IDAPP Student Loan Servicing - Sole Source

The Illinois Student Assistance Commission (ISAC) is procuring student loan servicing for the Illinois Designated Account Purchase Program (IDAPP) through a sole source award to Nelnet Servicing, LLC d/b/a Firstmark Services. The services required include billing, payment posting, account maintenance, deferment and entitlement processing, borrower account adjustments, notifications, and loan reporting for IDAPP's private loan portfolio. The contract is valued at $230,000 for an initial one-year term beginning February 16, 2026, and ending February 15, 2027, with no renewal options included. ISAC justified the sole source selection based on significant conversion costs and data security risks associated with switching vendors, estimating approximately $158,075 in one-time conversion expenses including Nelnet's deconversion fees of $17.82 per borrower and $3.41 per loan. The written comment submission deadline for the public hearing is January 16, 2026, at 4 p.m., with contract approval occurring on January 21, 2026. The procurement contract is funded through IDAPP Non-Appropriated Funds with no state or federal funds utilized.

Nelnet Servicing, LLC d/b/a Firstmark Services is the incumbent vendor and has serviced IDAPP's loan portfolio since 2013 under nine prior sole source contracts valued between $205,000 and $1,500,000, totaling approximately $3.293 million. The sole source justification emphasized that service disruptions, compliance risks, and exposure of sensitive borrower information containing personally identifiable data for 6,323 borrower accounts would result if competitive rebidding were required instead of renewal with the incumbent vendor. ISAC negotiated pricing with Firstmark based on volume and confirmed that rates are comparable to other student loan servicing contracts. The contract requires integration with Nelnet's existing Federal Family Education Loan Program (FFELP) servicing infrastructure and systems. No set-asides for small business, minority-owned, women-owned, or veteran-owned businesses are indicated in this procurement. The contract award represents the most economically feasible option given the high cost of transitioning the existing loan portfolio to an alternative servicer and the operational risks associated with vendor switching.