STANDARD FORM 1449 (REV. 3/2005) BACK

19.

ITEM NO.

20.

SCHEDULE OF SUPPLIES/SERVICES

21.

QUANTITY

22.

UNIT

23.

UNIT PRICE

24.

AMOUNT

32a. QUANTITY IN COLUMN 21 HAS BEEN

RECEIVED INSPECTED ACCEPTED, AND CONFORMS TO THE CONTRACT, EXCEPT AS NOTED:

41a. I CERTIFY THIS ACCOUNT IS CORRECT AND PROPER FOR PAYMENT

32b. SIGNATURE OF AUTHORIZED GOVERNMENT

REPRESENTATIVE

32c. DATE

41b. SIGNATURE AND TITLE OF CERTIFYING OFFICER 41c. DATE

42a. RECEIVED BY (Print)

42b. RECEIVED AT (Location)

42c. DATE REC'D (YY/MM/DD) 42d. TOTAL CONTAINERS

40. PAID BY

32d. PRINTED NAME AND TITLE OF AUTHORIZED GOVERNMENT 

REPRESENTATIVE

32e. MAILING ADDRESS OF AUTHORIZED GOVERNMENT REPRESENTATIVE 32f. TELPHONE NUMBER OF AUTHORZED GOVERNMENT REPRESENTATIVE

32g. E-MAIL OF AUTHORIZED GOVERNMENT REPRESENTATIVE

33. SHIP NUMBER 34. VOUCHER NUMBER 35. AMOUNT VERIFIED 

CORRECT FOR

PARTIAL FINAL

37. CHECK NUMBER

38. S/R ACCOUNT NO. 39. S/R VOUCHER NUMBER

36. PAYMENT

COMPLETE PARTIAL FINAL
Accounting and Appropriation Data:

0198M2009.A.2009.ENB00000.6P2.2572A.C26.000.0000.000000

Cost Applied: $5,000,000.00

0001 IDIQ Base Ordering Period Award Minimum Guarantee

Period of Performance: 06/17/2009 - 06/16/2014

1.00 SE 5,000,000.00 5,000,000.00

0002 OPTION - Optional Ordering Period

Optional Period of Performance: 06/17/2014 -

06/16/2019

1.00 EA 0.00 0.00

SCHEDULE Continued

ITEM NO. SUPPLIES/SERVICES QUANTITY UNIT UNIT PRICE $ AMOUNT $

PAGE 2 OF
Solicitation Number: FSA-TitleIV-09 Page 1 of 20 

A. ADDENDUM 1 – SF 1449 CONTINUATION PAGE

(This page left blank intentionally.) 
Solicitation Number: FSA-TitleIV-09 Page 2 of 20 

B. ADDENDUM 2 – 52.212-4, CONTRACT TERMS AND CONDITIONS—

COMMERCIAL ITEMS (MAR 2009)

B.1 52.212-4 Contract Terms And Conditions—Commercial Items (Mar 2009)—

TAILORED 

(c)(1) Changes. The Contracting Officer may at any time, by written order, and without notice 

to the sureties, if any, make changes within the general scope of this contract in any one 

or more of the following: 

 (i) Description of services to be performed. 

 (ii) Time of performance (i.e., hours of the day, days of the week, etc.). 

 (iii) Place of performance of the services. 

 (2) If any such change causes an increase or decrease in the cost of, or the time 

required for, performance of any part of the work under this contract, whether or 

not changed by the order, the Contracting Officer shall make an equitable 

adjustment in the contract price, the delivery schedule, or both, and shall modify 

the contract. 

 (3) The Contractor must assert its right to an adjustment under this clause within 30 

days from the date of receipt of the written order. However, if the Contracting 

Officer decides that the facts justify it, the Contracting Officer may receive and 

act upon a proposal submitted before final payment of the contract. 

 (4) If the Contractor’s proposal includes the cost of property made obsolete or excess 

by the change, the Contracting Officer shall have the right to prescribe the manner 

of the disposition of the property. 

(5) Failure to agree to any adjustment shall be a dispute under the Disputes clause. 

However, nothing in this clause shall excuse the Contractor from proceeding with 

the contract as changed. 

B.2 52.252-2 Clauses Incorporated By Reference (Feb 1998) 

This contract incorporates one or more clauses by reference, with the same force and effect as if 

they were given in full text. Upon request, the Contracting Officer will make their full text 

available. The full text of a clause may also be accessed electronically at: 

http://www.arnet.gov/far/ 

• 52.203-13 Contractor Code of Business Ethics and Conduct (Dec 2008) 

• 52.203-14 Display of Hotline Poster(s) (Dec 2007) 

• 52.209-6 Protecting the Government’s Interest when Subcontracting with 

Contractors Debarred, Suspended, or Proposed for Debarment (SEP 2006)

• 52.216-18 Ordering (OCT 1995)

(a) the effective date of award, the end of the current period of 

performance

• 52.216-19 Ordering Limitations (OCT 1995)

(a) One Borrower 

(b)(1) Five Million Borrowers 

(b)(2) Five Million Borrowers 

(b)(3) Two Days 

(d) One Day 

• 52.216-22 Indefinite Quantity (OCT 1995)
Solicitation Number: FSA-TitleIV-09 Page 3 of 20 

 (d) the end of the current period of performance

• 52.216-27 Single Or Multiple Awards (OCT 1995)

• 52.217-8 Option To Extend Services (NOV 1999)

• 52.217-9 Option to Extend the Term of the Contract (MAR 2000)

• 52.224-1 Privacy Act Notification (APR 1984)

• 52.224-2 Privacy Act (APR 1984)

B.3 EDAR 3452.202-1 Definitions (Aug 1987) – TAILORED 

(a) The term "Secretary" or "Head of the Agency" (also called "Agency Head") means the 

Secretary of the Department of Education; and the term "his/her duly authorized 

representative" means any person, persons, or board authorized to act for these officials. 

(b) “Chief Acquisition Officer” or “CAO” means the official responsible for monitoring the 

agency’s acquisition activities, evaluating them based on applicable performance 

measurements, increasing the use of full and open competition in agency acquisitions, 

making acquisition decisions consistent with applicable laws, and establishing clear lines of 

authority, accountability, and responsibility for acquisition decision-making and developing 

and maintaining a acquisition career management program. 

(c) "Chief of the Contracting Office" means an official serving in the contracting activity (CAM 

or FSA Acquisitions) as the manager of a group that awards and administers contracts for a 

principal office of the Department. See also definition of “Head of Contracting Activity” 

below. 

(d) “Contracting Officer's Representative” or “COR” means a government employee appointed 

in writing ONLY by a contracting officer and delegated limited responsibilities to perform 

specified contract management duties related to technical oversight and administration of a 

specific contract. CORs may serve in a full-time or part-time capacity. The COR performs 

the contract management duties assigned by the CO in a written "Contracting Officer's 

Representative Designation Memorandum" for each particular contract. Multiple CORs may 

be appointed for a single contract when the area of expertise necessary requires such 

appointments. The CO may appoint alternate or assistant CORs to serve in the COR's 

absence. For the purpose of this program, the term Contracting Officer's Technical 

Representative (COTR) will be used for assistant CORs. 

(e) “Head of the Contracting Activity” or “HCA” means those officials within the Department of 

Education who have responsibility for and manage an acquisition organization and usually 

hold unlimited procurement authority. The Director, Federal Student Aid Acquisitions, is the 

HCA for FSA. The Director, Contracts and Acquisitions Management (CAM) is the HCA for 

all other Departmental program offices and all boards, commissions, and councils under the 

management control of the Department. 

(f) “Performance-Based Organization” or “PBO” is the office within the Department that is 

mandated by Public Law 105-244 to carry out Federal student assistance or aid programs and 

report to Congress on an annual basis. It may also be referred to as “Federal Student Aid.” 

(g) “Senior Procurement Executive” or “SPE” means the single agency official appointed as such 

by the head of the agency and delegated broad responsibility for acquisition functions, 

including issuing agency acquisition policy and reporting on acquisitions agency-wide. The 

SPE also acts as the official one level above the contracting officer when the HCA is acting 

as a contracting officer. 

(h) "Department" or "ED" means the United States Department of Education. 
Solicitation Number: FSA-TitleIV-09 Page 4 of 20 

B.4 ED 307-17 Conflicts Of Interest (Aug 2007) 

(a) The contractor, subcontractor, employee or consultant, has certified that, to the best of their 

knowledge and belief, there are no relevant facts or circumstances which could give rise to an 

organizational or personal conflict of interest, (see FAR Subpart 9.5 for organizational 

conflicts of interest), (or apparent conflict of interest) for the organization or any of its staff, 

and that the contractor, subcontractor, employee or consultant has disclosed all such relevant 

information if such a conflict of interest appears to exist to a reasonable person with 

knowledge of the relevant facts (or if such a person would question the impartiality of the 

contractor, subcontractor, employee or consultant). Conflicts may arise in the following 

situations: 

(1) Unequal access to information – a potential contractor, subcontractor, employee or 

consultant has access to non-public information through its performance on a government 

contract. 

(2) Biased ground rules – a potential contractor, subcontractor, employee or consultant has 

worked, in one government contract, or program, on the basic structure or ground rules of 

another government contract, 

(3) Impaired objectivity – a potential contractor, subcontractor, employee or consultant, or 

member of their immediate family (spouse, parent or child) has financial or other 

interests that would impair, or give the appearance of impairing, impartial judgment in 

the evaluation of government programs, in offering advice or recommendations to the 

government, or in providing technical assistance or other services to recipients of Federal 

funds as part of its contractual responsibility. 

"Impaired objectivity" includes but is not limited to the following situations that would 

cause a reasonable person with knowledge of the relevant facts to question a person's 

objectivity: 

(i) financial interests or reasonably foreseeable financial interests in or in connection 

with products, property, or services that may be purchased by an educational agency, 

a person, organization, or institution in the course of implementing any program 

administered by the Department; 

(ii) significant connections to teaching methodologies that might require or encourage the 

use of specific products, property or services; or 

(iii)significant identification with pedagogical or philosophical viewpoints that might 

require or encourage the use of a specific curriculum, specific products, property or 

services, 

Offerors must provide the disclosure described above on any actual or potential conflict 

(or apparent conflict of interest) of interest regardless of their opinion that such a conflict 

or potential conflict (or apparent conflict of interest) would not impair their objectivity. 

In a case in which an actual or potential conflict (or apparent conflict of interest) is 

disclosed, the Department will take appropriate actions to eliminate or address the actual 

or potential conflict (or apparent conflict of interest), including but not limited to 

mitigating or neutralizing the conflict, when appropriate, through such means as ensuring 

a balance of views, disclosure with the appropriate disclaimers, or by restricting or 

modifying the work to be performed to avoid or reduce the conflict. In this clause, the 

term “potential conflict” means reasonably foreseeable conflict of interest. 
Solicitation Number: FSA-TitleIV-09 Page 5 of 20 

 (b) The contractor, subcontractor, employee or consultant agrees that if “impaired objectivity, or 

an actual or potential conflict of interest (or apparent conflict of interest) is discovered after 

the award is made, it will make a full disclosure in writing to the Contracting Officer. This 

disclosure shall include a description of actions that the Contractor has taken or proposes to 

take, after consultation with the Contracting Officer, to avoid, mitigate, or neutralize the 

actual or potential conflict (or apparent conflict of interest). 

(c) Remedies - The Government may terminate this contract for convenience, in whole or in 

part, if it deems such termination necessary to avoid the appearance of a conflict of interest. 

If the Contractor was aware of a potential conflict of interest prior to award or discovered an 

actual or potential conflict (or apparent conflict of interest) after award and did not disclose 

or misrepresented relevant information to the Contracting Officer, the Government may 

terminate the contract for default, or pursue such other remedies as may be permitted by law 

or this contract. These remedies include imprisonment for up to five years for violation of 

Title 18, U.S. Code, § 1001 and fines of up to $5000 for violation of Title 31, U.S. Code, § 

3802. Further remedies include suspension or debarment from contracting with the federal 

government. The Contractor may also be required to reimburse the Department for costs the 

Department incurs arising from activities related to conflicts of interest. An example of such 

costs would be those incurred in processing Freedom of Information Act requests related to a 

conflict of interest. 

(d) In cases where remedies short of termination have been applied, the contractor, 

subcontractor, employee or consultant agrees to eliminate the organizational conflict of 

interest, or mitigate it to the satisfaction of the Contracting Officer. 

(e) The Contractor further agrees to insert in any subcontract or consultant agreement hereunder, 

provisions which shall conform substantially to the language of this clause, including specific 

mention of potential remedies and this paragraph (e). 

B.5 EDAR 3452.208-70 Printing (Aug 1987) 

Unless otherwise specified in this contract, the contractor shall not engage in, nor subcontract 

for, and printing (as that term is defined in Title I of the Government Printing and Binding 

Regulations in effect on the effective date of this contract) in connection with the performance of 

work under this contract; except that performance involving the reproduction of less than 5,000 

production units of any one page, or less than 25,000 production units in the aggregate of 

multiple pages, shall not be deemed to be printing. A production unit is defined as one sheet, size 

8 1/2 by 11 inches, and one side and color only. 

B.6 FSA 24-1 Release Of Information Under The Freedom Of Information Act (Jan 

2008)—TAILORED 

By entering into a contract with the Department of Education and as permitted/authorized by 

existing statutes and applicable case law, without regard to proprietary markings, the contractor 

approves the release of the entire contract and all related modifications and task orders, 

including, but not limited to: 

(1) Unit prices, including labor rates, 

(2) Statements of Work/Performance Work Statement generated by the contractor, 

(3) Performance requirements, including incentives, performance standards, quality levels 

and service level agreements, 
Solicitation Number: FSA-TitleIV-09 Page 6 of 20 

(4) Reports, deliverables and work products delivered in performance of the contract 

(including quality of service, performance against requirements/standards/service level 

agreements), 

(5) Any and all information, data, software and related documentation first provided under 

the contract, 

(6) Proposals or portions of proposals incorporated by reference, and 

(7) Other terms and conditions. 

B.7 FSA 27-1 Labeling Of Documents (June 2007)—TAILORED

The Contractor shall not label any data, as defined in the clause at 52.227-14, produced in 

performance of this contract in a way that would restrict the Government's right to use or release 

the information. If applicable, the Contractor shall include a legend that identifies sensitive data 

that should not be released for security reasons. Under FAR 52.227-14, Rights in Data-General 

(or 52.227-15, -16, -17) clause, this data may be used for any public purpose. Deliverables shall 

not contain vendor-specific logos, mottos, watermarks, or holograms. 

The Contractor shall not use, particularly for proposals, U.S. Government logos, such as the U.S. 

Department of Education or Federal Student Aid. 

B.8 FSA 27-2 Limitations On The Use Or Disclosure Of Government-Furnished 

Information Marked With Restrictive Legends (Dec 2006) 

(a) For contracts under which data are to be produced, furnished, or acquired, the terms “limited 

rights” and “restricted rights” are defined in the Rights in Data - General clause of this 

contract. 

(b) Proprietary data, technical data or computer software provided to the Contractor as 

Government furnished information (GFI) under this contract may be subject to restrictions on 

use, modification, reproduction, release, performance, display, or further disclosure. 

(1) Proprietary data with legends that serve to restrict disclosure or use of data. The 

Contractor shall use, modify, reproduce, perform, or display proprietary data received 

from the Government with proprietary or restrictive legends only in the performance of 

this contract. The Contractor shall not, without the express written permission of the 

party who owns the data, release or disclose such data or software to any person. 

(2) GFI marked with limited or restricted rights legends. The Contractor shall use, modify, 

reproduce, perform, or display technical data received from the Government with limited 

rights legends or computer software received with restricted rights legends only in the 

performance of this contract. The Contractor shall not, without the express written 

permission of the party whose name appears in the legend, release or disclose such data 

or software to any person. 

(3) GFI marked with specially negotiated license rights legends. The Contractor shall use, 

modify, reproduce, release, perform, or display proprietary data, technical data or 

computer software received from the Government with specially negotiated license 

legends only as permitted in the license. Such data or software may not be released or 

disclosed to other persons unless permitted by the license and, prior to release or 

disclosure, the intended recipient has completed the use and non-disclosure agreement. 

The Contractor shall modify paragraph (1)(c) of the use and non-disclosure agreement to 

reflect the recipient's obligations regarding use, modification, reproduction, release, 
Solicitation Number: FSA-TitleIV-09 Page 7 of 20 

performance, display, and disclosure of the data or software. 

(c) Indemnification and creation of third party beneficiary rights. 

(1) The Contractor agrees to indemnify and hold harmless the Government, its agents, and 

employees from every claim or liability, including attorneys fees, court costs, and 

expenses, arising out of, or in any way related to, the misuse or unauthorized 

modification, reproduction, release, performance, display, or disclosure of proprietary 

data, technical data or computer software received from the Government with restrictive 

legends by the Contractor or any person to whom the Contractor has released or disclosed 

such data or software. 

(2) The Contractor agrees that the party whose name appears on the restrictive legend, in 

addition to any other rights it may have, is a third party beneficiary who has the right of 

direct action against the Contractor, or any person to whom the Contractor has released or 

disclosed such data or software, for the unauthorized duplication, release, or disclosure of 

proprietary data, technical data or computer software subject to restrictive legends. 

B.9 FSA 27-3 Use And Non-Disclosure Agreement 

(a) Except as provided in paragraph (b) of this clause, proprietary data, technical data or 

computer software delivered to the Government with restrictions on use, modification, 

reproduction, release, performance, display, or disclosure may not be provided to third 

parties unless the intended recipient completes and signs the use and non-disclosure 

agreement at paragraph (c) of this clause prior to release or disclosure of the data. 

(1) The specific conditions under which an intended recipient will be authorized to use, 

modify, reproduce, release, perform, display, or disclose proprietary data or technical 

data subject to limited rights, or computer software subject to restricted rights must be 

stipulated in an attachment to the use and non-disclosure agreement. 

