ARTICLE · 07 JUNE 2018

DOE Plans To Stop Using Private Debt Collectors

Troutman Pepper Locke LLP

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As disclosed in a notification filed on May 3, in FMS Investment Corp. v. United States ("the Notice"), the Department of Education ("DOE") will soon stop using private debt collectors to handle overdue student loan payments.

United StatesConsumer Protection

Amir Shachmurove

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As disclosed in a notification filed on May 3, in FMS Investment Corp. v. United States ("the Notice"), the Department of Education ("DOE") will soon stop using private debt collectors to handle overdue student loan payments.

In this post-award bid protest filed on February 9, 2018, in the United States Court of Federal Claims, twenty plaintiffs challenged the DOE's decision to award contracts for collection of defaulted student loans to just two entities. In the Notice, submitted in the midst of the parties' extensive motion practice, the DOE revealed its plan "to significantly enhance its engagement at the 90-day delinquency mark in an effort to help borrowers more effectively manage their [f]ederal student loan debt."

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