The U.S. Department of Education has granted more time for companies to submit offers to perform debt collection work under a Request for Proposal.

The Education Department plans to award multiple five-year contracts to businesses for default collection services. The deadline for offers under the RFP is now 5 p.m. Feb. 16., a delay from Jan. 22.

"To fund the work, the government will issue task orders to one or more contractors throughout the 'Base and Optional Ordering Periods', with each task order having a one year period of performance,” the RFP states.

The Education Department’s Office of Federal Student Aid first posted an RFP in July 2013 for a two-phase solicitation to consider several "changes in vendor compensation under this procurement focused on improving the quality of service borrowers receive," according to documents posted on the Federal Business Opportunities website.   Last March, the Education Department ended vendor collection contracts with five agencies including: Coast Professional,National Recoveries, Pioneer Credit, Enterprise Recovery Systems and West Asset Management. That decision came after the department's review of 22 private collection agency contracts that sought to ensure the agencies were complying with contract terms, including assuring that the agencies would not engage in unfair or deceptive practices and would comply with relevant federal and state laws. The Education Department found that some collectors had made inaccurate representations to borrowers about a loan rehabilitation program, an option that can create benefits to defaulted borrowers after they have made nine on-time payments in a period of 10 months. The five private collection agencies in question were found to have given inaccurate information at unacceptably high rates about those benefits. In particular, the agencies gave borrowers misleading information about the benefits to the borrowers' credit report and about the waiver of certain collection fees. President Obama signed an omnibus spending bill last month with a provision that creates a performance-based system by which the Education Department must give accounts to student loan servicers. 

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