(2) For an intended release, disclosure, or authorized use of proprietary data, technical data 

or computer software subject to special license rights, modify paragraph (1)(d) of the use 

and non-disclosure agreement to enter the conditions, consistent with the license 

requirements, governing the recipient's obligations regarding use, modification, 

reproduction, release, performance, display or disclosure of the data or software. 

(b) The requirement for use and non-disclosure agreements does not apply to Government 

contractors which require access to a third party's data or software for the performance of a 

Government contract that contains the clause, Limitations on the Use or Disclosure of 

Government Furnished Information Marked with Restrictive Legends. 

(c) The prescribed use and non-disclosure agreement is: 

USE AND NON-DISCLOSURE AGREEMENT 

The undersigned, ___(Insert Name) ___, an authorized representative of the ___(Insert 

Company Name) ___, (which is hereinafter referred to as the “Recipient”) requests the 

Government to provide the Recipient with proprietary data, technical data or computer 

software (hereinafter referred to as “Data”) in which the Government's use, modification, 

reproduction, release, performance, display or disclosure rights are restricted. Those Data are 

identified in an attachment to this Agreement. In consideration for receiving such Data, the 

Recipient agrees to use the Data strictly in accordance with this Agreement: 

 (1) The Recipient shall — 
Solicitation Number: FSA-TitleIV-09 Page 8 of 20 

(a) Use, modify, reproduce, release, perform, display, or disclose Data marked with 

SBIR data rights legends only for government purposes and shall not do so for any 

commercial purpose. The Recipient shall not release, perform, display, or disclose 

these Data, without the express written permission of the contractor whose name 

appears in the restrictive legend (the “Contractor”), to any person other than its 

subcontractors or suppliers, or prospective subcontractors or suppliers, who require 

these Data to submit offers for, or perform, contracts with the Recipient. The 

Recipient shall require its subcontractors or suppliers, or prospective subcontractors 

or suppliers, to sign a use and non-disclosure agreement prior to disclosing or 

releasing these Data to such persons. Such agreement must be consistent with the 

terms of this agreement. 

(b) Use, modify, reproduce, release, perform, display, or disclose proprietary data or 

technical data marked with limited rights legends only as specified in the attachment 

to this Agreement. Release, performance, display, or disclosure to other persons is not 

authorized unless specified in the attachment to this Agreement or expressly 

permitted in writing by the Contractor. 

(c) Use computer software marked with restricted rights legends only in performance of 

Contract Number ___(insert contract number(s)) ___. The Recipient shall not, for 

example, enhance, decompile, disassemble, or reverse engineer the software; time 

share, or use a computer program with more than one computer at a time. The 

recipient may not release, perform, display, or disclose such software to others unless 

expressly permitted in writing by the licensor whose name appears in the restrictive 

legend. 

(d) Use, modify, reproduce, release, perform, display, or disclose Data marked with 

special license rights legends (To be completed by the contracting officer. See (a)(2) 

of the Use and Non-Disclosure Agreement clause. Omit if none of the Data requested 

is marked with special license rights legends). 

(2) The Recipient agrees to adopt or establish operating procedures and physical security 

measures designed to protect these Data from inadvertent release or disclosure to 

unauthorized third parties. 

(3) The Recipient agrees to accept these Data “as is” without any Government representation 

as to suitability for intended use or warranty whatsoever. This disclaimer does not affect 

any obligation the Government may have regarding Data specified in a contract for the 

performance of that contract. 

(4) The Recipient may enter into any agreement directly with the Contractor with respect to 

the use, modification, reproduction, release, performance, display, or disclosure of these 

Data. 

(5) The Recipient agrees to indemnify and hold harmless the Government, its agents, and 

employees from every claim or liability, including attorneys fees, court costs, and 

expenses arising out of, or in any way related to, the misuse or unauthorized 

modification, reproduction, release, performance, display, or disclosure of Data received 

from the Government with restrictive legends by the Recipient or any person to whom the 

Recipient has released or disclosed the Data. 

(6) The Recipient is executing this Agreement for the benefit of the Contractor. The 

Contractor is a third party beneficiary of this Agreement who, in addition to any other 

rights it may have, is intended to have the rights of direct action against the Recipient or 
Solicitation Number: FSA-TitleIV-09 Page 9 of 20 

any other person to whom the Recipient has released or disclosed the Data, to seek 

damages from any breach of this Agreement or to otherwise enforce this Agreement. 

(7) The Recipient agrees to destroy these Data, and all copies of the Data in its possession, 

no later than 30 days after the date shown in paragraph (8) of this Agreement, to have all 

persons to whom it released the Data do so by that date, and to notify the Contractor that 

the Data have been destroyed. 

(8) This Agreement shall be effective for the period commencing with the Recipient's 

execution of this Agreement and ending upon ___(Insert Date) ___. The obligations 

imposed by this Agreement shall survive the expiration or termination of the Agreement. 

______________________________________ 

Recipient's Business Name 

______________________________________ _____________________ 

Authorized Representative Date 

______________________________________ 

Representative's Typed Name and Title 

B.10 FSA 31-1 Proposal Cost And/Or Pricing Data (August 2008) 

Federal Student Aid intends to collect cost, pricing and technical information submitted in 

response to proposals. Information will be evaluated and stored in Federal Student Aid's Cost 

Library in order to expand the organizations historical pricing data and cost estimating 

capabilities. 

B.11 FSA 32-1 Invoice Procedures (August 2007) 

The Contractor must submit a physical invoice via either mail, fax or e-mail for this contract in 

order to be paid for products and/or services rendered. 

Federal Student Aid's "designated billing office" is: 

US Department of Education 

Union Center Plaza 

Federal Student Aid Administration 

830 First Street, NE, Suite 54B1 

Washington, D.C. 20202-0001 

E-mail: InvoiceAdmin@ed.gov 

Fax: 202-275-3477 

The Contractor shall also simultaneously submit copies of the invoice to the Contracting Officer 

and one to the Contracting Officer's Representative (COR). The CO and COR should receive 

copies via the same means as the invoice sent to the Budget Group. 

When submitting an invoice via mail, the Contractor shall submit the original invoice AND two 

copies of the invoice. 

At a minimum the following items must be addressed in order for the invoice to be considered 

"proper" for payment: 
Solicitation Number: FSA-TitleIV-09 Page 10 of 20 

(1) Name and Address of the Contractor. 

(2) Invoice Number and Invoice Date (Date invoices as close as possible to the date of 

mailing or transmission. The date and actual submission must occur after receipt, 

inspection and acceptance of the supplies or services.) 

(3) The Contract number, contract line item, and if applicable, the order number must be 

included on the invoice and be correct. 

(4) Description, quantity, unit of measure, unit price, and extended price of the item 

delivered must agree with the contract or order. 

(5) Terms of any prompt payment discount offered. 

(6) Name, title, and phone number of persons to be notified in event of defective invoice. 

(7) The period of time covered by the invoice must include the first and last day of the 

period. 

(8) Totals must be supported by subtotals and subtotals should be supported by detail, (i.e. 

documentation for categories of labor, hours performed, unit prices) and deliverables 

provided. 

(9) If required by this contract or order, receipts must be provided to support documentation 

of "other direct costs" (ODCs) or materials. 

B.12 AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (Pub.L. 111-5) 

In the event funds are utilized on this contract originating from the American Recovery and 

Reinvestment Act of 2009, or other discrete legislation, the following clauses, or similar clauses, 

shall apply: 

• 52.203-15 Whistleblower Protections Under The American Recovery And 

Reinvestment Act Of 2009 (Mar 2009) 

• 52.204-11 American Recovery And Reinvestment Act—Reporting Requirements 

(Mar 2009) 

• 52.212-5 Contract Terms and Conditions Required to Implement Statutes or 

Executive Orders—Commercial Items (Mar 2009)—Alternate II (Mar 2009) 

• 52.215-2 Audit And Records—Negotiation—Alternate I (Mar 2009) 

• EDAR 3403-1 Self Reporting Of Violations – Recovery Act (Feb 2009) 

The contractor and subcontractor shall promptly refer to an appropriate inspector general 

any credible evidence that a principal, employee, agent, contractor, sub-grantee or 

subcontractor has committed a violation of Federal criminal law involving fraud, conflict 

of interest, bribery, or gratuity violations found in Title 18 U.S.C. or a violation of the 

civil False Claims Act (31 U.S.C. 3729-3733). 

B.13 ADDITIONAL TERMS AND CONDITIONS 

A. Contract Type—Indefinite Delivery/Indefinite Quantity (IDIQ). During the course of the 

basic ordering period, the Government will provide a minimum of $5,000,000.00 in revenue, 

provided that the contractor is in compliance with the requirements for servicing federally 

held debt, and the maximum volume for the basic ordering period agreement will be 50 

million borrowers. The Optional Ordering Period will have a minimum of $0 and a 

maximum of an additional 50 million borrowers 

B. Ordering Period—The ordering period for this contract will be one (1), five (5) year Base 

Ordering Period, with one (1) additional five (5) year Optional Ordering Period. 
Solicitation Number: FSA-TitleIV-09 Page 11 of 20 

C. Requirements Deadlines—The contractor shall comply with the following compliance 

requirements deadlines: 

(1) The contractor shall meet the Initial Requirements by August 31, 2009 for servicing 

federally held debt. If these are met, FFEL servicing may begin. 

(2) The contractor shall meet the Intermediate Requirements by March 31, 2010 (unless 

otherwise noted within the Intermediate Requirements document), for servicing federally 

held debt. If all requirements are not met, the Government may elect to not assign further 

volume to the contractor. Furthermore, the Government may transfer currently held 

accounts to another servicer. The contractor losing the accounts shall bear the costs of 

any such transfer. 

(3) The contractor shall meet the Full Requirements by August 31, 2010 for Direct Loan 

servicing. If the Government determines the requirements are not met, the Government 

may elect to not assign further volume to the contractor. Furthermore, the Government 

may transfer currently held accounts to another servicer. The contractor losing the 

accounts shall bear the costs for any such transfer. 

D. Quarterly Compliance Monitoring—[Reserved]

E. Annual Compliance Audit—[Reserved] 

F. Allocation Methodology—See Attachments A-4 and A-5. 

G. Allocation Metrics— See Attachments A-4 and A-5.

H. Performance Incentives/Metrics—[Reserved] 

I. Price Definitions—See Attachment A-6. 

J. Work Performed Outside the Continental United States—The Contractor has represented 

to the Department that it will perform all work required under this Contract within the United 

States. If, at any time, the Contractor wishes to perform any Contract work outside the United 

States, the Contractor shall inform the Contracting Officer, in advance and in writing, of its 

intention and request the Department’s approval. The Contractor shall not perform any 

Contract work outside the United States unless and until it has received the Contracting 

Officer’s explicit, written approval to perform such work. In order to give proper 

consideration to the Contractor’s request, the Department may ask for, and the Contractor 

shall provide, information relevant to the proposed performance outside the United States, 

including but not limited to a detailed description of the physical, personnel and management 

resources to be used and any potential difficulties or constraints in performing in the foreign 

jurisdiction. The Department may refuse to approve Contract performance outside the United 

States to the extent that, solely in the Department’s judgment, the Contractor has not shown 

that performance outside the United States would satisfy the Contract requirements and 

would not impair or degrade performance. Further, the Department may refuse to approve 

any performance outside the United States for any other reason, or for no reason, except as 

otherwise required by the laws and treaties of the United States. The Department also may 

approve performance outside the United States subject to certain conditions, to which 

conditions the Contractor shall strictly adhere. Neither performance within the United States, 

nor the Department’s refusal to allow performance outside the United States shall ever 

constitute a change to this Contract or give rise to any entitlement to additional compensation 

or excuse any failure of performance by the Contractor. Nothing in this clause shall be 

interpreted to impose any obligation on the Department to allow or to refuse a request for 

performance of this Contract outside the United States. 
Solicitation Number: FSA-TitleIV-09 Page 12 of 20 

K. Branding/Marketing Material—Contractors may not solicit or promote other 

services/products they, or their affiliates, offer while servicing Department of Education 

borrowers, or Federally held debt. This includes all communication channels and touch 

points, such as but not limited to: inbound and outbound calls/email, web pages, any mailings 

specific to the status of their account, direct personal and automated interaction, etc. 

Scenarios: (1) if the servicer services Federally and non-Federally held debt and offers 

combined billing, no marketing envelopes or inserts for other services/products may be 

issued; (2) if the servicer services Federally and non-Federally held debt and does NOT use 

combined billing, normal marketing may be provided for non- Federally held debt for other 

services/products; and (3) if the servicer services Federally and non-Federally held debt and 

is in personal contact, no marketing for other services/products may be discussed. If a 

borrower with in-school status seeks information regarding other products or services from 

the servicer, the borrower shall be directed to their school’s Student Financial Assistance 

Office. 

Any exception or ambiguity regarding the above shall be reviewed and approved by the 

Contracting Officer in advance. 

L. Invoicing and Non-Compliance – Borrowers whose loans are not being serviced in 

compliance with the Requirements, Policy and Procedures for servicing federally held debt 

due to the fault of the servicer (i.e. correct interest calculations, correct balances, interest 

determination and calculations, notices sent properly, proper due diligence, etc.), will not be 

billable to the Government from the initial point of non-compliance. Any funds that have 

been invoiced for these borrowers and paid shall be returned to the Government via a credit 

on the next invoice. 

M. Contracting Officer’s Representative – The following individual is designated as 

Contracting Officer’s Representative (COR) for this contract: 

 Mr. James McMahon 

 Federal Student Aid 

 830 First Street, NE 

 Suite 111G5 

 Washington, DC 20202 

 Email: james.mcmahon@ed.gov 

 Phone: (202) 377-3124 

N. Additional Terms:

1. The Title IV Servicing contracts are for any potential services to manage all types of Title 

IV student aid obligations, including, but not limited to, servicing and consolidation of 

outstanding debt. However, they are not Requirements contracts. 

2. Each contractor will provide, at a minimum, the services provided within their proposal, 

in accordance with the pricing identified in Term #3 below. 

3. The Government will set and manage the common pricing, including tier structure, 

below: 
Solicitation Number: FSA-TitleIV-09 Page 13 of 20 

Status Volume Low Volume High Unit Price 

Borrowers in In-school Status N/A N/A $ 1.050

Borrowers in Grace or Current Repayment 

Status 1 3,000,000 $ 2.110 

 3,000,001 UP $ 1.900 

Borrowers in Deferment or Forbearance 1 1,600,000 $ 2.070 

 1,600,001 UP $ 1.730 

Borrowers 31-90 Days Delinquent N/A N/A $ 1.620 

Borrowers 91-150 Days Delinquent N/A N/A $ 1.500 

Borrowers 151-270 Days Delinquent N/A N/A $ 1.370 

Borrowers 270+ Days Delinquent N/A N/A $ 0.500 

Out year pricing will follow the methodology described utilizing the subsequent terms. 

There will be no set declination in pricing at the time of award. 

4. The Government has included an escalation methodology based upon the Bureau of 

Labor Statistics’ (BLS) Employment Cost Index (ECI) for Total Compensation, Private 

Industry, Service Occupations (Not Seasonally Adjusted), to account for significant 

inflation and/or deflation. When the ECI exceeds 3.0% (plus or minus) in any given year 

the Government will adjust the established common pricing by any amount in excess of 

this rate. The calculated rate of escalation will equal the average of the 12-month percent 

change for the previous four quarters, ending June 30th. This ECI escalation will be 

applied beginning in September of the same calendar year. Further, this escalation will 

compound for all remaining years of the Base and Optional Ordering Periods. 

For example, ECI rate released in June 2010 is 3.6%. The Government will increase unit 

pricing by .6% for the contract beginning September 1, 2010 and all remaining years of 

the Base Ordering Period, as well as the Optional Ordering Period. 

A decreasing rate of inflation would follow the same pattern as above. For example, if the 

ECI decreases by more than 3.0%, then the unit prices for the remaining out-years will 

also decrease by the percentage in excess of 3.0%. For example, ECI rate released in 

June 2010 is -4.2%. The Government will decrease unit pricing by 1.2% for the contract 

period beginning September 1, 2010 and all remaining years of the Base Ordering Period, 

as well as the Optional Ordering Period. 

5. Common pricing includes all supplies, services and other costs to deliver Title IV 

servicing under this contract, including: 

• Costs for bringing contractor systems into compliance for handling federally held 

debt. 

• Costs for legislative, regulatory or policy changes that affect the FFEL community as 

a whole, as is commercially accepted practice in the FFEL community. 

• For all other costs, the Department and the contractor(s) may come to an agreement 

via change order process or negotiation, as necessary. 

6. The Government makes no guarantee to any contractor that their organization will retain 

their current loan servicing volume. In addition, the Government makes no minimum 
Solicitation Number: FSA-TitleIV-09 Page 14 of 20 

volume guarantees to any contractor. The Government does guarantee a minimum 

dollar/revenue amount of $5,000,000 over the base ordering period under this Indefinite 

Delivery, Indefinite Quantity contract, regardless of the number of loans serviced by a 

contractor. 

7. The Government reserves the right to periodically review and equitably adjust the rate 

structure to maintain effectiveness of the services provided (i.e., different volume breaks, 

different ties, cost allocations, etc) 

8. The Government reserves the right to equitably introduce, eliminate, or modify loan 

deliverables/status items that are in the best interest of the Government or Borrower. (i.e., 

in-school deferments moved into the In-School deliverable; new deferment or 

forbearance categories; etc). 

9. The Government reserves the right to unilaterally shift borrowers in the best interest of 

the Government or Borrowers, at no additional cost to the Government. It is anticipated 

that this will be done only with reasonable and prudent cause. 

10. The Government retains the unilateral right to resolve split-borrowers as deemed 

appropriate by the Government, at no additional cost to the Government. 
Solicitation Number: FSA-TitleIV-09 Page 15 of 20 

B.14 52.212-5 Contract Terms And Conditions Required To Implement Statutes Or 

Executive Orders—Commercial Items (Dec 2008) 

(a) The Contractor shall comply with the following Federal Acquisition Regulation (FAR) 

clauses, which are incorporated in this contract by reference, to implement provisions of law 

or Executive orders applicable to acquisitions of commercial items: 

(1) 52.233-3, Protest After Award (Aug 1996) (31 U.S.C. 3553). 

