The U.S. Department of Education office of Federal Student Aid (FSA) has signed contracts with five companies to provide enhanced customer support to FSA’s more than 68 million student loan customers. What is notable is what company is not on the list.
Edfinancial Services LLC, F.H. Cann & Associates LLC, MAXIMUS Federal Services Inc., Missouri Higher Education Loan Authority (MOHELA), and Texas Guaranteed Student Loan Corporation (Trellis Company) will support customers through direct engagement via contact centers and provide back-office processing support for students, parents, borrowers and partners at more than 5,800 postsecondary institutions.
Not on the list is Great Lakes and its parent company Nelnet, which were among the 11 companies that previously had contracts with the DOE. Great Lakes came under fire from several members of the U.S. Senate who demanded that the DOE take action after learning that the company inaccurately reported payment information on millions of student loans, hurting the credit scores of the borrowers. The company is also the target of a class-action lawsuit on behalf of those borrowers.
Under the new DOE program, which it calls the Next Gen Business Process Operations (BPO) solicitation, the companies listed above will correspond with customers and partners via phone, chat, social media, postal mail, and email and will support the back-office processing that is associated with those contacts. All of these operations will be supported by a centralized loan processing platform and an improved customer experience, including meaningful improvements to FSA’s web presence and outreach capabilities.
“This is another major step toward our commitment to improving customer service and holding our contractors accountable for their performance,” said U.S. Secretary of Education Betsy DeVos. “Students, parents, borrowers, and schools deserve a world-class experience when dealing with FSA, and I’m confident that FSA has hired the companies with the knowledge, experience and expertise to deliver that.”
As part of the new loan servicing environment, FSA will provide comprehensive contact center training and oversight, ensuring that agents have up-to-date knowledge of federal student aid programs to give customers the right answer in every interaction. “Accountability is non-negotiable when it comes to our contractors and to FSA,” said Mark Brown, chief operating officer at Federal Student Aid. “These contracts are a vital step forward in providing our students, borrowers, their families, and partners with better experiences with our programs. We also are taking further steps to streamline FSA operations and protect taxpayer dollars.”
“We are shocked that the two highest rated servicers and the dedicated employees who are responsible for achieving those rankings will not be considered by the Department for this contract,” said Jeff Noordhoek, chief executive officer of Nelnet in a statement released to the media. “We are frustrated and disappointed by this decision and the lack of transparency in the process and will pursue every legal avenue available to ensure that students have the high quality service they’ve come to expect from us. The federal student loan program is very complicated to administer, and to simply throw away the training and experience of Nelnet, Great Lakes, and our dedicated associates is a recipe for an implementation disaster that will negatively impact borrowers.”