Attachment__1 _PWS.pdf

Attachment 1: Performance Work Statement

Default Collection Services

1. INTRODUCTION

The U.S. Department of Education (ED), Federal Student Aid (FSA), performs collection and administrative resolution activities on debts resulting from non-payment of student loans made under the Federal Family Education Loan (FFEL) Program: Stafford Loans (formerly the Guaranteed Student Loan Program and including Federally Insured Student Loans), Supplemental Loans for Students, PLUS Loans (formerly Parental Loans for Undergraduate Students), and Consolidation Loans; the William D. Ford Federal Direct Student Loan (Direct Loan) Program (formerly known as the Federal Direct Student Loan Program): Federal Direct Stafford/Ford Loan Program, Federal Direct Unsubsidized Stafford/Ford Loan Program, Federal Direct Consolidation Loan, and Federal Direct Plus Loans; and Federal Perkins Loans (formerly National Direct/Defense Student Loans). FSA conducts similar collection and administrative resolution activities on debts resulting from a student's failure to fulfill grant requirements under the Pell Grant Program, the Supplemental Educational Opportunity Grant Program, the Academic Competitiveness Grant (ACG) and the National Science and Mathematics Access to Retain Talent (National SMART) grant. [Background information on each of these programs may be found in the website library – https://myeddebt.com/; or at http://ifap.ed.gov/ifap/.]

Since 1981, FSA has contracted for the services of Private Collection Agencies to support collection and administrative resolution activities on debts maintained by ED.

1.0 Under this Contract, the Contractor shall:

Perform duties in coordination with the FSA Service Centers. The Service Centers are: 1.0.1.

Washington Service Center, 830 First Street, NE, Washington, D.C.; Atlanta Service Center, 61 Forsyth Street, Atlanta, Georgia; Chicago Service Center, 500 W. Madison Street, Suite 1520, Chicago, Illinois; and San Francisco Service Center, 50 Beale Street, San Francisco, California.

Establish within two hundred and ten (210) calendar days of Contract award, 1.0.2.

administrative and collection office(s) dedicated exclusively to the collection and resolution of FSA accounts.

The collection office need not be located at the same site as the administrative office. The administrative office must also function as a liaison office between FSA and the Contractor. Meetings between the Contracting Officer's Representative (COR), the monitor and the individual Contractor may take place either in the Contractor's administrative office, their collection office, any subcontractor or satellite office, or any FSA designated Office. The Contractor may, at its option, establish additional collection offices (referred to as a satellite- collection office) at any time during the Contract period; however, the Contractor must incur the cost of the additional telecommunication line(s). These satellite-collection offices must conform to all applicable requirements set forth in the contract. The Contractor’s contract administrator shall maintain direct management control over both the primary office and the sub offices. Only one administrative office must service these offices. The Contractor shall notify the CO and COR before opening a satellite office.

http://ifap.ed.gov/ifap/

Accept and return account data for collection by electronic file transfer in the specified 1.0.3.

formats provided by FSA (see FSA’s Debt Management and Collections System Manuals).

Establish and maintain computer software and hardware which can accept and 1.0.4.

accommodate data on all FSA accounts, be updated on a daily basis, and provide the information specified in this Statement of Work. The Contractor shall generate Billing Statements through the FSA System. The Contractor shall generate all letters except as authorized or required by FSA through their computer system and transfer to the FSA System letter history screen via secure electronic file transfer (EFT). Access to all FSA account data must be restricted to the collection and resolution activities on FSA accounts exclusively.

Adhere to all FSA security requirements as outlined in the Departmental Directive, 1.0.5.

Handbook OCIO- 01, Handbook for Information Assurance Security Policy, including any future revisions, and any other FSA specified security policy documents;

maintaining, at the Contractor location, the same level of security for all FSA account data as is maintained on FSA's system.

Obtain an Authorization to Operate (ATO) from the Federal Student Aid Chief 1.0.6.

Information Officer prior to allocation of accounts. FSA will provide checklists and templates, which must be completed by a third party reviewer. The checklist and templates are based on NIST 800-53 requirements.

Establish a training program for each loan program and related FSA campaigns and 1.0.7.

initiatives to encompass the complete range of collection activity specified in this Contract. This program must include comprehensive initial and follow-up training of Contractor and subcontractor employees relative to the activities to be performed and the laws and regulations, which govern such activities received.

Provide a mailbox to receive FSA correspondence, exclusively, at a U.S. Post Office 1.0.8.

and pick-up correspondence received at this box at least once each workday.

Perform activities in strict adherence with all applicable Federal and State laws and 1.0.9.

regulations in a professional and courteous manner; and support the mission of the FSA/Collections, which is to: “ Accurately counsel borrowers and determine the best course of action based on each customer’s unique situation while ensuring compliance with any applicable laws, regulations and FSA Contract and by providing exceptional customer service to facilitate the resolution of the borrower’s debts.”

Provide facilities, equipment and perform actions necessary for large-scale nationwide 1.0.10.

collection of Federal Government debts.

Locate and contact borrowers to demand payment of their debts to the Federal 1.0.11.

Government, or otherwise resolve their debt.

