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The Department of Education last week said in a court filing that it had awarded contracts to collect on defaulted student loans to two firms, Performant Recovery Inc. and Windham Professionals.
It's the latest development in an ongoing legal dispute over awarding of debt-collection contracts by the department stretching back to March of last year. During much of that legal dispute, a judge's order blocked the department from assigning newly defaulted accounts to debt collectors, a key step for borrowers seeking to rehabilitate their loan debt.
The new debt-collection contracts awarded to Performant and Windham Professionals could be valued at as much as $400 million.
Also last week, the department issued new notices terminating seven debt collection contracts issued in December 2016. Those 2016 contract awards set off the protracted legal dispute involving multiple loan-collection firms.
Education Secretary Betsy DeVos, before becoming secretary, once invested in Performant Recovery, The Washington Post reported. She was required to divest from holdings in the firm within 90 days of her Senate confirmation.
