ACS Education Solutions, which currently services Direct Loans but was not a winner in last month's Title IV Student Loan Management/Servicing Contract awards, has filed a protest with the U.S. Government Accountability Office, according to Student Lending Analytics.

Industry analysts were surprised that Affiliated Computer Services Inc., was not chosen for the contract and wondered "how ACS went from the sole servicer of the Direct Lending program today to potentially out of the program by August, 2010". The contract was awarded instead to the other four finalists: AES/PHEAA of Harrisburg, Pennsylvania; Great Lakes Education Loan Services, Inc. of Madison, Wisconsin; Nelnet, Inc. of Lincoln, Nebraska; and Sallie Mae Corporation of Reston, Virginia.

In a statement issued at the time of the contract award, ACS spokesman Ken Ericson said the company was assessing the government's decision. He said ACS would continue providing services under its existing direct loan contract, for up to four more years.

ACS has two bid protest cases open with the GAO, the latest of which was filed July 6. It's not clear what impact, if any, this will have on the implementation of the contract, which involves allocating servicers to FFELP loans sold to the Department. The start date for the contract was expected in August.

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