(2) 52.233-4, Applicable Law for Breach of Contract Claim (Oct 2004) (Pub. L. 108-77, 108-

78) 

(b) The Contractor shall comply with the FAR clauses in this paragraph (b) that the Contracting 

Officer has indicated as being incorporated in this contract by reference to implement 

provisions of law or Executive orders applicable to acquisitions of commercial items: 

_X (1) 52.203-6, Restrictions on Subcontractor Sales to the Government (Sept 2006), with 

Alternate I (Oct 1995) (41 U.S.C. 253g and 10 U.S.C. 2402). 

_X (2) 52.203-13, Contractor Code of Business Ethics and Conduct (Dec 2008) (Pub. L. 110 

252, Title VI, Chapter 1 (41 U.S.C. 251 note)). 

__ (3) 52.219-3, Notice of Total HUBZone Set-Aside (Jan 1999) (15 U.S.C. 657a). 

__ (4) 52.219-4, Notice of Price Evaluation Preference for HUBZone Small Business Concerns 

(July 2005) (if the offeror elects to waive the preference, it shall so indicate in its offer) 

(15 U.S.C. 657a). 

__ (5) [Reserved] 

__ (6)(i) 52.219-6, Notice of Total Small Business Set-Aside (June 2003) (15 U.S.C. 644). 

__ (ii) Alternate I (Oct 1995) of 52.219-6. 

__ (iii) Alternate II (Mar 2004) of 52.219-6. 

__ (7)(i) 52.219-7, Notice of Partial Small Business Set-Aside (June 2003) (15 U.S.C. 644). 

__ (ii) Alternate I (Oct 1995) of 52.219-7. 

__ (iii) Alternate II (Mar 2004) of 52.219-7. 

_X (8) 52.219-8, Utilization of Small Business Concerns (May 2004) (15 U.S.C. 637(d)(2) and 

(3)). 

_X (9)(i) 52.219-9, Small Business Subcontracting Plan (Apr 2008) (15 U.S.C. 637(d)(4)). 

__ (ii) Alternate I (Oct 2001) of 52.219-9. 

_X (iii) Alternate II (Oct 2001) of 52.219-9. 

__ (10) 52.219-14, Limitations on Subcontracting (Dec 1996) (15 U.S.C. 637(a)(14)). 

__ (11) 52.219-16, Liquidated Damages—Subcontracting Plan (Jan 1999) (15 U.S.C. 

637(d)(4)(F)(i)). 

__ (12) (i) 52.219-23, Notice of Price Evaluation Adjustment for Small Disadvantaged 

Business Concerns (Oct 2008) (10 U.S.C. 2323) (if the offeror elects to waive the 

adjustment, it shall so indicate in its offer). 

__ (ii) Alternate I (June 2003) of 52.219-23. 

__ (13) 52.219-25, Small Disadvantaged Business Participation Program—Disadvantaged Status 

and Reporting (Apr 2008) (Pub. L. 103-355, section 7102, and 10 U.S.C. 2323). 

__ (14) 52.219-26, Small Disadvantaged Business Participation Program— Incentive 

Subcontracting (Oct 2000) (Pub. L. 103-355, section 7102, and 10 U.S.C. 2323). 

__ (15) 52.219-27, Notice of Total Service-Disabled Veteran-Owned Small Business Set-Aside 

(May 2004) (15 U.S.C. 657 f). 
Solicitation Number: FSA-TitleIV-09 Page 16 of 20 

__ (16) 52.219-28, Post Award Small Business Program Rerepresentation (June 2007) (15 

U.S.C. 632(a)(2)). 

_X (17) 52.222-3, Convict Labor (June 2003) (E.O. 11755). 

_X (18) 52.222-19, Child Labor—Cooperation with Authorities and Remedies (Feb 2008) (E.O. 

13126). 

_X (19) 52.222-21, Prohibition of Segregated Facilities (Feb 1999). 

_X (20) 52.222-26, Equal Opportunity (Mar 2007) (E.O. 11246). 

_X (21) 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam 

Era, and Other Eligible Veterans (Sept 2006) (38 U.S.C. 4212). 

_X (22) 52.222-36, Affirmative Action for Workers with Disabilities (Jun 1998) (29 U.S.C. 

793). 

_X (23) 52.222-37, Employment Reports on Special Disabled Veterans, Veterans of the Vietnam 

Era, and Other Eligible Veterans (Sept 2006) (38 U.S.C. 4212). 

_X (24) 52.222-39, Notification of Employee Rights Concerning Payment of Union Dues or 

Fees (Dec 2004) (E.O. 13201). 

_X (25) (i) 52.222-50, Combating Trafficking in Persons (Aug 2007) (Applies to all contracts). 

__ (ii) Alternate I (Aug 2007) of 52.222-50. 

__ (26) (i) 52.223-9, Estimate of Percentage of Recovered Material Content for EPADesignated Items (May 2008) (42 U.S.C. 6962(c)(3)(A)(ii)). 

__ (ii) Alternate I (May 2008) of 52.223-9 (42 U.S.C. 6962(i)(2)(C)). 

__ (27) 52.223-15, Energy Efficiency in Energy-Consuming Products (Dec 2007) (42 U.S.C. 

8259b). 

__ (28) (i) 52.223-16, IEEE 1680 Standard for the Environmental Assessment of Personal 

Computer Products (Dec 2007) (E.O. 13423). 

__ (ii) Alternate I (Dec 2007) of 52.223-16. 

__ (29) 52.225-1, Buy American Act—Supplies (June 2003) (41 U.S.C. 10a-10d). 

__ (30) (i) 52.225-3, Buy American Act—Free Trade Agreements—Israeli Trade Act (Aug 

2007) (41 U.S.C. 10a-10d, 19 U.S.C. 3301 note, 19 U.S.C. 2112 note, Pub. L 108-

77, 108-78, 108-286, 109-53 and 109-169). 

__ (ii) Alternate I (Jan 2004) of 52.225-3. 

__ (iii) Alternate II (Jan 2004) of 52.225-3. 

__ (31) 52.225-5, Trade Agreements (Nov 2007) (19 U.S.C. 2501, et seq., 19 U.S.C. 3301 note). 

_X (32) 52.225-13, Restrictions on Certain Foreign Purchases (June 2008) (E.O.’s, 

proclamations, and statutes administered by the Office of Foreign Assets Control of the 

Department of the Treasury). 

__ (33) 52.226-4, Notice of Disaster or Emergency Area Set-Aside (Nov 2007) (42 U.S.C. 

5150). 

__ (34) 52.226-5, Restrictions on Subcontracting Outside Disaster or Emergency Area (Nov 

2007) (42 U.S.C. 5150). 

__ (35) 52.232-29, Terms for Financing of Purchases of Commercial Items (Feb 2002) (41 

U.S.C. 255(f), 10 U.S.C. 2307(f)). 

__ (36) 52.232-30, Installment Payments for Commercial Items (Oct 1995) (41 U.S.C. 255(f), 

10 U.S.C. 2307(f)). 

_X (37) 52.232-33, Payment by Electronic Funds Transfer—Central Contractor Registration 

(Oct 2003) (31 U.S.C. 3332). 
Solicitation Number: FSA-TitleIV-09 Page 17 of 20 

__ (38) 52.232-34, Payment by Electronic Funds Transfer—Other than Central Contractor 

Registration (May 1999) (31 U.S.C. 3332). 

__ (39) 52.232-36, Payment by Third Party (May 1999) (31 U.S.C. 3332). 

_X (40) 52.239-1, Privacy or Security Safeguards (Aug 1996) (5 U.S.C. 552a). 

__ (41) (i) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (Feb 

2006) (46 U.S.C. Appx. 1241(b) and 10 U.S.C. 2631). 

__ (ii) Alternate I (Apr 2003) of 52.247-64. 

(c) The Contractor shall comply with the FAR clauses in this paragraph (c), applicable to 

commercial services, that the Contracting Officer has indicated as being incorporated in this 

contract by reference to implement provisions of law or Executive orders applicable to 

acquisitions of commercial items: 

_X (1) 52.222-41, Service Contract Act of 1965 (Nov 2007) (41 U.S.C. 351, et seq.). 

_X (2) 52.222-42, Statement of Equivalent Rates for Federal Hires (May 1989) (29 U.S.C. 206 

and 41 U.S.C. 351, et seq.). 

_X (3) 52.222-43, Fair Labor Standards Act and Service Contract Act—Price Adjustment 

(Multiple Year and Option Contracts) (Nov 2006) (29 U.S.C. 206 and 41 U.S.C. 351, et 

seq.). 

__ (4) 52.222-44, Fair Labor Standards Act and Service Contract Act—Price Adjustment (Feb 

2002) (29 U.S.C. 206 and 41 U.S.C. 351, et seq.). 

__ (5) 52.222-51, Exemption from Application of the Service Contract Act to Contracts for 

Maintenance, Calibration, or Repair of Certain Equipment—Requirements (Nov 2007) 

(41 U.S.C. 351, et seq.). 

__ (6) 52.222-53, Exemption from Application of the Service Contract Act to Contracts for 

Certain Services—Requirements (Nov 2007) (41 U.S.C. 351, et seq.). 

__ (7) 52.237-11, Accepting and Dispensing of $1 Coin (Sept 2008) (31 U.S.C. 5112(p)(1)). 

(d) Comptroller General Examination of Record. The Contractor shall comply with the 

provisions of this paragraph (d) if this contract was awarded using other than sealed bid, is in 

excess of the simplified acquisition threshold, and does not contain the clause at 52.215-2, 

Audit and Records—Negotiation. 

(1) The Comptroller General of the United States, or an authorized representative of the 

Comptroller General, shall have access to and right to examine any of the Contractor’s 

directly pertinent records involving transactions related to this contract. 

(2) The Contractor shall make available at its offices at all reasonable times the records, 

materials, and other evidence for examination, audit, or reproduction, until 3 years after 

final payment under this contract or for any shorter period specified in FAR Subpart 4.7, 

Contractor Records Retention, of the other clauses of this contract. If this contract is 

completely or partially terminated, the records relating to the work terminated shall be 

made available for 3 years after any resulting final termination settlement. Records 

relating to appeals under the disputes clause or to litigation or the settlement of claims 

arising under or relating to this contract shall be made available until such appeals, 

litigation, or claims are finally resolved. 

(3) As used in this clause, records include books, documents, accounting procedures and 

practices, and other data, regardless of type and regardless of form. This does not require 
Solicitation Number: FSA-TitleIV-09 Page 18 of 20 

the Contractor to create or maintain any record that the Contractor does not maintain in 

the ordinary course of business or pursuant to a provision of law. 

(e) (1) Notwithstanding the requirements of the clauses in paragraphs (a), (b), (c), and (d) of this 

clause, the Contractor is not required to flow down any FAR clause, other than those in 

paragraphs (e)(1)(i) through (xi) of this paragraph in a subcontract for commercial items. 

Unless otherwise indicated below, the extent of the flow down shall be as required by the 

clause— 

(i) 52.203-13, Contractor Code of Business Ethics and Conduct (Dec 2008) (Pub. L. 

110-252, Title VI, Chapter 1 (41 U.S.C. 251 note)). 

(ii) 52.219-8, Utilization of Small Business Concerns (May 2004) (15 U.S.C. 637(d)(2) 

and (3)), in all subcontracts that offer further subcontracting opportunities. If the 

subcontract (except subcontracts to small business concerns) exceeds $550,000 

($1,000,000 for construction of any public facility), the subcontractor must include 

52.219-8 in lower tier subcontracts that offer subcontracting opportunities. 

(iii) 52.222-26, Equal Opportunity (Mar 2007) (E.O. 11246). 

(iv) 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the 

Vietnam Era, and Other Eligible Veterans (Sept 2006) (38 U.S.C. 4212). 

(v) 52.222-36, Affirmative Action for Workers with Disabilities (June 1998) (29 

U.S.C. 793). 

(vi) 52.222-39, Notification of Employee Rights Concerning Payment of Union Dues 

or Fees (Dec 2004) (E.O. 13201). 

(vii) 52.222-41, Service Contract Act of 1965 (Nov 2007) (41 U.S.C. 351, et seq.). 

(viii) 52.222-50, Combating Trafficking in Persons (Aug 2007) (22 U.S.C. 7104(g)). 

Flow down required in accordance with paragraph (f) of FAR clause 52.222-50. 

(ix) 52.222-51, Exemption from Application of the Service Contract Act to Contracts 

for Maintenance, Calibration, or Repair of Certain Equipment-Requirements (Nov 

2007) (41 U.S.C. 351, et seq.). 

(x) 52.222-53, Exemption from Application of the Service Contract Act to Contracts 

for Certain Services-Requirements (Nov 2007) (41 U.S.C. 351, et seq.). 

(xi) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (Feb 

2006) (46 U.S.C. Appx. 1241(b) and 10 U.S.C. 2631). Flow down required in 

accordance with paragraph (d) of FAR clause 52.247-64. 

(2) While not required, the contractor may include in its subcontracts for commercial items a 

minimal number of additional clauses necessary to satisfy its contractual obligations. 
Solicitation Number: FSA-TitleIV-09 Page 19 of 20 

 C. STATEMENT OF OBJECTIVES (SOO) 

C.1 General Description Of Scope/Purpose 

C.1.1 Federal Student Aid Background/Overview 

Federal Student Aid (FSA), an office of the Department, plays a central and essential role 

in America's postsecondary education community. 

FSA's core mission is to ensure that all eligible individuals benefit from federal financial 

assistance—grants, loans and work-study programs—for education beyond high school. 

The programs FSA administers comprises the nation's largest source of student aid: 

during the 2007-08 school year alone, FSA provided approximately $83 billion in new 

aid to nearly 10 million postsecondary students and their families. FSA’s staff of 1,100 is 

based in 10 cities, in addition to its Washington, D.C. headquarters. 

C.1.2 Current Need 

With the current economic and liquidity uncertainty facing financial markets, many 

student loan lenders are dropping out of the market. With more than $65 billion in 2008-

09 loans and approximately $130 billion in eligible 2003-07 student loans on bank 

balance sheets and auction rate securitizations, the capital markets are currently unable to 

generate adequate funds at prices that will ensure 2009-10 loans can be made. 

Recent legislation including the College Cost Reduction Authorization Act of 2008 

(CCRAA) (Pub. Law 110-84) and the Ensuring Continued Access to Student Loans Act 

of 2008 (ECASLA) (Pub. Law 110-227) enabled the Department to accept former 

Federal Family Education Loan Program (FFELP) loans in the form of additional Direct 

Loan (DL) capacity, and to purchase FFELP loans as far back as 2003, in an effort to 

bring liquidity and stability back to the student loan market. 

With the sudden increase in current and potential loan volume that the Department will 

be responsible for servicing, the need for increasing the Title IV student aid servicing 

vehicles is determined appropriate at this time. 

C.1.3 Objective 

Acquire efficient and effective commercial contract services to manage all types of Title 

IV student aid obligations, including, but not limited to, servicing and consolidation of 

outstanding debt. 

C.1.4 Constraints 

C.1.4.1 Specific compliance activities for servicing Federally held assets include, 

but are not limited to, Attachments A-1 through A-3 provided herein. 

C.1.4.2 In order to manage the costs associated with such a potentially large 

portfolio, the service must provide innovative measures to ensure portfolio 

growth is not the key driver of total cost. Contractor incentives must be 

based on performing assets, rather than transaction or activity based 

delinquency incentives. Costs may also be managed through redistribution 

of customers to self-service options, as approved by the Government. 

Performance measures will help ensure that the complete service operates 

as efficiently and effectively as possible and that it is achieving the desired 
Solicitation Number: FSA-TitleIV-09 Page 20 of 20 

business outcomes. These measurements will be flexible to allow for 

regular reviews and revisions as necessary.

C.1.4.3 The contractor(s) will be responsible for maintaining a full understanding 

of all federal and state laws and regulations and FSA requirements and 

ensuring that all aspects of the service continue to remain in compliance as 

changes occur.

C.1.4.4 The contractor(s) will provide a service flexible enough to handle new 

requirements generated by Congress and respond to legislative mandates 

and policy changes. Please see Appendix A – Standards and Relevant 

Documents for historical and current representative information. 

C.1.4.5 The contractor(s) will provide timely (as defined by FSA and contractor) 

responses to Office of Inspector General (OIG), General Accounting 

Office (GAO), budget, data, and management requests. 

C.1.4.6 It is understood and mutually agreed that the Department of Education 

has exclusive ownership of all information stored in, retrieved, modified, 

and/or archived in as part of this service. The contractor shall have no 

rights in such information and no rights to such information shall vest on 

the contractor by virtue of its performance of this contract. No other party 

has the right to copy, delete, archive, or transfer such information without 

the prior express written consent of the Department of Education. The 

contractor shall not use such information for any marketing or solicitation 

purpose including, but not limited to, commercial advertising, credit 

offers, or similar campaigns. 

