Education Dept. Awards $32.8M to Nelnet for Student Aid Servicing
Contract Overview
Contract Amount: $32,868,404 ($32.9M)
Contractor: Nelnet Servicing LLC
Awarding Agency: Department of Education
Start Date: 2019-09-01
End Date: 2019-12-15
Contract Duration: 105 days
Daily Burn Rate: $313.0K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: MODIFICATION: THE PURPOSE OF THIS MODIFICATION IS TO PROVIDE FUNDING FOR TITLE IV AID SERVICING THROUGH APPROXIMATELY 12/15/2019.
Place of Performance
Location: LINCOLN, LANCASTER County, NEBRASKA, 68508
State: Nebraska Government Spending
Plain-Language Summary
Department of Education obligated $32.9 million to NELNET SERVICING LLC for work described as: MODIFICATION: THE PURPOSE OF THIS MODIFICATION IS TO PROVIDE FUNDING FOR TITLE IV AID SERVICING THROUGH APPROXIMATELY 12/15/2019. Key points: 1. Significant contract for student loan servicing, impacting millions of students. 2. Nelnet is a major player in the student loan servicing market. 3. Risk of service disruption or data breaches exists, though not explicitly detailed. 4. Spending falls under 'Other Activities Related to Credit Intermediation'.
Value Assessment
Rating: fair
The award amount of $32.8M for a 3.5-month period suggests a substantial per-student servicing cost. Benchmarking against similar large-scale federal student loan servicing contracts is necessary for a complete assessment.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, indicating a competitive bidding process. This method generally promotes price discovery and potentially better value for the government.
Taxpayer Impact: Taxpayer funds are used to ensure the continued operation of critical student aid servicing, preventing disruptions for students relying on these services.
Public Impact
Ensures continued access to student financial aid services for approximately 10 million students. Supports the Department of Education's mission to facilitate access to higher education. Potential for improved student loan repayment and management processes.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Short contract duration may indicate a need for future, longer-term arrangements.
- Reliance on a single vendor for critical student aid servicing.
Positive Signals
- Awarded through full and open competition.
- Addresses a critical need for student aid servicing.
Sector Analysis
This contract falls under 'Other Activities Related to Credit Intermediation,' a broad category. Federal spending in this sector is substantial, driven by student loan programs and other credit-related government initiatives.
Small Business Impact
The data does not indicate any specific set-aside for small businesses. Large prime contractors like Nelnet may utilize small business subcontractors, but this is not detailed in the provided information.
Oversight & Accountability
The Department of Education is responsible for overseeing this contract. Standard federal procurement regulations and contract management practices would apply to ensure performance and accountability.
Related Government Programs
- Other Activities Related to Credit Intermediation
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Potential for service disruption if vendor fails to perform.
- Data security and privacy risks associated with handling sensitive student financial information.
- Short contract duration may lead to future procurement uncertainties.
- Dependence on a single entity for critical student aid functions.
Tags
other-activities-related-to-credit-inter, department-of-education, ne, delivery-order, 10m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Education awarded $32.9 million to NELNET SERVICING LLC. MODIFICATION: THE PURPOSE OF THIS MODIFICATION IS TO PROVIDE FUNDING FOR TITLE IV AID SERVICING THROUGH APPROXIMATELY 12/15/2019.
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 $32.9 million.
What is the period of performance?
Start: 2019-09-01. End: 2019-12-15.
What is the historical performance of Nelnet in servicing federal student aid programs?
Nelnet has a long history of servicing federal student loans, including previous contracts with the Department of Education. While generally considered a reliable servicer, past performance reviews and any documented issues or successes would provide a more comprehensive understanding of their capabilities and potential risks.
What are the key performance indicators (KPIs) for this contract, and how is Nelnet's performance being measured?
Specific KPIs for this contract are not detailed in the provided data. Typically, student aid servicing contracts include metrics related to call center wait times, accuracy of loan information, timely processing of payments and disbursements, and student satisfaction. The Department of Education would monitor these KPIs to ensure Nelnet meets its contractual obligations.
What is the projected cost per student serviced under this contract, and how does it compare to industry benchmarks?
Without specific student volume data for the contract period, calculating a precise per-student cost is difficult. However, given the $32.8M award for approximately 3.5 months, the cost is likely significant. A detailed analysis comparing this to the average cost per student serviced by other federal or private loan servicers would be needed to assess value for money.
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: FIRM FIXED PRICE (J)
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: $73,777,351
Exercised Options: $73,777,351
Current Obligation: $32,868,404
Actual Outlays: $39,868,404
Contract Characteristics
Commercial Item: COMMERCIAL ITEM
Parent Contract
Parent Award PIID: EDFSA09D0013
IDV Type: IDC
Timeline
Start Date: 2019-09-01
Current End Date: 2019-12-15
Potential End Date: 2019-12-15 00:00:00
Last Modified: 2021-08-10
More Contracts from Nelnet Servicing LLC
- Provide Direct Loan Services Such AS Call Center and Financial Reporting - Nelnet From 12/15/2019 Through 12/14/2020 — $983.7M (Department of Education)
- 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 Must BE in Accordance With the Requirements of the Contract for the Task Order — $398.5M (Department of Education)
- 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 — $200.3M (Department of Education)
- Operations and Maintenance (O&M) Task Order for Student Loan Servicing in Accordance With the Requirements of the Usds Contract — $159.8M (Department of Education)
- 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 6/17/2014 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 09/01/2018 to 08/31/2019. Modification: the Purpose of This Modification IS to Create a NEW Task Order for Contract Ed-Fsa-09-D-0013 With the Period of Performance: 9/01/2018 - 8/31/2019, and Provide Funding for Title IV AID Servicing Through Approximately 12/31/2018 — $139.3M (Department of Education)
Other Department of Education Contracts
- Administrative Action — $2.2B (Conduent Education Solutions, LLC)
- - Tivod Supports the Origination, Disbursement, and Reporting of Title IV Federal Student AID Programs, Including - BUT NOT Limited to - Direct Loans, Pell Grants, and the Teacher Education Assistance for College and Higher Education Grants. the Title IV Solution Shall Also Provide Ongoing Support for the Discontinued Title IV Federal Student AID Programs, Including - BUT NOT Limited to - Academic Competitiveness Grants and National Science and Mathematics Access to Retain Talent Grants — $1.5B (Accenture Federal Services LLC)
- Federal Student AID Common Origination and Disbursement Services — $1.1B (Accenture LLP)
- Provide Direct Loan Services Such AS Call Center and Financial Reporting - Nelnet From 12/15/2019 Through 12/14/2020 — $983.7M (Nelnet Servicing LLC)
- Debt Management and Collections System (dmcs) Igf::ct::igf — $906.9M (Maximus Federal Services, Inc.)