Prepare eligible cases for administrative resolution, Administrative Wage 1.0.12.

Garnishment (AWG) and litigation, based on the criteria in the Contract, and meet established goals set by FSA. The Contractor shall be responsible for obtaining documentation in accordance with administrative resolution procedures [as outlined in the Procedures Manual], or as requested by FSA, and the forwarding of all such materials upon request.

Return all accounts and associated records, accompanied by all required documentation, 1.0.13.

to FSA within timeframes specified in the Contract, as outlined in Section 8 of the

PWS.,

Protect the Federal Government against loss of monies and loss of or damage to 1.0.14.

property.

Agree to indemnify, defend and hold the Federal Government harmless from all 1.0.15.

liability, loss, damages, claims and other expenses, including attorney's fees and court costs, originating from or in connection with the Contractor's performance under this Contract.

Take all necessary steps, as warranted, by each State or locality to insure that it is 1.0.16.

operating within the laws of the jurisdiction except insofar as Federal law supersedes these requirements, as specifically directed or approved by FSA in the collection of monies owed to the Federal Government. This includes meeting all applicable State-licensing requirements, including the successful completion by Contractor employees of any State mandated exams prior to the first placement of accounts. FSA will also hold periodic update/training meetings. Registration fees may be required of participants. Contractors are responsible for their travel expenses to the meetings and periodic update/training meetings.

The Contractor, in connection with other collection efforts involving the same borrower 1.0.17.

under any other contract, shall not access related data on FSA accounts. More specifically, no information relative to a FSA account may be exchanged or consolidated in any medium with information regarding the same borrower from another Federal agency, school, etc.

The contractor shall adhere to all terms, conditions, and requirements set forth in the 1.0.18.

SOW and any FSA policies and procedures established in conjunction with this contract. Failure to follow these requirements may lead to FSA taking administration action. Potential penalties for specific issues may include, but are not limited to, loss of commission/fees, recalling of accounts, withholding account transfers, staff removal, and/or termination of Contract.

1.1 GENERAL ACCOUNT CHARACTERISTICS

The general characteristics of the portfolio, as of September 30, 2015, having a balance (principal, interest, penalty fees, fees, and administrative costs) of $500.00 or more are available in the PCA website library (http://fsacollections.ed.gov). FSA does not guarantee that these numbers and values will precisely reflect the accounts eligible for transfer. They are presented as general portfolio characteristics.

1.2 LAWS AND REGULATIONS GOVERNING COLLECTION ACTIVITY

Collection activity on debts held by the Department of Education is authorized and regulated by a number of different statutes and regulations, including those listed here. The Contractor is required to http://fsacollections.ed.gov/ conduct its actions in a way that complies with these Federal and State laws. Failure to do so may result in immediate punitive measures and/or termination of the Contract. -- Title IV, Parts A through G of the HEA (20 U.S.C. 1070 - 1098d.) and implementing regulations (34 CFR Parts 668, 674, 682, 685, 690and 691);

The Federal Claims Collection Standards (31 CFR Parts 901-904). 1.2.1.

The Bankruptcy Code, as amended (11 U.S.C. 101 et seq.), especially sections 362(a) 1.2.2.

and 523(a) (8) (B).

The Privacy Act of 1974 (5 U.S.C. 552a). 1.2.3.

ED Debt Collection Regulations (34 CFR Parts 30, 31, and 34). 1.2.4.

Debt Collection Act of 1982 and the Debt Collection Improvement Act of 1996, as 1.2.5.

codified at 31 U.S.C. 3701 - 3720E. -- The Fair Debt Collection Practices Act, 15 U.S.C. 1692 et seq, and, as required by 31 U.S.C. 3718, State law regulating collection actions except where such State law is preempted by Federal law.

The Secretary of Education has statutory authority to contract for Collection services under section 430(b) of the HEA (20 U.S.C. 1080(b) and 20 U.S.C. section 1087hh (e) (4)), and the Department of Education Organization Act of 1980 (20 U.S.C. 3475).

1.3 TRANSFER OF ACCOUNTS

FSA’s initial transfer will be approximately 5,000 to 15,000 accounts after approval of the Authorization to Operate (ATO) and upon successful implementation of the deliverables as outlined in Section 5, Contract Deliverables. Though FSA has the final determination on all transfer amounts, the first several transfers may be level until after the CIE.

FSA has performed at least minimum collection activity on all accounts. FSA will not distinguish an account by the number of times it has been placed with a collection agency until such time as a new system is implemented, which can track and make commission payments based on number of times placed. FSA will not make transfers based on the default date of the loan. The only common characteristic is that each account will be categorized as delinquent. Any minimum balance criteria (principal, interest, penalty fees, fees, administrative costs) will be at the government’s discretion.

Additional account transfers will be based on contractor performance and evaluations conducted by FSA. Failure to achieve a level of performance that falls within the “performance range” may result in no additional account transfers to poor performers until performance within the performance range is achieved. [Description and timing of evaluations to be conducted in determining contractor performance can be found in Section C of the contract.]

INVENTORY CONTROL LIMITS 1.3.1.

