NextGen Deadline Postponed Again, and ED Considers Selling Defaulted Loans

It’s been a while since my last update on the Department of Education’s (ED) NextGen solicitation. In January I reported that ED had released a three-part “re-do” of its original solicitation for technology and services to establish its new NextGen student loan servicing environment. Since then, the three parts have been tweaked and postponed several times. Earlier this week, on Tuesday April 30th, ED announced that the latest due date (May 8th) for proposals under the “Optimal Processing Solution” (aka part three) will be changed to a future date, to be determined.

This third part of the NextGen environment is currently where the “permanent” post-default collection services reside; ED has said that the small private debt collection agencies (PCAs) on a prior contract will be providing post-default collections in the interim. What remains unclear is how private debt collection firms (PCAs) will be able to compete for this future contract, as it seems they can only do so as prime contractors if they can provide all of the services required in the RFP. This leaves PCAs to scramble for teaming partners, and to risk revealing their "secret sauce" to companies that may be competitors in the future.

Some background

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