ACS Beats Out SLM for $1 billion+ Student Loan Servicing Contract

NEW YORK – Affiliated Computer Services Inc. (NYSE: ACS) has received a contract worth up to $2.3 billion to administer student-loan services for the U.S. Department of Education.

The Education Department said in a written statement Thursday that Dallas- based ACS stands to receive about $1.04 billion over the next five years. With additional option years, the pact could be worth up to $2.3 billion over 10 years, the department said.

ACS competed against SLM Corp. (NYSE: SLM), commonly known as Sallie Mae, for the pact. ACS’ new pact with the Education Department takes effect Jan. 1.

Under the pact, ACS will administer direct-loan servicing functions such as borrowers’ correspondence, plus loan consolidation and collection activities for some $96 billion in loan obligations. Currently, these functions are split among various contractors, including ACS. There are nine million borrowers in the current loan portfolio.

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