NASFAA Statement on ED’s “Next Generation Processing and Servicing Environment” Announcement

August 1, 2017 – The Department of Education (ED) today announced that it will halt its current student loan servicing solicitation to focus on new requirements that will enhance student loan servicing. Federal Student Aid “plans a financial services/student loan industry-wide collaborative information gathering effort and will engage various stakeholders and industry technology leaders as it moves along a timeline for future contracting and deployment,” according to an ED pronouncement. Rather than moving forward with its plan to utilize a single student loan contractor to service federal student loans, as announced in May, it will allow “for customer account servicing to be performed either by a single contract servicer or by multiple contract servicers," according to the ED press release. The Department will, however, move forward with the planned implementation of a central student loan portal for borrowers.

Justin Draeger, president and CEO of the National Association of Student Financial Aid Administrators (NASFAA), made the following statement regarding the announcement:

"It is not unexpected for a new Chief Operating Officer to come onboard at FSA and take a close look at federal student loan servicing contracts. We applaud the intended direction the Department is taking to engage with stakeholders to get federal student loan servicing right. The key will be to have strong consumer-centric requirements in the contracts so borrowers can get the best service possible. Instituting a one-stop shop where students can easily access all their loan information is a great first step to help reduce miscommunication between servicers and borrowers and aligns closely with one of the recommendations put forth in NASFAA's 2015 Servicing Issues Task Force Report. As always, our highest priority will be ensuring that borrowers have a seamless experience that makes loan repayment as easy as possible. We look forward to working with our federal colleagues to make sure that happens."


The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents more than 20,000 financial aid professionals at nearly 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the United States. Based in Washington, D.C., NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit

Publication Date: 8/1/2017

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