A Contractor may, at its discretion, request a limit on the number of accounts that it wishes to accept ("inventory control limit"), under the following conditions:

1.3.1.1. By the 10th--The Contractor must send its request to set an inventory control limit on the next transfer to the CO and COR no later than the 10th of the month.

1.3.1.2. Reason--The Contractor must state the reason it wishes to cap its transfer volumes at this time

1.3.1.3. Other conditions set by CO and COR--The CO and COR may establish in writing additional limits or conditions related to Inventory Control Limits at any time during the performance of the Contract. FSA has the final authority on all account transfers and recalls. FSA expressly reserves the right to approve, deny or change any Contractor request to set an inventory control limit. Regardless of whether a Contractor has requested an inventory control limit, FSA may limit transfers to a Contractor for any reason.

FSA TRANSFER LIMITS 1.3.2.

FSA reserves the right, at any time, to limit the number of accounts transferred to a Contractor. For example, the CO may issue a policy indicating that FSA will not transfer a volume of accounts greater than 50% of the contractor's CIA. If FSA withholds "earned" accounts from a transfer, FSA will carryover the number of accounts not transferred and will add those to the "earned" account transfer volume at the next transfer. This process will be repeated with each transfer until the carryover has been eliminated.

2. IMPLEMENTATION

2.0 SUMMARY

In implementing their collections program, the Contractor shall establish an operational system to store FSA account records on its own computer system; establish the technological ability for FSA to remotely access the Contractor’s collection computer system (supplying any software, hardware, and connectivity) and providing any necessary training to FSA on the Contractor’s collection system at the Contractor’s expense finalize procedures relating to the transfer of accounts, reports and other information between FSA and the Contractor; prepare a Collections Training Manual and a Standard Operating Procedures Manual (including letters and forms that will be generated from the Contractor's collection system); and finalize a Quality Control Plan for use by Contractor and subcontractor personnel. The Contractor must complete these requirements prior to the first transfer of accounts.

2.1 CONTRACT IMPLEMENTATION EVALUATION

After the initial account transfer, the Government shall perform an initial review - Contract Implementation Evaluation (CIE) – with all Contractors or those Contractors meeting certain established review criteria (e.g. new FSA Contractors, former small businesses moving up to the unrestricted classification, etc.) in order to assess system related operations, the interface between the Contractor’s computer system(s) and the FSA-System, and the administrative interface between the Contractor and FSA. FSA reserves the right to conduct on-site and/or off-site reviews with each Contractor under the most appropriate method based upon review criteria and with an effort to maximize all available resources.

FAILURE OF CONTRACT IMPLEMENTATION EVALUATION 2.1.1.

Failure to successfully complete the CIE evaluation within the timeframes set by the Department will result in account transfers being stopped. Account Transfer will resume once all parts of the CIE evaluation have been completed successfully.

2.2 TRAINING

The Contractor's Collection Training Manual, Standard Operating Procedures Manual (that must include all Industry abbreviations in use by its collections), and the Quality Control Plan must be received by the Contracting Officer (CO)/Contracting/ Officer’s Representative (COR).

FSA will provide training on appropriate FSA Procedures to the Contractor's Training Staff.

Thereafter, the Contractor's Training Staff shall train all other Contractor employees and conduct regular training sessions for its employees and any subcontractor employees to ensure adherence to applicable laws, regulations and FSA policies. The Contractor shall conduct additional training to inform its employees and any subcontractor employees of all changes in operational procedures, laws or regulations as they are modified or updated. The Contractor shall also provide State and locality debt collection-related training to the employees, including the successful completion by Contractor and subcontractor employees of any State-mandated exams.

Each employee and subcontractor employee assigned to this Contract must receive training relevant to the Privacy Act of 1974 and Security Awareness, and shall certify, in writing, that they have received this training before they begin any collection activity on FSA accounts. Each employee must then re-take this training each year by July 15. Signed certifications must be uploaded to the e- IMF system for the employee on record within five (5) calendar days after completion of training.

The Contractor must include the training date with this with this submission... After the Contract award, FSA will provide the certification form to be signed by each employee and subcontractor employee.

The Contractor shall measure the effectiveness of the training by administering post-training tests.

The CO/COR may review the results to ascertain the need for additional training and testing. A certification form for all training provided in support of this Contract must be signed by each Contractor and subcontractor employee and maintained on file by the Contractor. Along with certifications, the Contractor must record (electronic spreadsheets, tracking forms, etc.) all training provided to Contractor employees or subcontractors by individual names, training topics, and dates of training. The Contractor shall make certifications and all training records available for Government review at the request of the CO/COR.

The Contractor may request site visits for technical assistance and/or training. The Contractor will be responsible for travel costs incurred for requested technical assistance and/or training site visits.

Proposed costs must be consistent with the most current Government per diem rates for lodging and meals. The PCA Training Manual may be referenced for additional information relative to request procedures. All payments by the Contractor for site visit costs must be made to the Government (E.g., the Contractor may not make payments to a hotel or a Federal employee). A schedule of all update training conducted during the month and a brief synopsis of the subject matter covered in each training session must be included in the Contractor’s Management and Fiscal Report.

2.3 QUALITY CONTROL

FSA is committed to quality control as a means of ensuring quality performance and achievement.

