of Education's student aid mission.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for vendor lock-in if contract renewals are not competitively bid.
- Reliance on a single vendor for critical financial aid servicing.
Positive Signals
- Awarded under full and open competition.
- Supports a vital government function.
- Clear period of performance.
Sector Analysis
This contract falls within the financial services sector, specifically focusing on credit intermediation and loan servicing. Spending benchmarks for similar large-scale federal loan servicing contracts are typically in the hundreds of millions of dollars annually, depending on the portfolio size and complexity.
Small Business Impact
The data indicates that this contract was not awarded to small businesses (ss: false, sb: false). The scale and nature of federal student loan servicing often favor large, established entities with specialized infrastructure and experience.
Oversight & Accountability
The Department of Education is responsible for overseeing this contract. Robust oversight is crucial to ensure compliance, performance, and the efficient use of taxpayer funds in managing federal student financial aid.
Related Government Programs
- Other Activities Related to Credit Intermediation
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Potential for single-vendor dependency.
- Complexity of managing large student loan portfolios.
- Need for continuous monitoring of borrower needs and economic conditions.
- Ensuring data security and privacy for sensitive financial information.
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 $137.7 million to NELNET SERVICING LLC. IGF::CT::IGF CRITICAL FUNCTION BASE AWARD: SERVICING OF TITLE IV STUDENT FINANCIAL AID, IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L. 111-152, 124 STAT. 1029) FOR THE PERIOD OF 6/17/2009 TO 6/16/2019. TASK ORDER: SERVICING OF TITLE IV STUDENT FINANCIAL AID IN ACCORDANCE WITH SECTION 2212 OF THE HEALTH CARE AND EDUCATION RECONCILIATION ACT OF 2010 (PUB.L.111-152, 124 STAT. 1029) FOR THE PERIOD OF 9/01/2017 TO 8/31/2018.
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 $137.7 million.
What is the period of performance?
Start: 2017-09-01. End: 2018-08-31.
What is the historical performance of Nelnet Servicing LLC in managing federal student financial aid programs?
Nelnet has a long history of servicing federal student loans, often acting as a primary loan servicer for the Department of Education. Their performance typically involves managing loan repayment, providing borrower assistance, and processing financial aid disbursements. While generally considered experienced, specific performance metrics and any past issues or commendations related to their servicing operations would require a deeper dive into contract performance reports and oversight reviews.
How does the pricing of this contract compare to other federal student loan servicing contracts awarded through full and open competition?
Direct comparison of pricing requires access to detailed cost breakdowns and service level agreements of other similar contracts. However, given the $137.7 million value for a one-year term, it suggests a significant volume of loans being serviced. The 'full and open competition' designation implies a competitive bidding process, which should theoretically drive pricing towards market rates. Further analysis would involve comparing cost-per-loan-serviced or cost-per-dollar-managed metrics.
What are the key performance indicators (KPIs) used to measure the effectiveness of this student financial aid servicing contract?
Key performance indicators for student financial aid servicing contracts typically include borrower satisfaction rates, on-time repayment rates, delinquency and default reduction metrics, call center response times, accuracy of loan data, and compliance with federal regulations. The effectiveness of this contract would be measured against established targets for these KPIs, ensuring efficient and compliant management of federal student loan portfolios.
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: 4
Pricing Type: FIXED PRICE WITH ECONOMIC PRICE ADJUSTMENT (K)
Evaluated Preference: NONE
Contractor Details
Parent Company: Nelnet, Inc. (UEI: 134960447)
Address: 121 S 13TH ST STE 201, LINCOLN, NE, 68508
Business Categories: Category Business, Limited Liability Corporation, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $156,399,110
Exercised Options: $156,399,110
Current Obligation: $137,745,250
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: EDFSA09D0013
IDV Type: IDC
Timeline
Start Date: 2017-09-01
Current End Date: 2018-08-31
Potential End Date: 2018-08-31 00:00:00
Last Modified: 2021-08-11
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