According to people familiar with the matter, the Federal Office of Student Aid has cancelled the mid-stage solicitation of suppliers for modern student loan services.

FSA introduced Temporary service solutions, Or the International Space Station, last fall as part of Next Generation FSA Program Build a bridge between the current student loan service system and a modern website. Currently, there are nine different pre-default loan service providers, each with its own website, contact center and staff training. ISS aims to reduce it to two suppliers, who will assume all the same responsibilities as existing service providers.

This Year-end Congressional Budget Agreement Passed in December Including several regulations related to ISS solicitation, including prohibiting the Minister of Education from providing funding for any work related to the development of a new loan service system, unless it includes multiple service providers directly contracted with the Ministry of Education. After reviewing the impact of these regulations, the FSA decided to cancel the ISS solicitation.

The FSA plans to work with the leadership of the Biden administration to improve its long-term operating strategy for loan services. It is not clear what their next steps will be or when they will be taken.

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