The Contractor shall also adopt this philosophy and, to that end, shall design a quality control plan and, upon final approval by the CO and COR, shall implement the plan. To monitor and provide contractor oversight, on-site reviews, along with periodic off-site reviews, may be performed as required. The reviews may be announced or unannounced. If significant instances of non-compliance are found, potential compliance concerns exist, or if changes are made by the Contractor or FSA that may affect performance in accordance with the Contract, follow-up or additional compliance reviews may be conducted. The reviews will focus on compliance with federal and state regulations, contract requirements, policies, etc. Agency Review Reports, including any findings, and corrective actions, will be issued at the completion of each review. All areas of the FSA collections Contract are subject to review and all finding/concerns must be resolved. Penalties for specific issues may include, but are not limited to, loss of commission/fees, recalling of accounts, withholding account transfers, staff removal, and/or termination of Contract. Contractors shall have an accessible complaint system for borrowers in place, including a direct link to submit a complaint on the homepage of their website.

REMOTE CALL MONITORING 2.3.1.

All Contractors shall provide FSA the capability to remotely monitor Contractor “collection calls” on all FSA accounts.

Contractors shall provide FSA the capability to remotely monitor all “collection calls” through accessing the agency phone system; however, “Small Business” contractors shall provide FSA the capability to remotely monitor all “collection calls” by accessing automated call recordings of collection calls through a secure web-based portal within 2 years of the Contract award

FSA will use remote phone monitoring and call recordings to perform compliance reviews of collection activities, assess call quality on FSA accounts and monitor individual collectors in reference to complaints. The Contractor must inform all parties that calls will be recorded and/or monitored for quality review purposes.

For FSA purposes, “collection calls” refer to any out-going or in-coming calls related to any collection activity on an FSA account. Collection activities include, but are not limited to, request for payments, administrative resolutions, FSA loan payment programs, administrative wage garnishments, skip tracing, verifications, etc.

Remote call monitoring through recorded calls must include all “collection calls” regardless of account, subject or duration. Other requirements include:

2.3.1.1. Storage of up to 180 days’ worth of calls

2.3.1.2. Ability to retrieve specific calls by day or by individual contractor staff

2.3.1.3. Recorded calls must be afforded the same protection as any other ED sensitive borrower data.

2.3.1.4. Remote call monitoring through agency phone systems must allow ED the ability to listen to individual contractor staff or randomly listen to the next available call.

2.3.1.5. Remote call monitoring (phone system or recorded calls) applies to the primary FSA contractor (includes all satellite offices). If a primary contractor (small or unrestricted) uses a subcontractor to perform “collection calls,” the primary contractor must be able to remotely monitor the subcontractor collection calls at the start of the subcontract award; and, must be able to record all subcontractor collection calls within 2 years of the subcontract award.

2.3.1.6. Agencies must provide any training, manuals, procedures, etc. necessary for FSA staff to utilize the agency’s remote call monitoring or call recording system.

2.3.1.7. When submitting Call Recordings, the PCA will be required to also submit a listing for each call with the borrower name, DMCS ID number, time, date, and duration of the call.

2.4 RESOLUTION OF COMPLAINTS

FSA will maintain a Complaint Tracking System that will include both verbal and written complaints. FSA will track by agency, individual collector, and nature of the complaint. When FSA has received one or more complaints for a collector of a type or violation that is a concern to FSA, the Contractor shall, upon notification, immediately remove that collector from the FSA Contract.

When the subject of any complaint is a concern to FSA, the CO/COR will notify the Contract Administrator to immediately cease the activity causing the concern. If there are complaints regarding this activity after the Contract Administrator have been notified, the CO shall be notified.

Contractors shall adhere to all complaint procedures required by FSA. At a minimum, complaint procedures will encompass time frames, proper documentation, and notification requirements.

2.5 COLLECTION LETTERS/FORMS

The Contractor shall obtain FSA’s approval of all collection letters and forms used by the Contractor, and/or generated from the Contractor's own computer system, prior to usage. The Contractor shall include directions for how to submit a borrower complaint on all collection letters and forms. The Contractor shall also obtain FSA’s approval with regards to any changes made to collection letters/forms. Contractor attorneys must approve all FSA agency letters/forms (and any changes) prior to submission to FSA and proof of acceptance by the Contractor legal counsel must be provided to FSA along with the letter submission. Any letter requesting repay ment from the borrower must be generated with a coupon. The specifications for this coupon will be provided after Contract award. The Contractor shall transmit to FSA on a weekly basis the letter history to include any return mail as outlined in the document “Standard Letters and Forms,” which FSA will provide after Contract award.

If changes and or corrections are needed on contract letters and the Contractor has been notified to make the changes, the Contractor must have all changes/corrections made and submitted, along with proof of Contractor legal counsel approval, to the FSA contact person for review and approval within 30 days. If the Contractor does not comply with this timeframe, transfer of accounts will be withheld until the letters are approved. The Contractor must provide a final production copy of all approved letters to the FSA contact person, CO and COR within 10 calendars days after notification by FSA that the letters have been approved.