C.2 Attachments/Supplemental Documents 

Number Title 

A-1 Additional Servicer—Initial Requirements Document (Version 21.0) 

A-2 Additional Servicer—Intermediate Requirements Document (Version 

6.0) 

A-3 Additional Servicer—Full Requirements Document (Version 6.0) 

A-4 Ongoing Allocation Methodology 

A-5 Sample—Ongoing Allocation Metric Calculation 

A-6 Servicing Pricing Definitions (Version 9.0) 
Attachment A-1 

All_InitialReq_v21.0 1

Additional

Servicer

INITIAL Requirements

All_InitialReq_v21.0.doc
Attachment A-1 

All_InitialReq_v21.0 2

Additional Servicer – Initial Requirements

Required by 8/31/09 unless otherwise noted 

TABLE OF CONTENTS

General Statement ................................................................................................................. 3

Financial Reporting ................................................................................................................ 3

Treasury ...................................................................................................................................... 5

Transaction Management .................................................................................................... 6

Internal Controls ...................................................................................................................... 7

Accounting ................................................................................................................................. 9

Reconciliations ......................................................................................................................... 9

Additional Reporting ............................................................................................................ 12

Security ...................................................................................................................................... 12

NSLDS ....................................................................................................................................... 13

Unique Client/Lender Requirements for Federally Serviced Portfolio ........... 14

Loan Conversion ................................................................................................................... 16
Attachment A-1 

All_InitialReq_v21.0 3

General Statement 

It is the intent of the Department to procure a performance-based contract(s) that 

promotes competition and provides best of business services. To achieve this goal, the 

Department expects each servicer to provide commercially available services that will 

yield high performing portfolios and high levels of customer satisfaction. The following 

statements apply: 

- Servicers will be required to meet all statutory and legislative requirements. 

- Servicers will use their own discretion in deciding to provide services or business 

functionality that is recommended but not required. 

- Servicers may leverage all borrower repayment channels while maintaining existing 

branding provided all federally held loans are clearly distinguished and identified, 

and borrowers are directed to make payment directly to the Department via a U.S. 

Treasury lockbox or electronic payment service. 

- Small differences due to rounding in various calculations are understood and 

accepted providing the calculation itself is in compliance with federal regulation. 

- The Department will allocate volume based on defined and understood performance 

metrics. 

- The Department does not intend to provide additional service level requirements. 

The Department does, however, expect best of business practices to be deployed. 

- The Department will not require the use of the Department or FSA logo on letters, 

web sites, etc. 

- Servicers will have full discretion to promote or not promote services as long as they 

meet legislative and regulatory requirements and are cost neutral to the 

Government. 

- Servicers will have discretion to provide services to schools. 

- Servicers may use their own authentication process as long as the process is fully 

compliant with federal IT security guidelines. 

- With regard to split borrowers, it is acceptable for servicers to handle requests, 

phone calls, etc. for all loans being serviced by that servicer, regardless of the holder 

(Federal or Non-Federal), as long as all federal laws and regulations are met.

Financial Reporting 

1. The servicer shall uniquely identify each specific activity (e.g., Collection of Principal, 

Collection of Interest, etc.) in the transaction level data. 

2. The servicer shall provide required accounting reports. A preliminary list is presented 

below. 

a) Trial Balance by Fund & a Working Trial Balance By Fund 

b) Detailed Trial Balance by Transaction Type 

c) Sub ledger Reconciliation Reports 

d) Transaction Tables and mapping (Crosswalk) to the Department’s general ledger 

system, the Financial Management System (FMS), including transaction 

descriptions and amount fields. 

e) Cash Receipt Detail 

f) Cash Disbursement Detail 

g) Report of Debts Assigned by Assignor (Lender, GA, Intra-Fund Transfers) 
Attachment A-1 

All_InitialReq_v21.0 4

h) Report of Loans Consolidated (by Fund, Cohort Year, Loan Program Type, Risk 

Category) 

i) Report of Loans Rehabilitated (if applicable) 

j) Loan portfolio performance reports (by Fund, Loan Type, cohort year and risk 

category). 

k) Collection Activity Report - The report summarizes by Current Month, Current 

Quarter, and Year to Date for each Loan Type, the number of loans and the 

amount of loans for each delinquency stage. 

l) Loans Transferred to and from the Department’s Default Management Collection 

System (DMCS)- The report has 3 parts: 

a. Loans Transferred to DMCS - Displays by transfer date the total 

number of borrowers, total number of loans, total principal balance 

at time of transfer, and date DMCS accepts the loans for each 

weekly transmission to DMCS. 

b. Rejected and Re-transfer to DMCS - Displays by re-transfer date 

the total number of loans, total number of borrowers, total principal 

balance, and date DMCS accepts the loans for each weekly 

transmission to DMCS. 

c. Transfers by Loan Type - Displays by transfer date, total number of 

borrowers, and total number of PLUS, Stafford, and Consolidation. 

m) DMCS Recall and Rehabilitation Tracking Report - The report displays by 

month/year the total number of borrowers recalled from DMCS, total number of 

loans recalled, total number of Rehabilitated loans and borrowers received from 

DMCS. 

n) System Balancing Reporting of daily, weekly and monthly activity sent and 

received with each interfacing partner at the Batch level and at the Transaction 

Type, Transaction Count, Transaction Amount levels. Reports activity sent and 

activity received; and balances activity received to activity accepted and rejected. 

o) Financial Transactions Reconciliation Report of all daily, weekly and monthly 

transactions posted on the servicing system for each interfacing partner. 

Displays summary data by financial transaction type, number, and dollar 

amounts. 

p) Work in Process Reports of activity received and accepted into the servicing 

system, but not posted to borrower accounts for each interfacing partner. 

Displays detail level transactions at the loan level for all financial transactions 

received but not posted. Includes applicable dollar amounts and reflects aging of 

each transaction. Reporting can include, but is not limited to, pending 

disbursements, loan adjustments, consolidation payoffs, etc. (See below for 

specific unapplied cash reporting). Daily cumulative reporting with the last daily 

report for the month reflecting the WIP balances as of month end. 

q) Unapplied Cash Payment Recycle report: Payment and Payment adjustment 

activity received and accepted into the servicing system but not posted to 

borrower accounts. Reporting is by payment source (including, but not limited 

to: lockbox, electronic debit, IPAC, etc.) Displays detail level cash payment and 

payment return/adjustment transactions at the borrower level and includes 
Attachment A-1 

All_InitialReq_v21.0 5

Treasury document information (schedule number, schedule amount and 

schedule type) and aging of each transaction. Daily cumulative reporting with the 

last daily report for the month reflecting the WIP balances as of month end. 

r) Ad-hoc reporting capability and access for the Department (see 

“Reconciliations”). 

Treasury 

3. The servicer shall require entities making payments on Government loans 

(borrowers, lenders, etc) to direct payments to a Treasury designated service 

including: 

a) Treasury lockbox 

b) Pay.gov 

c) Remittance Express 

d) IPAC. 

Note: Receipts must be processed in accordance with guidance provided in 

Treasury Financial Management (TFM), available at 

www.fms.treas.gov/tfm/index.htm

4. The servicer shall establish an interface with the Treasury lockbox service for the 

receipt of payment posting file and returned payments files. 

5. The servicer shall establish an interface with Pay.gov for the receipt of ACH debits 

and credit card payments. 

6. The servicer shall establish an interface for Remittance Express (REX) to support 

receipt of ACH credits. REX provides FSA and the servicer with download capability 

of an activity file with optional fields for identifying borrower accounts. 

7. The servicer shall establish an interface for the receipt and processing of InterGovernmental Payment and Collection (IPAC) systems payments. IPAC provides 

FSA and the servicer with download capability of an activity file with optional fields 

for identifying borrower accounts. 

8. The servicer shall post payments to the borrower accounts on the same date of 

receipt of payment information from Treasury. If the servicer directly receives 

payments, those payments will be deposited to Treasury on the day of receipt. 

9. The servicer shall maintain a recycle or unapplied file of any payment/payment 

return transactions that cannot be posted to a borrower account. The servicer shall 

perform due diligence to research payments held in suspense for the purpose of 

resolving the unposted items including: posting payment to appropriate borrower 

account; refunding to remitter; or escheatment to Treasury. 

10. The servicer shall obtain daily deposit information from Treasury's Ca$hLinkII 

system to support accounting processes and controls, such as daily and monthly 

reconciliations. 

11. The servicer shall maintain proper controls over payment posting and accounting 

activities, and perform daily and monthly required reconciliations. 

12. Issuance of Refunds - The servicer shall promptly manage credit balance accounts, 

and other payments and accounts requiring a refund. The Servicer shall process 

refund transactions to borrowers (borrower overpayments), lenders (such as 

consolidation overpayments), etc. 
Attachment A-1 

All_InitialReq_v21.0 6

a) The servicer shall establish an interface and process payments refunds via 

interface via interface with FSA's Financial Management System (FMS) using the 

FMS standard file format (see FMS Attachment A). 

b) Batches of refunds shall be subject to FSA review and approval. 

c) The servicer shall receive and work from a Treasury Confirmation Report 

available through Treasury's Government-Wide Accounting System (GWA). This 

confirmation data will be used to provide information to borrower inquiries on 

refund status. The GWA report confirms the completion of processing on a 

batch, and provides the first and last check number for the batch. 

d) The servicer shall receive a report of Treasury Cancellations, maintain 

cancellation data, and shall provide information for borrower inquiries and 

support re-issuance of refunds. 

e) The servicer shall perform due diligence on cancelled refunds, on issuance of 

validated refunds, and will follow Treasury guidelines for escheatment. 

f) The servicer shall request FSA to cancel refunds, when appropriate. 

g) The servicer shall use FSA's student application internet gateway (SAIG) to 

transmit refund requests to FMS. 

h) The servicer shall pass Treasury cancellation data to FMS using the FMS 

standard file format (see FMS Attachment A). 

Transaction Management

13. The servicer shall establish a system and processes to correctly record all 

transactions on their database and to post summary transactions to the FSA’s 

general ledger (FMS) on the same business day they are generated. 

14. All servicer transactions shall include all fields as required by FMS and all amounts 

applicable to each transaction type. 

15. All servicer transactions must pass all FMS edits for posting into the general ledger. 

16. The servicer shall ensure all transactions are reversible. 

17. The servicer shall provide unique transaction reporting for each type of loan activity. 

18. All servicer transactions will be accurately translated (mapped) from the Servicer's 

subsidiary ledger to FSA's general ledger (FMS). 

19. The servicer shall maintain both the posting date and effective date of the 

transactions on their system. 

20. The servicer shall provide an audit trail that efficiently links their detailed transactions 

in the subsidiary ledger to summarized transactions in FSA's general ledger. 

Transactions must have sufficient audit trail to support efficient tracing. 

21. The servicer shall include original Treasury document numbers on applicable 

transactions, in addition to any system created document numbers (including but not 

limited to: SF215, SF5515, SF1166, SF1098, and SF1081). The usage of Treasury 

documents is described on the web site http://fms.treas.gov/index.html. 

22. The servicer shall assign and retain the Credit Reform Code (CRC), recording and 

reporting on all loan related transactions at the CRC level. Federal Credit Reform 

Act legislation and Treasury guidelines for reporting are described on the web site 

http://fms.treas.gov/index.html. Appendix A (CRC Codes) of Attachment C (FMS File 

Layouts) describes how CRC codes are generated. 
Attachment A-1 

All_InitialReq_v21.0 7

Internal Controls

23. The servicer shall incorporate a system of internal controls consistent with federal 

laws, regulations, policies and authoritative guidance. These laws, regulations, and 

guidances include, but are not limited to: Federal Financial Management 

Improvement Act (FFMIA); Federal Managers' Financial Integrity Act (FMFIA); CFO 

Act; Government Performance and Results Act (GPRA); GAO's Green Book; OMB 

Circulars A-123, 1-127, and A-130; Joint Financial Management Improvement 

Program (JFMIP); and Treasury Financial Manual (TFM). 

24. The servicer's procedures and systems shall include a system of internal controls 

that ensures resource use is consistent with laws, regulations and policies; 

resources are safeguarded against waste, loss, and misuse; and reliable data are 

obtained, maintained, and disclosed in reports. Appropriate internal controls shall be 

applied to all system inputs, processing and outputs. 

Examples of Internal Control Standards to be implemented by the servicer include 

the following: 

a) Review and Reconciliation: Records are examined and reconciled to determine 

that transactions were properly processed and approved. 

b) Execution of Transactions: Independent evidence is required to be maintained to 

ensure that authorizations are issued by persons acting within the scope of their 

authority and transactions conform with such authority. 

c) Segregation of Duties: Proper segregation of duties is required to exist among 

functions including: authorization, execution, recording and reviewing 

transactions, custody of assets, and performing reconciliations. 

d) Qualified and continuous supervision is required to be provided to ensure that 

proper internal control is maintained. 

e) Access to and Accountability for Resources: Access to resources and custody 

and use of resources is required to be assigned and maintained. 

25. The servicer shall provide FSA with supporting documentation for FSA's OMB 

Circular A-123 annual review, the annual Financial Statement Audit, and other audits 

and reviews (as further described in the Requirement #29 below on Audit Support 

Services and in Audit Attachment A, “Audit Support Requirements”). 

26. The servicer shall consult with FSA during FSA's OMB Circular A-123 annual review 

process and for other audits, so that FSA can: (a) maintain its understanding of the 

servicers controls (in the context of GAO Internal Control Standards and the 

Committee on Sponsoring Organizations (COSO) control framework), (b) maintain 

FSA documentation depicting the servicer's controls and process flows (as further 

described in Requirement #29 below on Audit Support Services and in the 

attachment, "Audit Support Requirements"), and (c ) maintain FSA's test plan, which 

will call for the provision of supporting materials from the servicer. 

27. The servicer shall be responsible for resolving all deficiencies identified during audits 

and participating in corrective action plans as needed. 

28. The servicer shall provide FSA with support for conducting FSA site visits to servicer 

centers of operation. The purpose of the site visits will be to enable and enhance 

FSA's plans for the conduct of its A-123 review. In addition, during the site visit, FSA 
Attachment A-1 

All_InitialReq_v21.0 8

will observe the execution of selected processes for compliance with stated 

procedures and system function.

29. The servicer shall provide Audit Support Services, upon request, including but not 

limited to the following audits and reviews. The “Audit Support Requirements” 

document attached provides additional information on the annual Financial 

Statement Audit and describes the “Prepared by client” (or PBC) process that will be 

used by the auditor and/or FSA to submit requests for documentation, data, and/or 

walkthroughs and for the servicer to fulfill these requests.:

a) FSA’s annual Financial Statement audits; 

b) Assessments of internal controls in accordance with FMFIA and OMB Circular A123, Appendix A; 

c) Program-specific financial and compliance audits conducted by GAO, OIG, 

and/or OMB; 

d) FISMA audits; 

e) Certification and Accreditation reviews; 

f) Internal reviews; 

g) Contract oversight activities; and 

h) Agreed Upon Procedures Audits for Loan Purchase Programs. 

This support generally includes, but is not limited to: making resources and facilities 

available, participating in audit planning (such as to determine when resources would be 

made available and for what purpose), responding to “prepared-by-client” (PBC) 

requests, reporting status, and remediating deficiencies identified. At a minimum, PBC 

requests will include: interviews, access to process and system documentation, standard 

and ad hoc queries and reports, and general questions on processes, systems, data, 

and/or other matters. 

30. The servicer shall meet requirements for a Type II SAS 70 audit. It is anticipated that 

performance of the Type II SAS 70 audit with an unqualified opinion and submission 

of the resulting work papers will eliminate or substantially reduce audit work 

performed by various auditors, internal and external to the Department, as part of 

the Department-wide and Government-wide annual audits. As part of their contracts 

with various lenders, servicers also normally have a SAS 70 audit performed 

annually by a qualified independent auditor. 

a) For IT controls, the servicer shall supplement the Type II SAS 70 with 

additional agreed-upon procedures resulting in an audit consistent with 

GAO’s Federal Information System Control Audit Manual (FISCAM). The 

results of these procedures should be conducted and reported at least 

annually, with a year-end of 6/30. Further, the servicer shall provide FSA 

with a “bridge letter” covering the period from 6/30 to 9/30 indicating no 

changes to the control environment. 

b) For operational controls, the servicer shall ensure that the Type II SAS 70 

covers all GAO Internal Control Standards or COSO Components (e.g., 

control environment, risk assessment, control activities, information and 

communication, and monitoring) for those transactions processed by the 

servicer. The results of these procedures should be conducted and 

reported at least semi-annually covering the periods 1/1 – 6/30 and 7/1 – 

12/31. 
Attachment A-1 

All_InitialReq_v21.0 9

Accounting 

31. The servicer shall create a financial interface between the FSA servicer and FSA 

Financial Management System (FMS) to provide financial data to FMS on a daily, 

weekly and monthly basis. 

a) The data and data layouts to be provided within this interface are described in 

the FMS Attachment C – FMS File Layouts 

b) Submission / send rules for these transmissions are: 

1. In addition to daily transaction files, servicer shall send weekly (summary) and 

monthly (interest and adjustment) files to FMS. 

2. Servicer shall use secure FSA’s SAIG mailbox to place daily, weekly and 

monthly files on the FMS server for processing in FMS. 

32. The servicer shall conduct accountancy, ensuring that transactions of the servicer’s 

subsidiary ledger are accurately recorded in the FMS general ledger, to include: 

a) Managing the accounting transaction processing between the subsidiary ledger 

and the general ledger. 

b) Preparing procedural instructions and execution of manual procedures related to 

the preparation of accounting transactions. 

c) Reconciling cash, accounts receivable, accounts payable, and other general 

ledger accounts. 

d) Correcting all differences between the subsidiary ledger balances and the control 

account balances in the general ledger. 

e) Assisting FSA, FMS, and CFO in posting financial data and recommending 

alternatives to resolve rejected activity and variances. 

