Department of Education awards $137M for student aid servicing to Nelnet, ending March 2018
Contract Overview
Contract Amount: $137,075,648 ($137.1M)
Contractor: Nelnet Servicing LLC
Awarding Agency: Department of Education
Start Date: 2016-09-01
End Date: 2018-03-25
Contract Duration: 570 days
Daily Burn Rate: $240.5K/day
Competition Type: FULL AND OPEN COMPETITION
Number of Offers Received: 4
Pricing Type: FIRM FIXED PRICE
Sector: Other
Official Description: IGF::CT::IGF SERVICING OF TITLE IV STUDENT FINANCIAL AID, FROM 9/1/2016 THROUGH 8/31/2017. PROVIDES FUNDING FOR TITLE IV AID SERVICING, THROUGH APPROXIMATELY, 08/31/2017. PROVIDES FUNDING FOR THE DELINQUENCY REDUCTION COMPENSATION PROGRAM, IN A NOT-TO-EXCEED AMOUNT OF $500,000 PER QUARTER AND $2,000,000 ANNUALLY.
Place of Performance
Location: LINCOLN, LANCASTER County, NEBRASKA, 68508
State: Nebraska Government Spending
Plain-Language Summary
Department of Education obligated $137.1 million to NELNET SERVICING LLC for work described as: IGF::CT::IGF SERVICING OF TITLE IV STUDENT FINANCIAL AID, FROM 9/1/2016 THROUGH 8/31/2017. PROVIDES FUNDING FOR TITLE IV AID SERVICING, THROUGH APPROXIMATELY, 08/31/2017. PROVIDES FUNDING FOR THE DELINQUENCY REDUCTION COMPENSATION PROGRAM, IN A NOT-TO-EXCEED AMOUNT OF $500,000 … Key points: 1. Contract value of $137M for student financial aid servicing. 2. Competition was full and open, suggesting market-driven pricing. 3. Risk appears moderate given the established nature of student loan servicing. 4. Sector is Other Activities Related to Credit Intermediation.
Value Assessment
Rating: good
The contract value of $137M for a 570-day period appears reasonable for large-scale student loan servicing operations. Benchmarking against similar contracts would provide a more precise assessment of value.
Cost Per Unit: N/A
Competition Analysis
Competition Level: full-and-open
The contract was awarded under full and open competition, which typically leads to competitive pricing. The use of a Firm Fixed Price contract further supports price certainty for the government.
Taxpayer Impact: Taxpayer funds are used to ensure the efficient servicing of federal student financial aid programs.
Public Impact
Ensures continued access to federal student financial aid for students. Supports the operational infrastructure for managing student loan portfolios. Aims to reduce delinquency in student loan payments through specific programs.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Potential for scope creep in aid servicing requirements.
- Reliance on a single contractor for critical financial operations.
Positive Signals
- Clear contract duration and end date.
- Use of a Firm Fixed Price contract for cost control.
Sector Analysis
This contract falls within the 'Other Activities Related to Credit Intermediation' sector, which involves the administration and servicing of financial assets. Spending in this area is crucial for the functioning of federal lending programs.
Small Business Impact
The data does not indicate any specific provisions or set-asides for small businesses in this contract. The primary contractor, Nelnet Servicing LLC, is a large entity.
Oversight & Accountability
The Department of Education is responsible for overseeing this contract to ensure proper servicing of student financial aid. The Inspector General's office may conduct audits to ensure compliance and efficiency.
Related Government Programs
- Other Activities Related to Credit Intermediation
- Department of Education Contracting
- Department of Education Programs
Risk Flags
- Contract duration extends beyond the initial award period.
- Potential for increased administrative burden on the Department of Education.
- Dependence on contractor for sensitive student financial data.
- Risk of service disruptions if contractor faces financial or operational issues.
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 $137.1 million to NELNET SERVICING LLC. IGF::CT::IGF SERVICING OF TITLE IV STUDENT FINANCIAL AID, FROM 9/1/2016 THROUGH 8/31/2017. PROVIDES FUNDING FOR TITLE IV AID SERVICING, THROUGH APPROXIMATELY, 08/31/2017. PROVIDES FUNDING FOR THE DELINQUENCY REDUCTION COMPENSATION PROGRAM, IN A NOT-TO-EXCEED AMOUNT OF $500,000 PER QUARTER AND $2,000,000 ANNUALLY.
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 $137.1 million.
What is the period of performance?
Start: 2016-09-01. End: 2018-03-25.
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 loan volume. Their performance is generally considered stable, though specific metrics on delinquency reduction and borrower satisfaction would offer a more detailed picture of their effectiveness in this particular contract.
What are the key performance indicators (KPIs) used to measure the success of this student aid servicing contract?
Key performance indicators likely include metrics such as loan default rates, delinquency reduction, borrower satisfaction scores, processing times for aid applications and disbursements, and adherence to regulatory compliance. The 'Delinquency Reduction Compensation Program' suggests a specific KPI focused on reducing late payments.
How does the cost of this contract compare to industry benchmarks for student loan servicing?
Without specific cost breakdowns per loan or per service, a direct comparison to industry benchmarks is difficult. However, the full and open competition and firm fixed-price structure suggest the Department of Education sought competitive pricing. Further analysis of the contract's specific deliverables against per-unit costs would be needed for a precise benchmark.
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.
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: $137,075,648
Exercised Options: $137,075,648
Current Obligation: $137,075,648
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES
Parent Contract
Parent Award PIID: EDFSA09D0013
IDV Type: IDC
Timeline
Start Date: 2016-09-01
Current End Date: 2018-03-25
Potential End Date: 2018-03-25 00:00:00
Last Modified: 2022-10-31
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