ED Announces Debt Collection Contract Winners in Unrestricted Category

The U.S. Department of Education Thursday awarded a spot on its lucrative student loan collection contract to 17 collection agencies in the “unrestricted” business size category.

An ED spokesman said that the contractors on the small business set aside, reserved for collection agencies with less than $8.5 million in annual revenue, had not been decided.

The long-awaited contract award announcement ultimately carried very little drama, as the 17 collectors chosen Thursday mirrored the 17 unrestricted agencies ED approved to bid on the contract in June of last year (“ED Approves 26 Collection Agencies to Bid on Student Loan Collection Contract,” June 4, 2008).

But the announcement still comes as a relief for the companies that were forced to wait months to hear final word.

The new contractors on the ED debt collection contract were slated to be announced in September of last year. But the award was delayed several times in the fall (“ED Collection Contract Award Pushed Back Again,” Oct. 7, 2008).

The collection agencies announced Thursday are familiar faces on the Department of Education contract: 15 of the 17 were on the current contract, awarded in 2004.

ED’s announcement Thursday marks a significant expansion of the student loan collection contract. The 2004 contract had a total of 17 collection agencies, with 12 in the unrestricted category and five on the small business set aside. Four of the five small businesses on the 2004 were added to 2008 contract as unrestricted companies, having grown enough to no longer be considered small businesses. The remaining company on the current small business set aside, Collection Technology, Inc., was approved to bid as a small business in June, it’s fate as yet undecided.