Reconciliations 

33. The servicer shall perform reconciliations of balances and activity as requested, that 

meet the following general requirements: 

a) Reconciliation activity should demonstrate that all required data is transmitted to 

the Department and that all omissions, duplications of data, and recording errors 

are detected and corrected timely. 

b) All reconciliations and financial accounting will be inclusive of principal, interest 

and fee amounts. 

c) Monthly reconciliation between Servicing Trial Balance by Portfolio and FSA’s 

general ledger (FMS) trial balance for each individual balance sheet account 

(balances and activity). 

d) All programs are to be accounted, reported and reconciled individually (distinct 

portfolios). 

e) Portfolio balances must be supportable at the loan level. 

f) Unless otherwise instructed, all reconciliation processes must identify and define 

specific transactions causing differences. 

g) Unless otherwise instructed, all requirements apply to each portfolio. 

h) Monthly reconciliations are due to FSA by the 8th calendar day of the subsequent 

month. (e.g. Reconciliations for the month of June are due July 8th.) 

i) Monthly reconciliations require contractor review by at least one level of 

management. 
Attachment A-1 

All_InitialReq_v21.0 10

j) Monthly reconciliations require the signature of the preparer and reviewer and 

the date of signatures. 

k) Signed monthly reconciliations and all necessary supporting documentation are 

to be provided to FSA in Adobe .pdf format. 

l) The servicer shall provide reports in the file format requested by FSA. File format 

types would include, but are not limited to: the Microsoft Office Professional Suite 

(Excel, Word, Access, etc.), Adobe (.pdf), text (.txt), comma delimited (.csv) etc. 

m) Daily reconciliations are not standard deliverables to FSA but are considered 

operational processes and subject to internal control testing. 

n) Unless otherwise instructed, all reconciling items arising from monthly 

reconciliations are to be researched and cleared within the month subsequent to 

the reconciled period. For example, reconciling items for the month of June must 

be cleared within July. This eliminates repeat reconciling items. 

o) Unless otherwise instructed, all reconciling items arising from daily reconciliations 

are to be researched and cleared within 48 hours. 

p) Daily reconciliations include tracking and resolution of all work in process activity. 

34. The servicer shall reconcile loan sales as follows: 

a) Perform daily 3-way reconciliation between invoice (pre-sale report), Bill of Sale 

from selling lender, and conversion reports from servicing system. Offeror must 

be able to produce the reconciliation at the deal, invoice, lender and summary 

level. 

b) Perform daily and monthly over/underpayment reconciliation between the Selling 

lender, servicing system, FMS and Treasury. 

c) Maintain resulting accounts receivable/accounts payable reconciliation of 

over/underpayment activity between the Selling lender & FMS. To include: 

1. Maintain balance of receivables from sellers and payables to 

sellers. 

2. Invoice sellers for accounts receivables. 

3. Process FMS accounts payable refund request to sellers (see 

Refund Reconciliations for specific requirements). 

4. Process overpayment refund collections from Selling lenders. 

5. Maintain clear audit trail of overpayment refund transactions 

processed to Treasury deposits. 

d) Daily reconciliation to assure that the FMS net funding transactions purchasing 

loans equal the net loans accepted and either posted or pending posting 

(traceable in work in process files) to the servicing system by the next day. 

e) Daily reconciliation of activity sent from sellers to accepted and either posted or 

pending posting (traceable in work in process files) on the servicing system. 

35. The servicer shall reconcile transfers as follows: 

a) Servicer will provide for loan exchange and reconciliations between servicing 

system and FSA servicing systems. Servicer will maintain portfolio integrity upon 

re-entry into the servicing system. 

b) Perform daily reconciliation on transfers of loans between the Servicing system 

and each FSA servicing system. 
Attachment A-1 

All_InitialReq_v21.0 11

c) Perform monthly reconciliation of transfers of loans between the servicing system 

and each FSA servicing system. 

36. The servicer shall reconcile cash collections as follows: 

NOTE: The terms “recycle file”, “suspense account” and “unapplied file” are 

defined as the transactional level cash payments and payment adjustments 

received but not posted to borrower accounts on the servicing system. 

a) Record all incoming check & electronic collections received (deposits) to the 

cash clearing account (level 1); reverse collection transactions from cash clearing 

account when posted to borrower accounts (level 2). 

b) The application process for postable cash payments and payment returns must 

be completed within 48 hours of collection receipt. 

c) Reconcile all cash activity to Treasury daily. This includes, but is not limited to: 

electronic funds transfer (EFT), checks (SF 1166), Intra-governmental Payment 

and Collection (IPAC) System/SF 1081 payments, internal electronic cash 

transactions, and any other payments to or deposits with Treasury. 

d) Perform daily collection reconciliation among the various Treasury receipt 

channels (i.e. Lockbox, Pay.gov, Remittance Express, and IPAC), servicing 

system and FMS general ledger. Collection transactions are to be posted to FMS 

daily. 

e) Daily reconciliation to ensure Total Cash Received (check and electronic) = 

(Total Cash Payments Posted to Borrower’s accounts + New Recycle File Items). 

f) Daily reconciliation to ensure Outstanding Recycle File Balance = Beginning 

Recycle File Balance + New Recycle File Items - Recycle File Items Posted to 

Borrower Accts - Refunds of Misdirected Payments - Treasury Escheatment. 

g) Monthly reconciliation of the Servicer’s unapplied cash payment recycle file 

balance at the servicing system to the FMS Unapplied Collections general ledger 

account. 

h) Monthly reconciliation of Treasury bank statement to FMS and Treasury. 

37. The servicer shall reconcile refunds as follows: 

a) Maintain daily and monthly three-way reconciliation of refund activity among the 

servicing system, FMS accounts payable system and Treasury. 

1. Process overpayment refunds, refund cancellations, and stop payments 

posted to borrower accounts. 

2. Refund transactions processed on the servicing system for misdirected 

payments. 

3. Track and reconcile refund transactions to refund requests (FMS accounts 

payables) to Treasury confirmations. 

4. Track and reconcile refund cancellation transactions processed on servicing 

to refund reversals in FMS to Treasury cancellations. 

38. The servicer shall provide ad hoc reporting tools to support reconciliations: 

Servicing Trial Balance by Portfolio – using FSA/FMS transactional account 

mapping, must be capable of producing daily, weekly, ad hoc, and monthly trial 

balances at a summary and detailed transactional. If multiple databases are 

employed each database will be reported individually as well as on a consolidated 

basis. 
Attachment A-1 

All_InitialReq_v21.0 12

39. The servicer shall perform daily, weekly and monthly system balancing of all data 

transmitted to and from the servicing system. 

a) Balancing will be done at the transaction type, transaction count and 

transaction amount(s) levels. 

b) Balancing will ensure data sent = data received; and data received will = 

the sum of data accepted and rejected. 

c) Rejected data will be researched, resolved/resent by the originating 

system. 

Additional Reporting 

40. The servicer shall provide a data file (daily for the previous day’s activity, monthly for 

previous month's activity) to FSA containing standard data elements needed for 

additional financial and portfolio analysis. FSA will determine the type of file, 

transfer specifications, and specific data elements to be included in the file. 

41. The Servicer shall ensure that the balances reported to FSA within the daily/monthly 

data files reconcile to the balances reported in the Servicer’s servicing system as 

well as to the Servicer’s FMS accounting interface file. 

42. The servicer shall provide reasonable additional support as needed (e.g., data files, 

reports, source documents) to substantiate reported activity and balances.

Security 

43. The Servicer shall restrict access to FSA held loans being serviced from all other 

loans on their system. Access must be limited to personnel who have obtained 

proper clearances and who are specifically authorized to view or perform 

transactions and services on loans held by FSA. 

44. The servicer shall provide previous security information from the past three years to 

include a discussion of security incidents; and audits like SAS 70s, Sarbanes Oxley 

reviews, independent security assessments, risk assessments, and/or internal 

reviews along with the applicable remediation plans. 

45. The servicer shall provide its system's most current vulnerability scan results, and 

remediation plan. 

46. The servicer shall provide existing security documentation like its security 

organizational structure, its system's boundary, existing security policy, procedures, 

and plans. 

47. The servicer shall complete personnel background screening requirements ASAP. 

a) All personnel are required to complete a federal background clearance based on 

their position risk level. Background clearances are submitted on line via Office of 

Personnel Management (OPM)'s Electronic Questionnaire for Investigations 

Process (e-Qip). Contractor employees who have undergone appropriate 

personnel security screening for another federal agency may submit proof of 

personal security screening for validation. (Attached Security Attachment A -

Department of Education's Directive for Contractor Employee Personnel Security 

Screenings.) 

b) Preliminary clearances must be completed for high-risk positions prior to working 

on Federal Student Aid systems or data (This process can take 2-6 weeks). 
Attachment A-1 

All_InitialReq_v21.0 13

Moderate and low risk positions must submit background clearance paperwork 

prior to working on Federal Student Aid computer resources. 

c) Non-U.S. Citizen may be assigned to a High Risk IT (6C) level position, provided: 

he/she is a Lawful Permanent Resident of the United States and has resided 

continuously in the United States for a minimum of three (3) years. Non-U.S. 

Citizens living outside of the United States cannot have the capability to access 

Federal Student Aid systems or data. 

48. The servicer shall complete a self-assessment of it's system and facilities based on 

NIST SP 800-53 controls, identify security deficiencies/gaps, and create a 

remediation plan for the identified deficiencies. 

49. The servicer shall agree to provide support for all actions required for a formal 

security authorization and continuous monitoring program as defined by NIST SP 

800-37. 

50. The servicer shall create a project plan that they will follow to develop a NIST SP 

800-18 compliant System Security Plan created in the Department of Education 

format. 

51. The servicer shall bundle the requested information in requirements 39 - 45 above 

as attachments to a discussion document that provides a discussion for each 

requirement and artifact submitted. The cover page for this package will include a 

self-certification document identifying the system's security posture to include its 

overall security risk. The cover page will be signed by the servicer's senior security 

official and program manager attesting that the information within the package is 

accurate. 

NSLDS 

52. The servicer shall report in the same format as a Guaranty Agency (GA) for all 

loans serviced for Federal Student Aid by creating an NSLDS data base extract file 

containing FFEL loans and transmit the FFEL Loans data to NSLDS using the 

reporting requirements detailed in the GA Data Provider Instructions with minimal 

differences. The Servicers will be provided a GA and Lender Code to be associated 

with each loan. The Servicers will report the date of default and loan status for 

default as day 271, using NSLDS loans status fields. The Cohort Default Rate date 

will be reported at day 361, using the NSLDS Claim Payment fields. A list of these 

filed changes will be provided. The GA Data Provider Index of fields that are 

required of the FFEL servicers in addition to more information on Guaranty Agency 

Data Provider Instructions can be found at the GA DPI Link 

(http://ifap.ed.gov/nsldsmaterials/0605DPInstNSLDS.html). 

53. The servicer shall use the NSLDS provided DataPrep software (or equivalent) to 

perform Extract Validation and create a Submittal file. 

54. The servicer shall send the submittal file to NSLDS on an established weekly 

schedule. 

55. Once loans have been reported, the servicer shall report to NSLDS all FFEL open 

loans. Closed loans must be continually reported until closed status is successfully 

accepted by NSLDS. This includes loans that are closed prior to initial NSLDS 

reporting. 
Attachment A-1 

All_InitialReq_v21.0 14

56. The servicer shall retrieve the Load Process Error file from NSLDS for each 

submittal. The servicer must review errors and correct as many as possible before 

the next weekly submittal. 

57. The servicer shall identify when key borrower indicators have change and report on 

both the old data and the new data. 

58. The servicer shall work with other data providers—including other GAs, the Direct 

Loan Program, the Debt Management Collection System, Perkins schools, and the 

Common Origination Disbursement System—to resolve identifier conflicts including 

assigning pseudo SSNs where appropriate (see NSLDS DPI). 

59. The servicer shall update date, amount and reason for defaults based on current 

default criteria if the loans are transferred to DMCS or CDDTS. Once a loan has 

transferred to DMCS or CDDTS, stop reporting on the loan unless it is transferred 

back. When transferring loans the borrower and loan identifiers must be the same 

identifiers reported to NSLDS. For Rehabilitated Loans, the Date or Maturity should 

not change. 

60. The servicer shall report as a GA for all loans serviced for Federal Student Aid. 

61. The servicer shall utilize NSLDS on-line updating functionality to resolve customer 

service issues and to report loan discharge and Teacher Loan Forgiveness 

information. 

62. The Servicer shall transmit data to and from NSLDS via the Student Aid Internet 

Gateway (SAIG) or other approved secure transmission methods. Additional 

information on SAIG transmissions can be found at 

https://www.fsadownload.ed.gov/mainframeguide.htm. 

63. The servicer shall meet NSLDS reporting requirements and quality standards. All 

data submitted to NSLDS must be as complete and correct as possible. 

64. The servicer shall accept and store enrollment data and updates from NSLDS as the 

official source of such data. 

65. The servicer shall continue to follow Common Manual Delinquency reporting to 

schools. 

66. The servicer shall provide additional data elements to the re-engineered NSLDS. 

These elements will include, but not be limited to: delinquency data, discharge data, 

forgiveness data, and school/ISIR data. This data has been worked through the 

community on the FFEL Data Standards Team and can be found online. 

67. The servicer shall work with FSA data providers on changes to interfaces as reengineering projects occur. 

68. The servicer shall accept a file from NSLDS when receiving loans from DMCS and 

CDDTS in order to update the records with missing data elements. 

Unique Client/Lender Requirements for Federally Serviced Portfolio 

69. The servicer shall use the client name Department of Education for this portfolio. 

70. The servicer shall use the Government assigned client LID for this portfolio. 

71. The servicer shall use the Government assigned Guarantor Code for this portfolio. 

72. Each servicer will be assigned a unique code. 
Attachment A-1 

All_InitialReq_v21.0 15

73. The servicer shall maintain unique standard reporting for loans within each Program 

(i.e. 08/09 Loan Purchase Program, Puts from 08/09 Participation Program, 09/10 

Loan Purchase program, Conduit, Direct Loan, etc.) 

74. The servicer shall process refunds via Treasury checks. Refunds are required for 

overpayments greater than or equal to $5.00. 

75. The servicer shall perform small balance processing as follows: 

a) Overpaid Amount – Small balance write-ups of overpaid balances less 

than $5.00. 

b) Underpaid Amount – Small balance write-off of underpaid balances less 

than $25.00. 

76. The servicer shall have the ability to charge late charges, but no assessment of late 

charges on loans in the ED portfolio is to be assessed at this time. 

77. The servicer shall have the ability to charge other fees (i.e. NSF), but no charges for 

other fees on loans in the ED portfolio are to be assessed at this time. 

78. The servicer shall have the ability to support borrower benefit plans required by each 

loan purchase (PUT) program. 

79. 799/LARS reporting is not required for ED portfolio. 

80. The servicer shall have the ability to perform collection and due diligence activities 

"as required by legislation and/or regulations." Servicers will be required to provide 

collection and default aversion activity on loans serviced under this contract as long 

as the loan remains on the servicer’s system. If a borrower reaches the 360 days 

delinquent, the servicer will be required to transfer the loan to the DMCS. 

a) The servicer shall send and electronic transfer file to DMCS with required 

information about the defaulted borrower and the defaulted loan. 

b) The servicer shall provide access to all required collateral information for the 

defaulted loan. 

c) The servicer shall accept and resolve rejected records received from DMCS. 

81. The servicer shall process discharge transactions with required supporting 

documentation following the required regulatory guidelines. The servicer is required 

to facilitate the timely and accurate processing of discharge requests by ensuring 

that complete loan discharge documentation for the individual is submitted. The 

servicer is also required to make a determination based on complete loan discharge 

documentation and applicable guidelines. Depending on the discharge type, the 

Department reviews discharge decisions through a sampling methodology or 

conducts a complete review. 

82. The servicer shall transfer loans to the Conditional Disability and Discharge System 

once loans have been determined as eligible to be transferred. 

83. The servicer shall obtain school information needed from the Postsecondary 

Education Participants System (PEPS). 

84. The servicer shall be prepared to provide procedure and/or training materials when 

requested by ED. ED may review these documents to ensure regulatory and 

legislative requirements are met. 

85. The servicer shall be required to transfer loans to, or accept loans from, another 

servicer at the request of ED. 
Attachment A-1 

All_InitialReq_v21.0 16

86. The servicer shall provide access to account level information and collateral for all 

federally held loans using technology supported by ED (web-based, terminal 

emulation, etc.). 

Loan Conversion 

The loan conversion process occurs when a seller requests ED to purchase loans, and 

ED validates the seller’s approval to participate, checks the eligibility of the loans, 

provides payment to the seller, and takes ownership of the loans as federally held 

assets. 

Below are the requirements a servicer must complete in addition to the existing 

requirements to service an FFEL loan: 

87. The servicer shall create and maintain a Loan Purchases Tracking Log - to include: 

Checklist of loan purchase activities, status of activities, and loan counts/amounts. 

SEE Conversion ATTACHMENT A – Sample of Loan Purchases Tracking Log. 

88. The servicer shall provide Loan Purchases Tracking Log to FSA, CFO, and OCFO 

on a periodic basis. 

89. The servicer shall accept 45-day notices submitted by sellers via email. SEE 

Conversion ATTACHMENT B – Sample of 45 Day Notice. 

90. The servicer shall inform FSA when a 45-day notice has been received. 

91. The servicer shall send an acknowledgement of receipt of the 45 Day notice to the 

Seller via email. 

92. The servicer shall validate, with FSA contact, the status of the seller’s Master Loan 

Sales Agreement (MLSA). 

93. The servicer shall notify seller if any additional MSLA approvals or documentation 

are needed for the sale and schedule the sale date with the seller's Servicer. 

94. The servicer shall notify FSA of the status of the MLSA package, if necessary. 

95. The servicer shall perform testing of the loan conversion transfer file process with 

sellers. SEE Conversion ATTACHMENT C – Sample of a loan conversion transfer 

file layout. 

96. The servicer shall receive loan conversion transfer file from the seller via FTP or 

other approved transfer method. 

97. The servicer shall review the loan conversion transfer file and notify FSA, CFO, 

OCFO of differences between the 45-day notice and loan conversion file as needed. 

98. The servicer shall perform edits on the loan conversion transfer file. Note: edits may 

vary based on purchase program. 

99. The servicer shall prepare report identifying any errors with the loan conversion file 

and/or any loans not eligible for sale. 

100. The servicer shall provide results of edit errors to the seller, FSA, and designated 

parties. The servicer shall work with the seller to resolve errors. 

101. The servicer shall send an acknowledgement of receipt of the 45 Day notice to 

the Seller via email." 

