Two of the debt collection companies that the U.S. Department of Education earlier this month accused of misleading borrowers could potentially continue to collect defaulted loans on the department's behalf under a different contract.
Coast Professional and National Recoveries were among the five companies whose contracts the department said it would end, citing "materially inaccurate representations" they made to borrowers who were trying to get their loans out of default.
But while the department won't give the two companies any more business under their 2009 contracts, newer agreements they have with the department so far appear to be unaffected by the allegations of misleading borrowers.
Coast Professional and National Recoveries were among the 11 entities that were awarded new debt collection contracts last September as part of the department's effort to redo all of its 2009 agreements with debt collectors.
A department official, who declined to be named, said Wednesday that the agency had not yet decided what action it would take regarding the companies' 2014 contracts. (The department has not yet purchased debt collection services from any company under those contracts, federal records show.)
Read more at Inside Higher Ed: https://www.insidehighered.com/news/2015/03/12/two-fired-federal-debt-collectors-may-still-get-government-business-they-sue