2.6 DOCUMENTATION OF COLLECTION ACTIVITY

The Contractor shall immediately record, on its own computer system, all collection activity occurring on an account, including, but not limited to, documentation of all in-coming and out-going calls; complete, clear, accurate summaries of phone conversation; clear correspondence receipts and deliveries; etc.

The Contractor shall update the FSA-System with borrower's name, address, home and work telephone number changes and information regarding the borrower's employment, e.g., employer's name, addresses and telephone number. Reference the Procedures Manual for transmission mechanisms, security constraints and other specific data of inputs required by the FSA-System.

2.7 REPAYMENTS

The Contractor is strictly prohibited from soliciting the receipt and processing of payments under this Contract. The Contractor is also prohibited from soliciting post-dated checks. FSA's Lockbox will not accept post-dated checks. Reference the Procedures Manual for instructions relative to this subject.

CREDIT CARDS 2.7.1.

Any contractor that processes credit cards/debit cards for accounts under this Contract shall abide by all credit card securities and requirements as outlined by FSA and contained in the Payment Card Industry Data Security Standard (PCI DSS). The Contractor is responsible for the security of any cardholder data it maintains or possesses.

2.8 CORRESPONDENCE

ROUTINE 2.8.1.

The Contractor shall process routine incoming correspondence within ten (10) calendar days of receipt. Correspondence must be received, and maintained at the Contractor's administrative office. Correspondence must be retained at the administrative office when the collector is located at the sub office. Correspondence includes all documentation received pertaining to a “current” borrower account. Documentation received on accounts no longer placed with an agency will be forwarded to an FSA designated site (see PCA Procedures Manual for specific correspondence requirements).

2.9 OTHER

Other incoming correspondence as outlined in the PCA Procedures manual must be referred to FSA within one (1) business day...

METHOD OF DELIVERY TO FSA 2.9.1.

Contractors shall have the ability to image, electronically store and produce viable copies (legible, same format as original document) of all incoming correspondence and, if requested by FSA, can send electronically secure imaged documents.

RETENTION 2.9.2.

Unless otherwise stated in the Contract or specifically instructed by FSA, agencies must retain account information for the life of the contract.

3. RESOLUTION OF ACCOUNTS

The Contractor shall systematically resolve all accounts transferred in accordance with the terms and conditions of the Contract.

The Contractor shall ensure that all attempts to collect on accounts transferred do not involve harassment, intimidation, false, or misleading representation. There shall be no unnecessary communications concerning such debt to persons other than the borrower or the borrower's designated representative. All requests for information from specified third parties, as defined in the PCA Procedures Manual, must be referred to FSA upon receipt (e.g., congressional inquiries, etc.).

3.0 REQUIRED ACTIVITIES, DOCUMENTATION AND STANDARDS

Listed below are the required collection activities to be performed by the Contractor, the required documentation to be obtained by the Contractor, and FSA standards to be followed by the Contractor.

LOCATING AND CONTACTING THE BORROWER 3.0.1.

3.0.1.1. Upon initial contact with the borrower, the Contractor’s employee shall clearly identify themselves as working for a firm under contract to FSA, verify that the borrower's name, address, email address, and telephone numbers are current and obtain employer's name, address and telephone numbers. This information, including all changes, must be updated to the FSA-System via the next regular transmission of data.

3.0.1.2. The use of cell phones (personal or business) by regular collection staff to contact borrowers or any third party is expressly prohibited. A limited number of higher-level management may use cell phones to contact borrowers or third parties in special circumstances. A list of managers that a Contractor wants to be able to use cell phones must be forwarded to the COR for approval. All cell phone calls must be properly documented in the Contractor collection system with the phone number, date, time, employee identification, and call summary. The agency must ensure cell phones are used according to all applicable federal, state, and local laws regarding debt collection communications.

3.0.1.3. Whenever the Contractor determines that the borrower address last known to FSA is undeliverable or the account address record has been coded as “Undeliverable”, the Contractor shall perform skip-tracing efforts. If the Contractor contacts the borrower at an address other than the last address known to FSA, the Contractor shall reissue its first demand letter to the borrower at the new address. The Contractor shall process update in the next regular transmission of such data.

REPAYMENT OF ACCOUNTS 3.0.2.

The Contractor must determine appropriate strategies to resolve borrower accounts that are based on their understanding of the borrower’s unique situation. The Contractor must listen to the borrowers’ circumstances and determine the best course of action to facilitate the resolution of the borrower’s debt based on the borrower’s ability to repay, willingness to repay, and other circumstances regarding the borrower’s account. The PCA must balance what is in the best interest of the borrower against what is most fiscally responsible to the federal taxpayer. The Contractor must choose from the following account resolution strategy(ies):

3.0.2.1. Loan rehabilitation

3.0.2.2. Loan consolidation

3.0.2.3. Loan compromise and settlements

3.0.2.4. Voluntary repayment

3.0.2.5. Evaluation for administrative wage garnishment

3.0.2.6. Evaluation for referral for litigation

3.0.2.7. Evaluation for administrative (school-based discharges)

3.0.2.8. Evaluation for other administrative resolutions (e.g. disability discharge)

Except when the borrower is pursuing rehabilitation, the Contractor shall draft and send a 3.0.3.