102. The servicer shall work with the Seller to confirm sales parameters, including but 

not limited to: 

a) Identify any loans in the sale have any liens on them. 
Attachment A-1 

All_InitialReq_v21.0 17

b) Identify if the loans are part of a Put from Participation or a straight Put to 

the Department. 

c) Identify timing for receipt of Loan Conversion Transfer file from the 

Servicer, if needed. 

103. The servicer shall calculate pre-sale totals and final purchase price after errors 

have been resolved. 

104. The servicer shall create a pre-sale detail loan report including loan details for all 

loans included in the sale. SEE Conversion ATTACHMENT D – Sample of pre-sale 

detail loan report. 

105. The servicer shall transmit pre-sale detail loan schedule to seller for validation by 

seller. 

106. The servicer shall create invoice total file and submit to SAIG mailbox to be 'swept' 

by FSA CFO. SEE ATTACHMENT Conversion E – Invoice total file layout. 

107. The servicer shall receive Bill of Sale and related documents. SEE Master Loan 

Sale Agreement – Exhibit B – Sample of Bill of Sale. 

108. The servicer shall validate Bill of Sale package is authorized and complete. 

109. The servicer shall validate Schedule and Security Release Certificate (SRC) has 

been received if loans are subject to a security lien. SEE Master Loan Sale 

Agreement – Exhibit E – Sample of Schedule and SRC. 

110. The servicer shall flag loans subject to a security lien in Tracking Log. 

111. The servicer shall accept Notice of Assignments from seller and notify FSA that 

payment will be sent to designee if a Notice of Assignment is received. SEE 

Conversion ATTACHMENT F – Sample of Notice of Assignment. 

112. The servicer shall compare FSA Servicer pre-sale totals to seller's pre-sale 

detailed listing of loans sold - identify and resolve differences. 

113. The servicer shall request seller to provide updated Bill of Sale documents as 

needed. 

114. The servicer shall validate FSA approves/disapproves invoice of payment. 

115. The servicer shall process the loan sale transaction on servicing system when 

notified payment has been made. Loans now reside on FSA Servicer's system. 

116. The servicer shall reconcile the Servicing System balance and activity to FMS for 

each purchase deal. Resolve and differences and provide the reconciliation to 

FSA. 

117. The servicer shall reconcile the Servicing System balance and activity to FMS on a 

monthly basis. Resolve and differences and provide the reconciliation to FSA. 

118. The servicer shall receive collateral documentation and review for completeness. 

119. The servicer shall identify and notify seller of missing collateral documentation, 

work with seller to obtain required documentation. 

120. The servicer shall notify FSA of receipt of collateral and completeness of 

documentation. 

121. The servicer shall provide storage for, and access to, collateral documentation. 

122. The servicer shall accept, edit and process loan adjustment files from Servicer 

after close of sale. 

123. The Servicer shall coordinate with the Seller to receive and process any sales 

transition and post sale transactions, including but not limited to, borrower 
Attachment A-1 

All_InitialReq_v21.0 18

payments, loan cancellations, school refunds, NSF transactions for loans 

purchased by the Department. 

124. The Servicer shall provide a process to Put any ineligible loans back to the Seller, 

as needed (process "Unput" transactions). 
Attachment A-2 

All_IntermediateReq_v6.0 1

Additional

Servicer

INTERMEDIATE

Requirements

All_IntermediateReq_v6.0
Attachment A-2 

All_IntermediateReq_v6.0 2

Additional Servicer – Intermediate Requirements

Required by 3/31/10 unless otherwise noted 

TABLE OF CONTENTS

General Statement ........................................................................................... 3

Financial Reporting .......................................................................................... 4

Treasury ............................................................................................................. 4

Transaction Management .............................................................................. 5

Internal Controls ............................................................................................... 5

Accounting ......................................................................................................... 5

Reconciliations .................................................................................................. 5

Additional Reporting ........................................................................................ 5

Security ............................................................................................................... 6

NSLDS .............................................................................................................. 10

Additional Requirements for Federally Held Portfolio ............................ 10

Loan Conversion ............................................................................................ 11

Records Management ................................................................................... 11
Attachment A-2 

All_IntermediateReq_v6.0 3

General Statement 

 It is the intent of the Department to procure a performance based contract(s) 

that promotes competition and provides best of business services. To achieve 

this goal, the Department expects each servicer to provide commercially 

available services that will yield high performing portfolios and high levels of 

customer satisfaction. The following statements apply: 

- Servicers will be required to meet all statutory and legislative 

requirements. 

- Servicers will use their own discretion in deciding to provide services or 

business functionality that is recommended but not required. 

- Servicers may leverage all borrower repayment channels while 

maintaining existing branding provided all federally held loans are 

clearly distinguished and identified. 

- Small differences due to rounding in various calculations are 

understood and accepted providing the calculation itself is in 

compliance with federal regulation. 

- The department will allocate volume based on defined and understood 

performance metrics. 

- The Department does not intend to provide additional service level 

requirements. The Department does, however, expect best of 

business practices to be deployed. 

- The Department will not require the use of the Department or FSA logo 

on letters, web sites, etc. 

- Servicers will have full discretion to promote or not promote services 

as long as they meet legislative and regulatory requirements and are 

cost neutral to the government. 

- Servicers will have discretion to provide services to schools. 

- Services may use their own authentication process as long as the 

process is fully compliant with federal IT security guidelines. 

- With regard to split borrowers, it is acceptable for servicers to handle 

requests, phone calls, etc. for all loans being serviced, regardless of 

the holder as long as all federal laws and regulations are met.
Attachment A-2 

All_IntermediateReq_v6.0 4

Financial Reporting 

The following Financial Reporting Requirements are required to be implemented 

by September 30, 2009: 

1. The servicer shall produce the Treasury Report on Receivables (TROR), 

for each portfolio, on a monthly basis. The report must meet all 

Treasury/FMS guidance (See Treasury attachments A & B). The TROR 

must also: 

a. Be provided in Microsoft Excel Format; 

b. Be provided for the previous month by the 8th business day of the 

current month; 

c. Include all supporting data / documentation. The supporting 

documentation must also be provided for the previous month (e.g., 

aging information, status information, etc.) in Microsoft Excel 

format, by the 8th business day of the current month. 

2. The servicer shall provide all remaining required accounting reports. 

a. Consolidating Trial Balance (All Funds) 

b. Monthly & Annual Sub ledger Reports (to include Closing reports) 

c. Accounting Distribution Reports 

d. Specific Collection Reports (e.g. Lockbox, ACH Credits, ACH 

Debits, Web payments, Credit Cards, etc.) 

e. Receivable Aging Reports (by Fund, Cohort Year, Loan Program 

Type, Risk Category) 

f. Loan Portfolio Analysis 

g. SF-224 for cash transactions with Treasury ED Form 

h. Trial balance reports indicated under Reconciliation 

i. Loan portfolio performance reports (by Fund, Loan Type, cohort 

year, & Risk Category) 

j. Others as determined 

Treasury 

In 2010, Treasury will implement the Transaction Reporting System (TRS). TRS 

will be a centralized repository of detailed collection transaction information. TRS 

will provide integrated transaction and deposit reporting of revenue activity 

across all collection systems. Therefore, the servicer will be required to migrate 

its data recipient interfaces for the Lockbox (checks and ACH credits), Pay.gov 

(ACH debits and credit card payments), and CA$HLINKII (which reports detail for 

ACH credits that are not processed via the lockbox servicer, and reports 

summary for all deposits from all sources) to TRS. This requirement is estimated 

to be effective by September 30, 2010. Treasury’s web site contains further 

information on the TRS project at http://www.fms.treas.gov/trs/index.html. 
Attachment A-2 

All_IntermediateReq_v6.0 5

Transaction Management 

NO Additional Requirements beyond the Initial Requirements 

Internal Controls 

3. Effective from the first government fiscal year of operations (i.e., as of 

9/30/2009), the servicer shall develop and execute the following reports in 

response to financial statement audit “Prepared-by-Client” (PBC) data 

requests or as requested by management to support other audits or 

reviews: 

a. Collections Download 

b. Write-Offs activity – Download Requirements & Documentation 

Requirements 

c. Download of Transfers activity to DCMS 

d. Additional work products to support responses to auditor inquiries 

and requests 

** Refer to the FMS_Attachment_D document attached for additional 

details on these requirements. 

4. The Servicer shall provide support to FSA in compliance with OMB 

Circular A-123, Appendix C, which incorporates the Improper Payments 

Information Act of 2002 (IPIA).

Accounting 

NO Additional Requirements beyond the Initial Requirements 

Reconciliations 

5. The servicer must demonstrate that all data transfers (e.g., interfaces, 

files) are balanced across systems and reconciled at the transaction and 

balance level and all exceptions noted are aged and resolved timely. The 

servicer shall report aging of reconciling items on all reconciliations. The 

servicer shall resolve errors and/or variances timely, generally within one 

month. 

Additional Reporting 

6. The Servicer shall provide a Disbursement Date Change (Cohort Year) 

Report (required to be implemented by September 30, 2009) - The report 
Attachment A-2 

All_IntermediateReq_v6.0 6

displays all disbursement date changes after each quarter end that 

crossed cohort years. It displays the Account Number, Loan Identification 

Number, Principal Balances Outstanding, Interest Receivable Balances, 

Principal Paid, and Interest Paid. 

7. The servicer shall support the FSA implementation of a ‘Data Warehouse’ 

including the conversion of the daily/monthly file transfers to the 

warehouse. FSA will determine the type of file, transfer specifications, 

and specific data elements to be included in the file. 

Security 

Federal Student Aid agrees with the Office of Management and Budget (OMB) 

and Congress that the security of its data and IT resources is one of our highest 

priorities. Recognizing the need for agencies to have effective information 

security programs, Congress passed the Federal Information Security 

Management Act (FISMA) of 2002. FISMA provides the overall framework for 

ensuring the effectiveness of information security controls that support federal 

computer operations and assets. FISMA requirements apply to all federal 

contractors and organizations or sources that possess or use federal 

information or that operate, use, or have access to federal information 

systems on behalf of an agency. FISMA mandates the use of the standards 

created by the National Institute of Standards and Technology (NIST). and 

Federal Student Aid has adopted those standards and guidance for securing its 

information technology resources. 

Federal Student Aid security requirements indicated below ensure the confidentiality, 

integrity and availability of its data at a high level. System controls need to be tested and 

system documentation reviewed using an independent source. If adequate security is in 

place, Federal Student Aid will provide a formal security authorization to operate (ATO). 

Additional detailed requirements can be found in NIST security standards, special 

publications, and bulletins; OMB memorandums; and the Department of Education 

(DoED) policies and procedures. The primary document Federal Student Aid uses to 

identify and implement controls is NIST SP 800-53. The latest version of this guidance 

can be found at: http://csrc.nist.gov/publications/nistpubs/800-53-Rev2/sp800-53-rev2-

final.pdf 

 

Personnel 

8. All personnel are required to complete a federal background clearance 

based on their position risk level. Background clearances are submitted 

on line via Office of Personnel Management (OPM)’s Electronic 

Questionnaire for Investigations Process (e-Qip). Contractor employees 

who have undergone appropriate personnel security screening for another 
Attachment A-2 

All_IntermediateReq_v6.0 7

federal agency may submit proof of personal security screening for 

validation. (Attached: Department of Education’s Directive for Contractor 

Employee Personnel Security Screenings) 

9. Preliminary clearances must be completed for high-risk positions prior to 

working on Federal Student Aid systems or data (This process can take 2-

6 weeks). Moderate and low risk positions must submit background 

clearance paperwork prior to working on Federal Student Aid computer 

resources. 

10. Non-U.S. Citizen may be assigned to a High Risk IT (6C) level position, 

provided: he/she is a Lawful Permanent Resident of the United States and 

has resided continuously in the United States for a minimum of three (3) 

years. Non-U.S. Citizens living outside of the United States cannot have 

the capability to access Federal Student Aid systems or data. 

11. All personnel are required to successfully complete initial security 

awareness training within two weeks of employment and annual refresher 

training. The training can be completed on line using DoED’s security 

training program. 

12. Annual specialized training is required that is appropriate to job function. 

Facility 

13. Data Centers supporting Federal Student Aid systems are required to 

have controlled access with working security cameras.. 

14. Data center access control lists must be kept current. . 

15. Visitors must be logged and escorted at all times. 

16. Power equipment and power cabling for the information system must be 

protected from damage and destruction. Facility failover power and 

lighting are required for emergencies. 

17. The facility must employ and maintain fire suppression and detection, 

water damage controls, and temperature and humidity controls. 

18. Alternate data center worksites are required to have the same protections 

as the primary data center site. 

Telecommunications 

19. Data transfers of PII or other sensitive information must be encrypted 

using NIST certified encryption methods (see NIST standard, FIPS 140-2) 

20. All interconnections must be documented and have an Interconnection 

Security Agreement in place. (see NIST SP 800-47) 

21. Wireless communication containing Federal Student Aid information is not 

permitted within the data center. 

22. The Federal Student Aid System Security Officer must approve all remote 

access. 

Contingency Planning and Recovery 

23. A contingency / disaster recovery plan is required to provide continued 

operational service within 72 hours of a major catastrophe. 
Attachment A-2 

All_IntermediateReq_v6.0 8

24. Contingency plans must be tested at a recovery site annually using both 

DoED and Contractor personnel. 

25. The recovery site(s) must be geographically separated from the 

production site(s). 

26. Data sanitation at the recovery site is required after testing. (see NIST SP 

800-88)

27. System backups must be encrypted and kept at an alternate location with 

secured access. Sensitive backup tapes must be marked and have a 

secure transfer. (Attached: Federal Student Aid’s General Support 

System and Major Application Backup Media Handling Policy & 

Procedures)

Risk Management 

28. Annual self-assessment of security controls is required. . 

29. Independent risk assessments will be completed prior to system’s 

operation and then reassessed at a minimum of every three years. 

30. Independent security controls assessment will be completed. 

31. All identified vulnerabilities and security weaknesses will be captured and 

corrective actions tracked through Federal Student Aids Operational 

Vulnerability Management Solution (OVMS). Security remediations must 

be implemented to correct security deficiencies and appropriate evidence 

must be provided to close actions. 

32. Contractors will make themselves and the site available for security audits 

and control assessments. This includes interviews with key security staff, 

data gathering and submissions, scanning support, and escort activities. 

33. Federal Student Aid will have the right to test controls through 

independent scanning within the boundaries of the Federal Student Aid 

system and by other means like interviews, observations, and to 

document reviews. 

Security Documentation 

34. The contactor will develop, implement, and maintain a current system 

security plan (SSP) for the information system to provide an overview of 

the security requirements for the system and a description of the security 

controls in place or planned for meeting those requirements. Designated 

officials within Federal Student Aid will review and approve the plan. (see 

NIST SP 800-18)

35. A contingency plan must be created, approved, and tested annually. 

36. A configuration management plan must be created, approved, and 

implemented. 

37. Documented system boundaries are required. A documented inventory of 

hardware and software utilized, telecommunication interconnections and a 

network topology are required. (Attached: Federal Student Aid’s 

Boundary Definition template).

38. System access authorizations and signed rules of behavior must be 

maintained. 
Attachment A-2 

All_IntermediateReq_v6.0 9

39. Plans of Actions and Milestones that address security remediations are 

maintained in Federal Student Aid’s Operational Vulnerability 

Management Solution. 

Security Monitoring and Detection 

40. Network intrusion detection systems (NIDS) and host-based intrusion 

detection systems (HIDS) are configured appropriately and continuously 

monitored and updated if necessary. 

41. Systems will have appropriate auditing capabilities enabled. 

42. System logs are to be analyzed for suspicious activity. Logs will be made 

available to Federal Student Aid upon request. 

43. Compliance monitoring established for configuration settings. 

44. Routine network and database scans are scheduled. The scan results are 

analyzed and vulnerabilities identified. The identified vulnerabilities and 

actions taken will be documented in OVMS. 

45. Scans that identify web vulnerabilities will be completed. Scan results will 

be provided to FSA upon request. The identified vulnerabilities and actions 

taken will be documented in OVMS. 

46. Security remediations must be implemented to correct security 

deficiencies and appropriate evidence must be provided to close actions. 

Incident Response

47. Contractor must maintain an incident response plan that correlates to the 

DoED plan. 

48. Compromises of personal identifiable information (PII) must be reported 

immediately so that the Department can comply with its reporting 

requirements to report to U.S. Computer Emergency Readiness Team 

(CERT) within one hour of the incident. 

49. Contractor must preserve evidence and allow external forensic analysis 

either on-site or through shipment of components. 

50. Contractor must take appropriate actions for alerts and warnings provided 

by DoED or through other sources. Contractor will report status of their 

actions as requested. 

Security Configurations 

51. Federal Student Aid data must be segregated from non-Federal Student 

Aid data. 

52. Security patches must be kept current and appropriately tested prior to 

moving into production. 

53. Server and device security configurations must be maintained in 

accordance with NIST security configuration standards (See: 

http://checklists.nist.gov/). 

54. Passwords must meet Federal Student Aid’s password standards. 

(Attached: Federal Student Aid’s Password Parameters Policy & 

Procedures) 
Attachment A-2 

All_IntermediateReq_v6.0 10

55. Change control management procedures must be documented and 

followed. 

56. Federal Student Aid must approve system changes prior to production 

implementation. 

57. Data will be safeguarded commensurate with the highest categorization 

level based on FIPS 199. 

Access Control 

58. Federal Student Aid must approve all access to Federal Student Aid data 

and all contractor access that can affect any component within the 

system’s boundary. 

59. Application access reports need to be sent quarterly to Federal Student 

Aid for certification of access. 

60. A listing of IT personnel responsible for operations and maintenance of 

any Federal Student Aid system must be provided on a quarterly basis to 

FSA for certification of access. 

61. Access must be restricted based on least privilege. Role based access 

controls should be defined and documented. 

NSLDS 

62. The Servicer shall provide the National Student Loan Clearinghouse 

monthly updates to their federally serviced portfolio. National Student 

Clearinghouse (NCS) will provide weekly updates to NSLDS for all FFEL 

and DL loans in the FSA portfolio. NSLDS will provide the servicer with 

weekly enrollment data that include NSC updates. 

