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Title 20, EducationRelease 119-110

§1087f Contracts

Title 20 › CHAPTER 28 — HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE › SUBCHAPTER IV — STUDENT ASSISTANCE › Part D — William D. Ford Federal Direct Loan Program › § 1087f

Last updated Sep 22, 2026|Official source

Summary

The Secretary must, when possible, award contracts for loan origination, loan servicing, collections, and related work. The Secretary must make sure services are offered at competitive prices. Only qualified firms or agencies may get these contracts. For loan work, contractors must have strong, relevant experience and proven success. Agencies with agreements under sections 1078(b) and (c) may be used if they meet the qualifications. The Secretary should, when practical, favor State agencies with a history of good performance for work in their State. Being part of a consortium does not stop a State agency from joining a contract. Contracts can cover alternative loan origination for students (or parents) when an institution lacks an agreement under section 1087d(b); loan servicing and collection; creating and running one or more data systems to keep loan records; and other program tasks the Secretary finds necessary for the program to work.

Full Legal Text

Title 20, §1087f

Education, Source: USLM XML via OLRC

(a)Contracts for supplies and services
(1)In general
The Secretary shall, to the extent practicable, award contracts for origination, servicing, and collection described in subsection (b). In awarding such contracts, the Secretary shall ensure that such services and supplies are provided at competitive prices.
(2)Entities
The entities with which the Secretary may enter into contracts shall include only entities which the Secretary determines are qualified to provide such services and supplies and will comply with the procedures applicable to the award of such contracts. In the case of awarding contracts for the origination, servicing, and collection of loans under this part, the Secretary shall enter into contracts only with entities that have extensive and relevant experience and demonstrated effectiveness. The entities with which the Secretary may enter into such contracts shall include, where practicable, agencies with agreements with the Secretary under section 1078(b) and (c) of this title, if such agencies meet the qualifications as determined by the Secretary under this subsection and if those agencies have such experience and demonstrated effectiveness. In awarding contracts to such State agencies, the Secretary shall, to the extent practicable and consistent with the purposes of this part, give special consideration to State agencies with a history of high quality performance to perform services for institutions of higher education within their State.
(3)Rule of construction
Nothing in this section shall be construed as a limitation of the authority of any State agency to enter into an agreement for the purposes of this section as a member of a consortium of State agencies.
(b)Contracts for origination, servicing, and data systems
The Secretary may enter into contracts for— (1)
(2)the servicing and collection of loans made or purchased under this part;
(3)the establishment and operation of 1 or more data systems for the maintenance of records on all loans made or purchased under this part; and
(4)such other aspects of the direct student loan program as the Secretary determines are necessary to ensure the successful operation of the program.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

2013—Subsec. (a)(4). Pub. L. 113–67, § 502(1)(A), struck out par. (4) which related to servicing by eligible not-for-profit servicers. Subsec. (c). Pub. L. 113–67, § 502(1)(B), struck out subsec. (c) which defined eligible not-for-profit servicer for purposes of this section. 2010—Subsec. (a)(4). Pub. L. 111–152, § 2212(a)(1)(A), added par. (4). Subsec. (c). Pub. L. 111–152, § 2212(a)(2), added subsec. (c). 2008—Subsec. (b)(2), (3). Pub. L. 110–227 inserted “or purchased” after “loans made”. 1998—Subsec. (b)(3). Pub. L. 105–244, § 453(1), inserted “and” after semicolon. Subsec. (b)(4), (5). Pub. L. 105–244, § 453(2), (3), redesignated par. (5) as (4) and struck out former par. (4) which read as follows: “services to assist in the orderly transition from the loan programs under part B of this subchapter to the direct student loan program under this part; and”. 1993—Pub. L. 103–66 amended section generally, substituting provisions relating to contracts for former provisions relating to terms and conditions.

Statutory Notes and Related Subsidiaries

Effective Date

of 1998 AmendmentAmendment by Pub. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Pub. L. 105–244, see section 3 of Pub. L. 105–244, set out as a note under section 1001 of this title.

Effective Date

Section effective Oct. 1, 1992, see section 2 of Pub. L. 102–325, set out as an

Effective Date

of 1992 Amendment note under section 1001 of this title. Selection of Student Loan Servicer Pub. L. 117–328, div. H, title III, Dec. 29, 2022, 136 Stat. 4893, provided in part: “That for student loan contracts awarded prior to
October 1, 2017, the Secretary [of Education] shall allow student loan borrowers who are consolidating Federal student loans to select from any student loan servicer to service their new consolidated student loan”. Similar provisions were contained in the following prior appropriation acts: Pub. L. 117–103, div. H, title III, Mar. 15, 2022, 136 Stat. 480. Pub. L. 116–260, div. H, title III, Dec. 27, 2020, 134 Stat. 1603. Pub. L. 116–94, div. A, title III, Dec. 20, 2019, 133 Stat. 2592. Pub. L. 115–245, div. B, title III, Sept. 28, 2018, 132 Stat. 3102. Pub. L. 115–141, div. H, title III, Mar. 23, 2018, 132 Stat. 746. Pub. L. 115–31, div. H, title III,
May 5, 2017, 131 Stat. 549.

Reference

Citations & Metadata

Citation

20 U.S.C. § 1087f

Title 20, Education

Last Updated

Sep 22, 2026

Release point: 119-110