"Repayment Agreement" letter (FSA will provide Standard Letters and Forms with sample text after Contract award) to the borrower confirming the payment arrangement which the borrower has agreed to and shall flag the account to receive the FSA-System generated monthly billing statement.

The Contractor may determine that a borrower wishes to repay the debt but is unable to 3.0.4.

make the minimum monthly payment amount to pay the debt in full within standard repayment options. At that point, the Contractor shall obtain verbal financial information and forward to the borrower a standard financial statement form (See Standard Letters and Forms, Financial Statement, which FSA will provide after Contract award.) The Contractor shall establish a temporary repayment plan based on the verbal information. Once the statement is returned to the Contractor by the borrower, the Contractor shall determine if the temporary repayment plan is supported by the financial data. If not, the Contractor shall negotiate a new repayment schedule.

For all non-FSA “program” repayment plans (e.g. rehabs, consolidations, etc.), the Contractor shall review the borrower’s repayment agreement and current financial status every 6 months to determine if adjustments are necessary.

Gratuitous payments do not constitute an agreed upon repayment arrangement. 3.0.5.

Accounts Eligible for Compromise 3.0.6.

The following restrictions apply to compromise activities:

3.0.6.1. Compromise settlements must not be offered as the first option in collection negotiations.

Contractor personnel may only discuss compromise settlements after negotiations on the borrower's ability to pay have progressed, and only under those circumstances wherein FSA has not forbidden the compromise.

3.1 FEDERAL EMPLOYEES

Periodically, FSA performs matches with Federal employee databases and if the account is not in current repayment FSA retains the right to recall the account from the Contractor.

3.2 LOAN REHABILITATION AND CONSOLIDATIONS

REHABILITATION 3.2.1.

Loan Rehabilitation allows borrowers a one-time opportunity to have their loans (with the exception of loans with certain exceptions defined in the PCA manual) taken out of default, and have the record of default removed from the credit history. Payments posted to the borrowers account must have accurate effective date information. Any account determined to have the effective date of a payment changed or altered will not be eligible for rehabilitation until at least the minimum number of monthly payments required have been made by the borrower. The Contractor shall refer to the PCA procedures manual for further information on rehabilitation.

Required supporting documentation must be attached.

CONSOLIDATION 3.2.2.

Consolidation allows the borrower to consolidate all student loan debts with one lender whether the loans are in default or not. The borrower must make the minimum required monthly payments. The Contractor shall complete the lender verification forms (LVC) and update the FSA-System for accounts eligible for consolidation.

3.2.2.1. Completed Forms

The completed lender verification forms will be forwarded to the consolidation lender. Copies of all LVCs, along with screen prints of the FSA-System, must be maintained by the Contractor and forwarded to the CO/COR upon request. The Contractor shall audit 100% of LVCs.

3.3 ADMINISTRATIVE WAGE GARNISHMENT (AWG)

AWG is an alternative means of enforcing collections of defaulted loans held by FSA. FSA is authorized to garnish up to fifteen (15) percent of the borrower's disposable salary. The law governing AWG prohibits an employer from discharging the borrower as a result of the garnishment.

An account is considered delinquent when a subsequent payment has not been received by the sixtieth

(60) day from the last payment. If the Contractor is unable to convince the borrower to bring his/her account current by the next payment due date, the Contractor shall review the account to determine if it is eligible for AWG

In accordance with FSA procedures the Contractor’s will research AWG eligibility and if it is determined, that the borrower has the ability, but no intention of paying, the borrower may be a candidate for AWG. The Contractor shall determine if the borrower is eligible for possible AWG in accordance with FSA procedures.

If the Contractor is unable to set up AWG for any reason and the borrower is a candidate for litigation, the Contractor shall send to the borrower a notice of intent to litigate.

3.4 ADMINISTRATIVE RESOLUTIONS

The Contractor may determine that certain accounts fall within the administrative resolution categories described in Section 3.5.2. Accounts returned as deaths, disabilities, and programmatic cancellations are eligible for full, non-discretionary write-off of the debt by FSA. Also, accounts processed based on Litigation will be counted as an Administrative Resolution.

In such situations, the Contractor shall perform the steps indicated for the applicable category and obtain the required documentation. FSA reserves the right to modify, change or remove administrative resolutions (including required documentation) if FSA determines it is in the Government’s best interest.

Accounts recommended by the Contractor for write-off, must be returned by the Contractor by specific categories on Contractor return files or submitted for manual recall by FSA.

The Government may designate, in writing, additional types of administrative resolutions (ARs). The Government will designate the number of AR units that will apply to the additional AR type. An additional type of administrative resolution designated by the Government would be for work the Contractor performs those results in:

3.4.1.1. Return of an account to the Government for discharge of the debt or for suspension of collection efforts; or

3.4.1.2. Increased recoveries to the Government on the accounts in the designated category (In this case, the Government may allow the Contractor to retain the account to continue collection or resolution efforts).

ADMINISTRATIVE RESOLUTIONS TYPES 3.4.2.