Additional Requirements for Federally Held Portfolio 

63. The servicer shall receive collateral in imaged and paper format and if 

received in paper format image it should be imaged in a format that can be 

ported easily to another system (Non-proprietary) 

64. The servicer shall verify collateral for all loans received in a sale within 45 

days and if any collateral is missing the missing collateral will be obtained 

from the seller. 

65. The servicer shall provide for FSA access to the imaging and serving 

system to view images, make annotations on borrower accounts and have 

complete access to view FSA data. 

66. The servicer shall provide a means for FSA to make a final determination 

on eligibility of borrowers for entitlements, such as discharge due to 

Closed School, Death, etc., and compromise offers. 

67. The servicer shall report loans to NSLDS and credit bureaus. 

68. The servicer shall cancel loans and make all financial adjustments when 

needed. 

69. The servicer shall place loans, where the borrower has applied for 

bankruptcy, into a bankruptcy status, prepare a Proof-of-Claim and 
Attachment A-2 

All_IntermediateReq_v6.0 11

provide any additional support needed to defend the loan against 

bankruptcy discharge. 

70. The servicer shall accurately prepare and respond to control 

correspondence (correspondence sent to FSA from the White House, 

Congress, and other high government officials) and meet control 

turnaround times established by the U.S. Department for FSA. 

71. The servicer shall respond to written and email questions and requests 

timely and accurately. 

72. The servicer shall respond and resolve customer complaints; and create 

and execute a plan to escalate complaints to FSA and the Ombudsman. 

73. The servicer shall have the ability to provide borrower interest rate 

discounts and assess late fees if directed to do so by FSA. 

74. The servicer shall accurately and timely complete and return Loan 

Verification Certificates received from consolidating lenders. 

75. The servicer shall assign loans to DMCS for collection once they reach 

360 days delinquent. If a loan is assigned in error the loan will be 

reinstated onto the servicer’s system. 

76. The servicer shall have the ability to accept and service loans that 

undergo rehabilitation from the DMCS. 

77. The servicer shall provide FSA the ability to monitor phone calls remotely. 

78. The servicer shall support quarterly monitoring reviews completed by FSA. 

79. The servicer shall support annual program compliance reviews done by 

FSA, or by an agent of FSA. 

Loan Conversion 

NO Additional Requirements beyond the Initial Requirements 

Records Management 

80. The Servicer shall comply with all of the following standard items related 

to records management: 

a. Citations to pertinent laws, codes and regulations such as 44 U.S.C 

chapters 21, 29, 31 and 33; Freedom of Information Act (5 U.S.C. 

552); Privacy Act (5 U.S.C. 552a); 36 CFR Part 1222 and Part 

1228. 

b. Contractor shall treat all deliverables under the contract as the 

property of the U.S. Government for which the Government Agency 

shall have unlimited rights to use, dispose of, or disclose such data 

contained therein as it determines to be in the public interest. 
Attachment A-2 

All_IntermediateReq_v6.0 12

c. Contractor shall not create or maintain any records that are not 

specifically tied to or authorized by the contract using Government 

IT equipment and/or Government records. 

d. Contractor shall not retain, use, sell, or disseminate copies of any 

deliverable that contains information covered by the Privacy Act of 

1974 or that which is generally protected by the Freedom of 

Information Act. 

e. Contractor shall not create or maintain any records containing any 

Government Agency records that are not specifically tied to or 

authorized by the contract. 

f. The Government Agency owns the rights to all data/records 

produced as part of this contract. 

g. The Government Agency owns the rights to all electronic 

information (electronic data, electronic information systems, 

electronic databases, etc.) and all supporting documentation 

created as part of this contract. Contractor must deliver sufficient 

technical documentation with all data deliverables to permit the 

agency to use the data. 

h. Contractor agrees to comply with Federal and Agency records 

management policies, including those policies associated with the 

safeguarding of records covered by the Privacy Act of 1974. These 

policies include the preservation of all records created or received 

regardless of format [paper, electronic, etc.] or mode of 

transmission [e-mail, fax, etc.] or state of completion [draft, final, 

etc.]. 

i. No disposition of documents will be allowed without the prior written 

consent of the Contracting Officer. The Agency and its contractors 

are responsible for preventing the alienation or unauthorized 

destruction of records, including all forms of mutilation. Willful and 

unlawful destruction, damage or alienation of Federal records is 

subject to the fines and penalties imposed by 18 U.S.C. 2701. 

Records may not be removed from the legal custody of the Agency 

or destroyed without regard to the provisions of the agency records 

schedules. 

j. Contractor is required to obtain the Contracting Officer's approval 

prior to engaging in any contractual relationship (sub-contractor) in 

support of this contract requiring the disclosure of information, 

documentary material and/or records generated under, or relating 

to, this contract. The Contractor (and any sub-contractor) is 
Attachment A-2 

All_IntermediateReq_v6.0 13

required to abide by Government and Agency guidance for 

protecting sensitive and proprietary information. 
Attachment A-2 

All_IntermediateReq_v6.0 14

Additional Information regarding records management: 

Extract from 36 CFR Part 12, regarding records management 

responsibilities of contractors. 

§1222.48 Data created or received and maintained for the Government by 

contractors.

(a) Contractors performing Congressionally mandated program functions are 

likely to create or receive data necessary to provide adequate and proper 

documentation of these programs and to manage them effectively. Agencies 

shall specify the delivery of the Government of all data needed for the adequate 

and proper documentation of contractor-operated programs in accordance with 

requirements of the Federal Acquisition Regulation (FAR) and, where applicable, 

the Defense Federal Acquisition Regulation Supplement (DFARS). 

(b) When contracts involve the creation of data for the Government's use, in 

addition to specifying a final product, agency officials may need to specify the 

delivery of background data that may have reuse value to the Government. 

Before specifying the background data that contractors must deliver to the 

agency, program and contracting officials shall consult with agency records and 

information managers and historians and, when appropriate, with other 

Government agencies to ensure that all agency and Government needs are met, 

especially when the data deliverables support a new agency mission or a new 

Government program. 

(c) Deferred ordering and delivery-of-data clauses and rights-in-data clauses 

shall be included in contracts whenever necessary to ensure adequate and 

proper documentation or because the data have reuse value to the Government. 

(d) When data deliverables include electronic records, the agency shall require 

the contractor to deliver sufficient technical documentation to permit the agency 

or other Government agencies to use the data. 

(e) All data created for Government use and delivered to, or falling under the 

legal control of, the Government are Federal records and shall be managed in 

accordance with records management legislation as codified at 44 U.S.C. 

chapters 21, 29, 31, and 33, the Freedom of Information Act (5 U.S.C. 552), and 

the Privacy Act (5 U.S.C. 552a), and shall be scheduled for disposition in 

accordance with 36 CFR part 1228. 

36 CFR Part 1228, Subpart K - Facility Standards for Records 

Storage Facilities. 

NARA requires that the requirements of Subpart K be incorporated into the 

contract requirements when records storage facilities are included in the contract. 

This covers direct contracts with commercial storage vendors such as Iron 

Mountain; it also covers contractors who store ED records as part of a larger 

service contract. http://www.archives.gov/about/regulations/part-1228/k.html
Attachment A-3 

Full_Req_v6.0 1

Additional

Servicer

FULL 

Requirements

Full_Req_v6.0
Attachment A-3 

Full_Req_v6.0 2

Additional Servicer – FULL Requirements

Required by 8/31/10 unless otherwise noted 

TABLE OF CONTENTS

General Statement ........................................................................................... 3

Direct Loans ...................................................................................................... 4
Attachment A-3 

Full_Req_v6.0 3

General Statement 

 It is the intent of the Department to procure a performance based contract(s) 

that promotes competition and provides best of business services. To achieve 

this goal, the Department expects each servicer to provide commercially 

available services that will yield high performing portfolios and high levels of 

customer satisfaction. The following statements apply: 

- Servicers will be required to meet all statutory and legislative 

requirements. 

- Servicers will use their own discretion in deciding to provide services or 

business functionality that is recommended but not required. 

- Servicers may leverage all borrower repayment channels while 

maintaining existing branding provided all federally held loans are 

clearly distinguished and identified. 

- Small differences due to rounding in various calculations are 

understood and accepted providing the calculation itself is in 

compliance with federal regulation. 

- The department will allocate volume based on defined and understood 

performance metrics. 

- The Department does not intend to provide additional service level 

requirements. The Department does, however, expect best of 

business practices to be deployed. 

- The Department will not require the use of the Department or FSA logo 

on letters, web sites, etc. 

- Servicers will have full discretion to promote or not promote services 

as long as they meet legislative and regulatory requirements and are 

cost neutral to the government. 

- Servicers will have discretion to provide services to schools. 

- Services may use their own authentication process as long as the 

process is fully compliant with federal IT security guidelines. 

- With regard to split borrowers, it is acceptable for servicers to handle 

requests, phone calls, etc. for all loans being serviced, regardless of 

the holder as long as all federal laws and regulations are met.
Attachment A-3 

Full_Req_v6.0 4

Direct Loans 

1. The servicer shall meet all legislative and regulatory requirements for the 

Direct Loan program (DL). In some cases Direct Loans will need to be 

serviced differently than FFEL loans, a few examples of these differences 

are listed below (not an all inclusive list): 

a. The interest rate for a Federal Direct PLUS loan is fixed at 7.9% for 

loans first disbursed after July 1, 2006. 

b. Public service loan forgiveness is only offered in the DL. 

c. There are two repayment plans unique to the DL: Income 

Contingent Repayment (ICR) and the Alternative Repayment. 

d. DL provides a 0.25% interest rate reduction for borrowers making 

payments through electronic debit accounts. 

e. As of July 1, 2009 the up front interest rebate for direct subsidized 

and unsubsidized loans will be 1.00%. 

f. There is an origination fee but no Federal default fee in the DL. As 

of July 1, 2009, the origination fee will be 1.5% for direct subsidized 

and direct unsubsidized loans. 

g. There is authority in the DL for unlimited discretionary 

forbearances. DL servicers must be able to offer borrowers 

additional administrative forbearance after the 3-year limit and upon 

receipt of additional documentation from the borrowers. 

2. The servicer shall meet all previously identified requirements for Federally 

Held Debt (i.e. Accounting, Treasury, Reconciliation, Internal Controls, 

etc.) for the Direct Loan portfolio. 

3. The servicer shall interface with Common Origination and Disbursement 

System (COD) & Electronic Master Promissory Note (eMPN) for newly 

originated loans. 

4. The servicer shall interface with the Direct Loan Consolidation System 

(DLCS) for Direct Consolidation Loans. 

5. The servicers shall accept loan and disbursement level adjustments from 

the originating system(s) and/or directly from schools as necessary. The 

majority of Direct Loan adjustments & cancellations are passed from the 

school to COD, and then from COD to the servicing system via the 

servicing system/COD interface. Direct Consolidation Loan adjustments & 

cancellations are received by the servicing system from the Direct Loan 

Consolidation System (DLCS) via the servicing system/DLCS interface 

6. The servicer shall interface with Internal Revenue Service (IRS) as 

needed to support income contingent or income based programs. 

7. The servicer shall support servicing of all Direct Loans, including Direct 

Consolidation Loans. 
Attachment A-4 

 Page 1 of 3 

Ongoing Allocation Methodology 

The allocation of ongoing volume will be determined based on the performance of each servicer in 

relation to the other servicers awarded. While the total number of awarded servicers has not yet been 

determined, this methodology works with any number of servicers (as shown in examples). 

Quarterly scores will be compiled for each servicer based on various performance factors; five high-level 

metrics, and some sub-metric categories, have been defined (see below). An average of the quarterly 

scores available on July 1 of each year will be used to determine the ranking of each servicer in each of 

the five high-level metric categories. By combining each servicer’s ranking in all categories, each servicer 

will be given a percentage of the total new volume of Federally Held Debt to be distributed for the 

upcoming year. 

Servicers will be informed of their allocation percentage of new volume by July 15 of each year. This 

allocation will become effective on August 15 of each year. The first ongoing allocation will be provided 

by August 15, 2010. 

The allocation of ongoing volume will be determined based on the following factors: 

1. Percentage of “In Repayment” Portfolio Dollars that go into default (as transferred to DMCS – 

360+ days) – Measured as a percentage of the servicer’s current Federally held portfolio 

a. Percentage at Public Schools 

b. Percentage at Private Schools 

c. Percentage at Proprietary Schools 

2. Percentage of unique “In Repayment” Portfolio borrowers that go into default (as transferred to 

DMCS – 360+ days) – Measured as a percentage of the servicer’s current Federally held portfolio 

a. Percentage at Public Schools 

b. Percentage at Private Schools 

c. Percentage at Proprietary Schools 

3. Borrower Surveys 

a. In School Borrowers 

b. In Grace Borrowers 

c. In Repayment Borrowers 

4. School Surveys 

a. Public Schools 

b. Private Schools 

c. Proprietary Schools 

5. Survey of FSA personnel 

Allocation Metric # 1 – to be measured Quarterly (calendar quarters beginning with October 1, 2009). 

Calculation = (Total Principal Balance Outstanding (or “PBO”) + Interest of all loans sent to DMCS 

during the quarter or > 360 days delinquent at the end of the quarter) DIVIDED BY (Total PBO + Interest 

of all of the servicer’s Federally held debt portfolio in repayment status). Resulting value is a percentage 

rounded to the nearest hundredth for each category of schools (Public, Private, Proprietary). All available 

quarterly scores in each category (1a, 1b, 1c) will be averaged together on July 1 of each year to calculate 

the Final Score for this allocation metric. 

Allocation Metric # 2 – to be measured Quarterly (calendar quarters beginning with October 1, 2009). 

Calculation = (Total number of borrowers sent to DMCS during the quarter or > 360 days delinquent at 
Attachment A-4 

 Page 2 of 3 

the end of the quarter) DIVIDED BY (Total number of borrowers within the servicer’s Federally held 

debt portfolio in repayment status). Resulting value is a percentage rounded to the nearest hundredth for 

each category of schools (Public, Private, Proprietary). All available quarterly scores in each category (2a, 

2b, 2c) will be averaged together on July 1 of each year to calculate the Final Score for this allocation 

metric. 

Allocation Metric # 3 – Surveys will be conducted quarterly of borrowers in each category (In School, In 

Grace, and In Repayment). The survey will measure borrower satisfaction with the servicer and results 

will be based on a scale of 0 – 100%, with 100% representing a perfect score. FSA, or an agent of FSA 

will conduct surveys. All available quarterly scores in each category (3a, 3b, 3c) will be averaged together 

on July 1 of each year to calculate the Final Score for this allocation metric. 

Allocation Metric # 4 – Surveys will be conducted quarterly of schools in each category (Public, Private, 

and Proprietary). The survey will measure school satisfaction with the servicer and results will be based 

on a scale of 0 – 100%, with 100% representing a perfect score. FSA, or an agent of FSA will conduct 

surveys. All available quarterly scores in each category (4a, 4b, 4c) will be averaged together on July 1 of 

each year to calculate the Final Score for this allocation metric. 

Allocation Metric # 5 – Surveys will be conducted quarterly of FSA personnel. The survey will measure 

FSA satisfaction with the servicer and results will be based on a scale of 0 – 100%, with 100% 

representing a perfect score. FSA, or an agent of FSA will conduct surveys. All available quarterly scores 

will be averaged together on July 1 of each year to calculate the Final Score for this allocation metric. 

Allocation Metric Score Comparison Among Servicers 

The above calculation will result in a set of 5 scores for each servicer, one score in each metric category 

(1-Defaulted borrower dollars, 2-Defaulted borrower count, 3-Borrower Survey, 4-School Survey, 5-FSA 

Survey). 

FSA will compare all servicers’ scores in each allocation metric category and provide a ranking for each 

servicer in that category, with the best score in each category receiving the highest possible value and the 

worst score receiving the lowest possible value (highest / lowest values will be determined by the number 

of servicers selected --- Highest score possible will be the total number of servicers selected, lowest score 

will be 1). 

Once a ranking value has been assigned to each servicer in each allocation category, all scores for a 

servicer will be added together to provide the “Total Score” for that servicer for the year. Each servicer 

will have one Total Score for each year. 

Allocation of New Volume of Federally Held Debt 

Each servicer will be assigned an allocation of new volume by dividing that servicer’s total score by the 

combined total scores of all servicers. The resulting percentage will determine each servicer’s percentage 

of new volume of Federally Held Debt. 

 

The servicer’s percentage of new volume will determine the percentage of new borrowers that will be 

sent to the servicer for servicing (loans for existing borrowers may, to the maximum extent practicable, be 

sent to the servicer already holding that borrower’s other loans). 

