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Pearson to Integrate Student Aid Programs

By Nick Wakeman
Special to The Washington Post
Monday, February 14, 2005; Page E04

Pearson Government Solutions of Arlington is building a system for managing federal student financial aid programs under a contract that could increase to $800 million if all options are exercised.

The Education Department's Federal Student Aid office chose Pearson to build and operate a system that combines functions that had been done under four separate contracts, said Mac Curtis, president and chief executive of Pearson Government Solutions. The company is a division of Pearson PLC of London.

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One contract processed student loan applications, another handled written correspondence, a third operated a call center and a fourth dispersed money for the Direct Loan and Pell Grant programs.

Pearson held the first three contracts, while Accenture Ltd. of Hamilton, Bermuda, held the fourth, Curtis said.

Pearson's job now is to integrate the work, creating a single system that handles everything from inquiries about student loan programs and filling out forms to receiving funds and paying back loans, he said.

Students and parents will be able to connect with the system over the phone, through a Web site, by e-mail or through written correspondence, Curtis said. "It's about getting the right aid to the right student at the right time," he said.

The new system will "strengthen outreach to college-bound students and improve customer service through increased self-service opportunities," an Education Department spokesman said. "For schools, we will streamline their aid application, Pell Grant and Direct Loan origination and disbursement processes."

In fiscal 2004, the Federal Student Aid office provided more than $69 billion in financial aid to more than 10 million students, including more than $52 billion in new student loans and more than $12 billion in Pell Grants. Federal Student Aid directly manages or oversees a student loan portfolio of about $357 billion for more than 25 million borrowers, the Education Department said.

Pearson's one-year contract is worth $80 million, but it has nine one-year options that could push the value to $800 million.

Winning the contract was crucial for Pearson because the Federal Student Aid office represents about 15 percent of the company's $400 million in government-related revenue, Curtis said. "We've worked with the Federal Student Aid office for over 20 years," he said. "We understand the business processes, and we've helped them get to different technology platforms."

Curtis said he sees a growing demand in the government for contractors to build and operate such "customer interaction management" systems, as he calls them. Pearson has won contracts for similar work in the past eight months with the Centers for Disease Control and Prevention, the Equal Employment Opportunity Commission and the General Services Administration.

Nick Wakeman is a senior editor with Washington Technology. For more details on this and other technology contracts, go to www.washingtontechnology.com.

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