3.4.2.1. Death

The borrower's death or, in the case of a PLUS loan, the death of the student for whose education the loan was borrowed must be documented with an original or certified copy of the death certificate or an accurate and complete photocopy of an original or certified copy of the death certificate, to support the discharge of a Title IV loan due to death.

Note: Periodically, FSA may validate records against the Social Security Death Index. Accounts on FSA’s database that match the Social Security Death Index on name and Social Security number will automatically be written off. If an exact match does not occur, an exception report will be generated. These excepted accounts may be transferred to the Contractor.

Verification of death on these accounts must be documented as stated above.

3.4.2.2. Disability

If a borrower claims to be disabled, the Contractor shall refer the borrower to FSA’s Total and Permanent Disability servicer. FSA will notify the PCA of any borrowers held by the Contractor who are in the process of applying for discharge, at which time the PCA must suspend collection activity for 120 days or until FSA notifies the Contractor to either extend or end the suspension (whichever comes first). If the Contractor holds the account at the time that the TPD Servicer approves discharge for the borrower, the Contractor shall be paid an administrative resolution fee.

3.4.2.3. Incarcerations

In situations where the borrower is determined to be incarcerated, the Contractor shall obtain verification from a prison official of the borrower’s earliest release date. The Contractor shall document FSA’s system with the prison official’s name, title (or official website), prison, prison telephone number and earliest release date.

If the borrower is to be incarcerated for a period exceeding nine (9) years, the Contractor shall recommend the account be recalled. If the borrower is to be incarcerated for a period exceeding (9) nine months but less than (9) nine years the Contractor may recommend the account be recalled. If the borrower is scheduled to be incarcerated for a period of less than nine (9) years, the Contractor shall suspend collection activity on the account and follow up after the borrower’s anticipated parole date. The Contractor shall also document the account notepad with this information.

At the discretion of the Department, incarceration processing may be suspended. If suspended, the contractor will have the ability to recommend any borrower account be removed from its inventory for reason of Incarceration. Detailed processing flows and procedures will be distributed as part of the suspension process.

Incarceration processing may be changed with a 30-day notice from the Contracting Officer. At that time, if the contractor finds a borrower who they believe is incarcerated; they may send the borrower data to the Department and request the borrower be removed from their inventory without regard to the length of time the account has been with the contractor.

3.4.2.4. Litigations

If the Contractor determines through the course of collections, that the borrower has no intention of repaying their debt(s), the borrower is a potential candidate for litigation. For litigation purposes, the borrower account must meet certain criteria and the Contractor must prepare litigation packages within prescribed guidelines.

The Contractor shall conduct research to determine the borrower's ability to repay to include obtaining evidence that assets are in the borrower's name and that these assets can be seized or attached by lien.

Upon preparation of the account for litigation, the Contractor shall immediately submit the case file to FSA for approval. FSA will review each case for accuracy and compliance within thirty (30) days of receipt. If the Contractor fails to meet any litigation preparation requirements, the case will be returned to the Contractor for correction or completion of the requirements. The Contractor shall update any information contained in the package that becomes outdated due to non-compliance by the Contractor. The Contractor will receive the appropriate fixed fee for each case reviewed, and accepted by FSA for referral to the Department of Justice.

The Government may designate, in writing, certain types of litigation accounts as “Special Litigation.” Generally, “Special Litigation” accounts are those in categories for which the FSA believes the Government will be most effective in obtaining payment via the litigation process (e.g. borrower accounts within specific zip codes, etc.). A “Standard Litigation” account is any litigation preparation case that is not in a “Special Litigation” category designated by the Government.

3.4.2.5. Income Contingent Repayment Plan (ICRP) Accounts

Income Continent Repayment consolidations are accounts, which are consolidated without the borrowers making the required payments under the regular consolidation program. The contractor shall document the account notepad with information regarding the borrower’s financial condition.

3.5 SUSPENSION OF COLLECTION ACTIVITY

The Contractor shall immediately suspend collection activity for a reasonable period of 3.5.1.

but no less than (10) ten business days on an account and, if necessary (or requested by FSA), refer the issue, (NOT RETURN THE ACCOUNT) to FSA or FSA’s representative for resolution within five (5) calendar days after any of the following occur:

3.5.1.1. The borrower disputes the amount owed citing, for example, that the debt was never incurred, was paid off, or should have been canceled.

3.5.1.2. The borrower raises a legal defense against repayment (for example: closed school, ability to benefit, fraud, forgery, or circumstances under which FSA may be prohibited from pursuing collection).

3.5.1.3. The borrower requests a written review or hearing in response to the 65-

Day Notice of Federal Offset or 30 days Administrative Wage Garnishment Notice. The Contractor shall process all such correspondence in accordance with FSA requirements and guidelines.

Once FSA has made a decision, the Contractor will be notified to resume collection 3.5.2.

activity or close and return the account. Failure by the Contractor to cease collection activity as required will result in recall of the account by FSA.

3.6 CO-MAKERS

Prior to the first transfer of accounts, FSA will have initiated collection efforts in pursuit of both the borrower and co-maker prior to transfer of accounts to the Contractor. Once the Contractor determines that the borrower cannot be located, unable to repay the loan(s) or is delinquent, the Contractor shall pursue collection from the co-maker to the extent permitted by law, or as instructed by FSA.