 NOTE: If a servicer is out of compliance (for example, but not limited to, financial management or 

reporting, security, OMB Circular A-123, Legislative Mandates, Program Compliance, etc.), that 
Attachment A-4 

 Page 3 of 3 

servicer’s new volume may be re-allocated to one or more other servicers until compliance has been 

achieved. In addition, that servicer’s current account volume may be transferred to another servicer, 

at the non-compliant servicer’s expense. 
Attachment A-5

SAMPLE - ONGOING ALLOCATION METRIC CALCULATION

Scenario 1 - 6 Servicers selected

FINAL SCORE BY ALLOCATION METRIC

12 3 456

1 Defaulted borrower count 1.10% 2.20% 3.30% 4.40% 5.50% 6.60%

2 Defaulted borrower amount 1.10% 2.20% 3.30% 4.40% 5.50% 6.60%

3 Borrower Survey 97.00% 95.00% 93.00% 91.00% 90.00% 89.00%

4 School Survey 97.00% 95.00% 93.00% 91.00% 90.00% 89.00%

5 FSA Survey 97.00% 95.00% 93.00% 91.00% 90.00% 89.00%

SERVICER RANKING BY ALLOCATION METRIC

12 3 456

1 Defaulted borrower count 6.0 5.0 4.0 3.0 2.0 1.0

2 Defaulted borrower amount 6.0 5.0 4.0 3.0 2.0 1.0

3 Borrower Survey 6.0 5.0 4.0 3.0 2.0 1.0

4 School Survey 6.0 5.0 4.0 3.0 2.0 1.0

5 FSA Survey 6.0 5.0 4.0 3.0 2.0 1.0

TOTAL SCORE BY SERVICER

12 3 456

30.0 25.0 20.0 15.0 10.0 5.0

ALLOCATION EACH SERIVER WILL RECEIVE

Total Score

New 

borrowers 

(based on 6M 

total new borr)

Servicer 1 30.0 28.57% 1,714,286

Servicer 2 25.0 23.81% 1,428,571

Servicer 3 20.0 19.05% 1,142,857

Servicer 4 15.0 14.29% 857,143

Servicer 5 10.0 9.52% 571,429

Servicer 6 5.0 4.76% 285,714

Combined 

Total 105 100.00% 6,000,000

TOTAL SCORE

Servicers

% of new volume 

Servicer will receive 

(Total Score / Combined 

Totals)

METRIC

METRIC

Servicers

Servicers
Attachment A-5

SAMPLE - ONGOING ALLOCATION METRIC CALCULATION

Scenario 2 - 5 Servicers selected

FINAL SCORE BY ALLOCATION METRIC

1 2 3 45

1 Defaulted borrower count 1.10% 2.20% 3.30% 4.40% 5.50%

2 Defaulted borrower amount 1.10% 2.20% 3.30% 4.40% 5.50%

3 Borrower Survey 97.00% 95.00% 93.00% 91.00% 90.00%

4 School Survey 97.00% 95.00% 93.00% 91.00% 90.00%

5 FSA Survey 97.00% 95.00% 93.00% 91.00% 90.00%

SERVICER RANKING BY ALLOCATION METRIC

1 2 3 45

1 Defaulted borrower count 5.0 4.0 3.0 2.0 1.0

2 Defaulted borrower amount 5.0 4.0 3.0 2.0 1.0

3 Borrower Survey 5.0 4.0 3.0 2.0 1.0

4 School Survey 5.0 4.0 3.0 2.0 1.0

5 FSA Survey 5.0 4.0 3.0 2.0 1.0

TOTAL SCORE BY SERVICER

1 2 3 45

25.0 20.0 15.0 10.0 5.0

ALLOCATION EACH SERIVER WILL RECEIVE

Total Score

New 

borrowers 

(based on 6M 

total new borr)

Servicer 1 25.0 33.33% 2,000,000

Servicer 2 20.0 26.67% 1,600,000

Servicer 3 15.0 20.00% 1,200,000

Servicer 4 10.0 13.33% 800,000

Servicer 5 5.0 6.67% 400,000

Combined 

Totals 75 100.00% 6,000,000

% of new volume 

Servicer will receive 

(Total Score / Combined 

Totals)

Servicers

METRIC

METRIC

TOTAL SCORE

Servicers

Servicers
Attachment A-5

SAMPLE - ONGOING ALLOCATION METRIC CALCULATION

Scenario 3 - 4 Servicers selected

FINAL SCORE BY ALLOCATION METRIC

12 3 4

1 Defaulted borrower count 1.10% 2.20% 3.30% 4.40%

2 Defaulted borrower amount 1.10% 2.20% 3.30% 4.40%

3 Borrower Survey 97.00% 95.00% 93.00% 91.00%

4 School Survey 97.00% 95.00% 93.00% 91.00%

5 FSA Survey 97.00% 95.00% 93.00% 91.00%

SERVICER RANKING BY ALLOCATION METRIC

12 3 4

1 Defaulted borrower count 4.0 3.0 2.0 1.0

2 Defaulted borrower amount 4.0 3.0 2.0 1.0

3 Borrower Survey 4.0 3.0 2.0 1.0

4 School Survey 4.0 3.0 2.0 1.0

5 FSA Survey 4.0 3.0 2.0 1.0

TOTAL SCORE BY SERVICER

12 3 4

20.0 15.0 10.0 5.0

ALLOCATION EACH SERIVER WILL RECEIVE

Total Score

New 

borrowers 

(based on 6M 

total new borr)

Servicer 1 20.0 40.00% 2,400,000

Servicer 2 15.0 30.00% 1,800,000

Servicer 3 10.0 20.00% 1,200,000

Servicer 4 5.0 10.00% 600,000

Combined 

Totals 50 100.00% 6,000,000

% of new volume 

Servicer will receive 

(Total Score / Combined 

Totals)

Servicers

TOTAL SCORE

METRIC

METRIC

Servicers

Servicers
Attachment A-5

SAMPLE - ONGOING ALLOCATION METRIC CALCULATION

Scenario 4 - 3 Servicers selected

FINAL SCORE BY ALLOCATION METRIC

12 3

1 Defaulted borrower count 1.10% 2.20% 3.30%

2 Defaulted borrower amount 1.10% 2.20% 3.30%

3 Borrower Survey 97.00% 95.00% 93.00%

4 School Survey 97.00% 95.00% 93.00%

5 FSA Survey 97.00% 95.00% 93.00%

SERVICER RANKING BY ALLOCATION METRIC

12 3

1 Defaulted borrower count 3.0 2.0 1.0

2 Defaulted borrower amount 3.0 2.0 1.0

3 Borrower Survey 3.0 2.0 1.0

4 School Survey 3.0 2.0 1.0

5 FSA Survey 3.0 2.0 1.0

TOTAL SCORE BY SERVICER

12 3

15.0 10.0 5.0

ALLOCATION EACH SERIVER WILL RECEIVE

Total Score

New 

borrowers 

(based on 6M 

total new borr)

Servicer 1 15.0 50.00% 3,000,000

Servicer 2 10.0 33.33% 2,000,000

Servicer 3 5.0 16.67% 1,000,000

Combined 

Totals 30 100.00% 6,000,000

TOTAL SCORE

% of new volume 

Servicer will receive 

(Total Score / Combined 

Totals)

Servicers

METRIC

METRIC

Servicers

Servicers
Attachment A-5

SAMPLE - ONGOING ALLOCATION METRIC CALCULATION

Scenario 5 - 2 Servicers selected

FINAL SCORE BY ALLOCATION METRIC

1 2

1 Defaulted borrower count 1.10% 2.20%

2 Defaulted borrower amount 1.10% 2.20%

3 Borrower Survey 97.00% 95.00%

4 School Survey 97.00% 95.00%

5 FSA Survey 97.00% 95.00%

SERVICER RANKING BY ALLOCATION METRIC

1 2

1 Defaulted borrower count 2.0 1.0

2 Defaulted borrower amount 2.0 1.0

3 Borrower Survey 2.0 1.0

4 School Survey 2.0 1.0

5 FSA Survey 2.0 1.0

TOTAL SCORE BY SERVICER

1 2

10.0 5.0

ALLOCATION EACH SERIVER WILL RECEIVE

Total Score

New borrowers 

(based on 6M total 

new borr)

Servicer 1 10.0 66.67% 4,000,000

Servicer 2 5.0 33.33% 2,000,000

Combined 

Totals 15 100.00% 6,000,000

TOTAL SCORE

% of new volume 

Servicer will receive 

(Total Score / Combined 

Totals)

Servicers

METRIC

METRIC

Servicers

Servicers
Attachment A-5

SAMPLE - ONGOING ALLOCATION METRIC CALCULATION

Scenario 6 - 6 Servicers selected

FINAL SCORE BY ALLOCATION METRIC

12 3 456

1 Defaulted borrower count 1.10% 2.20% 3.30% 4.40% 5.50% 6.60%

2 Defaulted borrower amount 6.60% 5.50% 3.30% 4.40% 2.20% 1.10%

3 Borrower Survey 97.00% 95.00% 93.00% 91.00% 90.00% 89.00%

4 School Survey 89.00% 90.00% 93.00% 91.00% 95.00% 97.00%

5 FSA Survey 97.00% 95.00% 93.00% 91.00% 90.00% 89.00%

SERVICER RANKING BY ALLOCATION METRIC

12 3 456

1 Defaulted borrower count 6.0 5.0 4.0 3.0 2.0 1.0

2 Defaulted borrower amount 1.0 2.0 4.0 3.0 5.0 6.0

3 Borrower Survey 6.0 5.0 4.0 3.0 2.0 1.0

4 School Survey 1.0 2.0 4.0 3.0 5.0 6.0

5 FSA Survey 6.0 5.0 4.0 3.0 2.0 1.0

TOTAL SCORE BY SERVICER

12 3 456

20.0 19.0 20.0 15.0 16.0 15.0

ALLOCATION EACH SERIVER WILL RECEIVE

Total Score

New 

borrowers 

(based on 6M 

total new borr)

Servicer 1 20.0 19.05% 1,142,857

Servicer 2 19.0 18.10% 1,085,714

Servicer 3 20.0 19.05% 1,142,857

Servicer 4 15.0 14.29% 857,143

Servicer 5 16.0 15.24% 914,286

Servicer 6 15.0 14.29% 857,143

Combined 

Total 105 100.00% 6,000,000

TOTAL SCORE

Servicers

% of new volume 

Servicer will receive 

(Total Score / Combined 

Totals)

METRIC

METRIC

Servicers

Servicers
Attachment A-5

SAMPLE - ONGOING ALLOCATION METRIC CALCULATION

Scenario 7 - 5 Servicers selected

FINAL SCORE BY ALLOCATION METRIC

12 3 45

1 Defaulted borrower count 1.10% 2.20% 3.30% 4.40% 5.50%

2 Defaulted borrower amount 6.60% 5.50% 3.30% 4.40% 2.20%

3 Borrower Survey 97.00% 95.00% 93.00% 91.00% 90.00%

4 School Survey 89.00% 90.00% 93.00% 91.00% 95.00%

5 FSA Survey 97.00% 95.00% 93.00% 91.00% 90.00%

SERVICER RANKING BY ALLOCATION METRIC

12 3 45

1 Defaulted borrower count 5.0 4.0 3.0 2.0 1.0

2 Defaulted borrower amount 1.0 2.0 4.0 3.0 5.0

3 Borrower Survey 5.0 4.0 3.0 2.0 1.0

4 School Survey 1.0 2.0 4.0 3.0 5.0

5 FSA Survey 5.0 4.0 3.0 2.0 1.0

TOTAL SCORE BY SERVICER

12 3 45

17.0 16.0 17.0 12.0 13.0

ALLOCATION EACH SERIVER WILL RECEIVE

Total Score

New 

borrowers 

(based on 6M 

total new borr)

Servicer 1 17.0 22.67% 1,360,000

Servicer 2 16.0 21.33% 1,280,000

Servicer 3 17.0 22.67% 1,360,000

Servicer 4 12.0 16.00% 960,000

Servicer 5 13.0 17.33% 1,040,000

Combined 

Total 75 100.00% 6,000,000

TOTAL SCORE

Servicers

% of new volume 

Servicer will receive 

(Total Score / Combined 

Totals)

METRIC

METRIC

Servicers

Servicers
Attachment A-5

SAMPLE - ONGOING ALLOCATION METRIC CALCULATION

Scenario 8 - 4 Servicers selected

FINAL SCORE BY ALLOCATION METRIC

12 3 4

1 Defaulted borrower count 1.10% 2.20% 3.30% 4.40%

2 Defaulted borrower amount 6.60% 5.50% 3.30% 4.40%

3 Borrower Survey 97.00% 95.00% 93.00% 91.00%

4 School Survey 89.00% 90.00% 93.00% 91.00%

5 FSA Survey 97.00% 95.00% 93.00% 91.00%

SERVICER RANKING BY ALLOCATION METRIC

12 3 4

1 Defaulted borrower count 4.0 3.0 2.0 1.0

2 Defaulted borrower amount 1.0 2.0 4.0 3.0

3 Borrower Survey 4.0 3.0 2.0 1.0

4 School Survey 1.0 2.0 4.0 3.0

5 FSA Survey 4.0 3.0 2.0 1.0

TOTAL SCORE BY SERVICER

12 3 4

14.0 13.0 14.0 9.0

ALLOCATION EACH SERIVER WILL RECEIVE

Total Score

New 

borrowers 

(based on 6M 

total new borr)

Servicer 1 14.0 28.00% 1,680,000

Servicer 2 13.0 26.00% 1,560,000

Servicer 3 14.0 28.00% 1,680,000

Servicer 4 9.0 18.00% 1,080,000

Combined Total 50 100.00% 6,000,000

TOTAL SCORE

Servicers

% of new volume 

Servicer will receive 

(Total Score / Combined 

Totals)

METRIC

METRIC

Servicers

Servicers
Attachment A-5

SAMPLE - ONGOING ALLOCATION METRIC CALCULATION

Scenario 9 - 3 Servicers selected

FINAL SCORE BY ALLOCATION METRIC

12 3

1 Defaulted borrower count 1.10% 2.20% 3.30%

2 Defaulted borrower amount 6.60% 5.50% 3.30%

3 Borrower Survey 97.00% 95.00% 93.00%

4 School Survey 89.00% 90.00% 93.00%

5 FSA Survey 97.00% 95.00% 93.00%

SERVICER RANKING BY ALLOCATION METRIC

12 3

1 Defaulted borrower count 3.0 2.0 1.0

2 Defaulted borrower amount 1.0 2.0 3.0

3 Borrower Survey 3.0 2.0 1.0

4 School Survey 1.0 2.0 3.0

5 FSA Survey 3.0 2.0 1.0

TOTAL SCORE BY SERVICER

12 3

11.0 10.0 9.0

ALLOCATION EACH SERIVER WILL RECEIVE

Total Score

New 

borrowers 

(based on 6M 

total new borr)

Servicer 1 11.0 36.67% 2,200,000

Servicer 2 10.0 33.33% 2,000,000

Servicer 3 9.0 30.00% 1,800,000

Combined Total 30 100.00% 6,000,000

TOTAL SCORE

Servicers

% of new volume 

Servicer will receive 

(Total Score / Combined 

Totals)

METRIC

METRIC

Servicers

Servicers
Attachment A-5

SAMPLE - ONGOING ALLOCATION METRIC CALCULATION

Scenario 10 - 2 Servicers selected

FINAL SCORE BY ALLOCATION METRIC

1 2

1 Defaulted borrower count 1.10% 2.20%

2 Defaulted borrower amount 6.60% 5.50%

3 Borrower Survey 97.00% 95.00%

4 School Survey 89.00% 90.00%

5 FSA Survey 97.00% 95.00%

SERVICER RANKING BY ALLOCATION METRIC

1 2

1 Defaulted borrower count 2.0 1.0

2 Defaulted borrower amount 1.0 2.0

3 Borrower Survey 2.0 1.0

4 School Survey 1.0 2.0

5 FSA Survey 2.0 1.0

TOTAL SCORE BY SERVICER

1 2

8.0 7.0

ALLOCATION EACH SERIVER WILL RECEIVE

Total Score

New 

borrowers 

(based on 6M 

total new borr)

Servicer 1 8.0 53.33% 3,200,000

Servicer 2 7.0 46.67% 2,800,000

Combined Total 15 100.00% 6,000,000

TOTAL SCORE

Servicers

% of new volume 

Servicer will receive 

(Total Score / Combined 

Totals)

METRIC

METRIC

Servicers

Servicers
Federal Student Aid Attachment A-6-- Servicing Pricing Definitions 

U.S. Department of Education Title IV Student Loan Servicing/Management

Version 9.0 Page 1 of 1 

Deliverable Definition

Borrowers in In-school Status Number of unique borrowers (SSNs) with balance not 

equal to $0.00 who have not separated from school 

as of the last day of the billing period

Borrowers in Grace or Current 

Repayment Status

Number of unique borrowers (SSNs) with balance not 

equal to $0.00 who have separated from school and 

are less than 31 days delinquent and are not in 

deferment, forbearance, or conditionally discharged 

as of the last day of the billing period

Borrowers in Deferment or 

Forbearance

Number of unique borrowers (SSNs) with balance not 

equal to $0.00 who have separated from school, are 

in deferment or forbearance and who are not 

conditionally discharged as of the last day of the 

billing period

Borrowers 31-90 Days 

Delinquent

Number of unique borrowers (SSNs) with balance not 

equal to $0.00 who have separated from school, are 

31 or more days, but less than 91 days delinquent, 

and who are not conditionally discharged as of the 

last day of the billing period

Borrowers 91-150 Days 

Delinquent 

Number of unique borrowers (SSNs) with balance not 

equal to $0.00 who have separated from school, are 

91 or more days, but less than 151 days delinquent, 

and who are not conditionally discharged as of the 

last day of the billing period 

Borrowers 151-270 Days 

Delinquent

Number of unique borrowers (SSNs) with balance not 

equal to $0.00 who have separated from school are 

151 or more days, but less than 271 days delinquent, 

and who are not conditionally discharged as of the 

last day of the billing period

Borrowers 270+ Days 

Delinquent

Number of unique borrowers (SSNs) with balance not 

equal to $0.00 who have separated from school and 

271 or more days and who are not conditionally 

discharged as of the last day of the billing period. 

This may include borrowers over 360 day that are 

considered in Default Status, but for some reason 

have not been transferred through no fault of the 

Servicer.

NOTES: 

1. Common pricing shall apply regardless of program (i.e. Direct Loan, Federal Family 

Education Loan) or volume serviced, unless otherwise noted in the contract. 

2. Reporting is required for the number of borrowers and/or loans and dollar amount of each 

program, in addition to any other reporting requirements provided in the contract. 

3. Borrowers in multiple statuses shall be billed once, in the lowest performing deliverable 

status. The lowest performing deliverable status is defined as the lowest unit priced 

deliverable. 

4. Borrowers pending discharge, which include, but are not limited to: conditional disability, 

death, or bankruptcy, shall be, for billing purposes, counted in the deliverable status at 

the time of the discharge request. 

5. “The last day of the billing period" is defined as the last day of the Department of 

Education’s monthly billing period. 

6. The annual pricing period shall begin on September 1, 2009.