4. ACCOUNT RETURN, RECALL, AND RETENTION

4.0 RECALL OF ACCOUNTS

The Contractor has twelve (12) months, beginning with the date of each transfer, to 4.0.1.

convert defaulted accounts to payment-in-full, satisfied in full, satisfactory repayment schedules, administrative resolution, or to prepare the account for AWG or litigation.

FSA may recall accounts not converted to one of these six categories within the twelve

(12) month period.

Periodically, FSA performs matches with Federal employee databases and if a Federal 4.0.2.

employee borrower account is not in current repayment, ED will recall the account regardless of duration with the Contractor.

In cases where prior to assignment to a PCA an FSA employee or FSA representative 4.0.3.

has documented the account collector notepad with a repayment agreement, has placed the account on billing, and the first payment has posted within twenty (20) days of the due date, the account may be immediately recalled by FSA and no commission for any payment received will be granted to the Contractor.

The Contractor shall work an account to the level of effort as specified in the contract. 4.0.4.

ED reserves the right to recall or require the return of any account or accounts at any time. FSA reserves the right to require Contractors to hold accounts until recalled by FSA. Contractors are no longer allowed to return accounts unless instructed to do so by

FSA.

The Contractor shall follow procedures relating to the return of accounts as outlined 4.0.5.

below:

4.0.5.1. Any account that has been fully-paid or settled-in-full, or must be returned by the Contractor within thirty calendar days after it reaches the applicable status

4.0.5.2. Changes in these time frames shall be made only with the approval of FSA.

4.0.6 If FSA identifies a borrower whose SSA benefits are being offset and there is no evidence the PCA is working with the borrower, FSA will recall the account.

4.1 RETENTION OF IN-REPAYMENT ACCOUNTS

The Contractor shall retain in-repayment accounts during the full period of 4.1.1.

performance (including any options, if exercised) of its Contract with FSA. Upon expiration of the period of performance (including any options exercised to extend the period of performance); the Contractor shall retain in-repayment accounts until directed to return accounts by FSA. Accounts will be recalled when there are no payments for 90 days, unless FSA directs otherwise.

The Contractor shall work these accounts in accordance with the terms and conditions 4.1.2.

of the c o n t r a c t . The Contractor shall provide billing and/or collection activities for the in-repayment accounts as long as they are assigned to the Contractor.

The Contractor will be paid for any accounts resolved via the administrative resolution 4.1.3.

process during the retention period.

4.2 CONTRACT PHASE OUT AND CLOSE OUT OF ACCOUNTS

NON-RETENTION ACCOUNTS 4.2.1.

FSA may conduct an orderly recall of all outstanding non-retention accounts on which there has been no payment within the last 90 days upon the effective date of phase out.

This process may begin no later than ninety (90) calendar days prior to the last phase of the Contract.

RETAINED IN-REPAYMENT ACCOUNTS 4.2.2.

4.2.2.1. FSA may conduct an orderly recall of all retained in-repayment accounts upon the effective date of expiration of the contract unless the Contractor has been awarded a subsequent FSA Collections Task Order or contract.

The Contractor is not allowed to return accounts unless instructed to do so by FSA.

4.2.2.2. The Contractor shall, according to Federal and/or State laws, destroy or dispose of, in a manner, which will prevent any unauthorized disclosures, any records containing personally identifiable information, which are not to be returned to FSA. The Contractor may be liable for criminal penalties as specified in the Privacy Act for failure to meet these requirements.

4.2.2.3. Contractor shall send visitor logs to the COR for final review and disposal.

5. CONTRACTOR DELIVERABLES

5.0 DELIVERABLES SCHEDULE

The Contractor's schedule of deliverables is shown below electronically. The Contractor shall forward one (1) copy of the deliverables (marked with an asterisk *) to the Contracting Officer (CO), the Contract Specialist (CS) and one (1) copy to the Contracting Officer’s Representative (COR). The COR will forward a copy of the deliverable to appropriate FSA personnel for review and feedback will be provided to the contractor within 30 days of receipt of the deliverable The contractor will make corrections/updates if required and return to the CO, CS, and COR within 30 days. Failure to submit reports on time or the submission of inaccurate reports may result in a delay in the allocation of accounts.

Requirement Ti me-Frame from Contract Award Start Up Deliverables Time-Frame/Frequency

Mission Critical Services Plan Submit to CO within 10 days of contract award

(See C.4.32) List of subcontractors, to include role, responsibilities, and if they have access to government data

Submit to CO within 10 days of contract award (See Section E, page 59)

Establishment of the administrative and collection office

In place within 210 days of effective date of contract award

Establishment of an operational system.

In place within 210 days of effective date of contract award.

Post office box rented at the U.S. Post Office dedicated solely to FSA Contract.

Obtained and functional within 210 days of effective date of contract award.

Toll-free collection telephone number dedicated solely to FSA Contract for borrowers residing in the U.S., territories and possessions and provide a means for borrowers outside the U.S.

to call in without incurring a charge.

Obtained and functional within 210 days of effective date of contract award.

Submission of electronic transfer of…