---
kind: "section"
citation: "20 U.S.C. § 1087f"
title: "20"
title_heading: "Education"
number: "1087f"
heading: "Contracts"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/20/1087f"
units:
  - "Chapter 28 — Higher Education Resources and Student Assistance"
  - "Subchapter IV — Student Assistance"
  - "Part D — William D. Ford Federal Direct Loan Program"
---

# §1087f. Contracts

- (a) **Contracts for supplies and services—**
  - (1) **In general—** The [Secretary](/usc/20/1003.md?p=17) shall, to the extent practicable, award contracts for origination, servicing, and collection described in [subsection (b)](#b). In awarding such contracts, the [Secretary](/usc/20/1003.md?p=17) shall ensure that such services and supplies are provided at competitive prices.
  - (2) **Entities—** The entities with which the [Secretary](/usc/20/1003.md?p=17) may enter into contracts shall include only entities which the [Secretary](/usc/20/1003.md?p=17) determines are qualified to provide such services and supplies and will comply with the procedures applicable to the award of such contracts. In the case of awarding contracts for the origination, servicing, and collection of [loans](/usc/20/1066a.md?p=2) under this part, the [Secretary](/usc/20/1003.md?p=17) shall enter into contracts only with entities that have extensive and relevant experience and demonstrated effectiveness. The entities with which the [Secretary](/usc/20/1003.md?p=17) may enter into such contracts shall include, where practicable, agencies with agreements with the [Secretary](/usc/20/1003.md?p=17) under [sections 1078(b)](/usc/20/1078.md?p=b) and (c) of this title, if such agencies meet the qualifications as determined by the [Secretary](/usc/20/1003.md?p=17) under this subsection and if those agencies have such experience and demonstrated effectiveness. In awarding contracts to such [State](/usc/20/1003.md?p=21-A) agencies, the [Secretary](/usc/20/1003.md?p=17) shall, to the extent practicable and consistent with the purposes of this part, give special consideration to [State](/usc/20/1003.md?p=21-A) agencies with a history of high quality performance to perform services for institutions of higher education within their [State](/usc/20/1003.md?p=21-A).
  - (3) **Rule of construction—** Nothing in this section shall be construed as a limitation of the authority of any [State](/usc/20/1003.md?p=21-A) agency to enter into an agreement for the purposes of this section as a member of a consortium of [State](/usc/20/1003.md?p=21-A) agencies.
- (b) **Contracts for origination, servicing, and data systems—** The [Secretary](/usc/20/1003.md?p=17) may enter into contracts for—
  - (1) the alternative origination of [loans](/usc/20/1066a.md?p=2) to students attending institutions of higher education with agreements to participate in the program under this part (or their parents), if such institutions do not have agreements with the [Secretary](/usc/20/1003.md?p=17) under [section 1087d(b) of this title](/usc/20/1087d.md?p=b);
  - (2) the servicing and collection of [loans](/usc/20/1066a.md?p=2) made or purchased under this part;
  - (3) the establishment and operation of 1 or more data systems for the maintenance of records on all [loans](/usc/20/1066a.md?p=2) made or purchased under this part; and
  - (4) such other aspects of the direct student [loan](/usc/20/1066a.md?p=2) program as the [Secretary](/usc/20/1003.md?p=17) determines are necessary to ensure the successful operation of the program.

## Source credit

(Pub. L. 89–329, title IV, § 456, as added Pub. L. 102–325, title IV, § 451, July 23, 1992, 106 Stat. 572; amended Pub. L. 103–66, title IV, § 4021, Aug. 10, 1993, 107 Stat. 352; Pub. L. 105–244, title IV, § 453, Oct. 7, 1998, 112 Stat. 1717; Pub. L. 110–227, § 7(c), May 7, 2008, 122 Stat. 747; Pub. L. 111–152, title II, § 2212(a), Mar. 30, 2010, 124 Stat. 1078; Pub. L. 113–67, div. A, title V, § 502(1), Dec. 26, 2013, 127 Stat. 1187.)

## Notes

### Editorial Notes

### Amendments

2013—Subsec. (a)(4). Pub. L. 113–67, § 502(1)(A), struck out par. (4) which related to servicing by eligible not-for-profit servicers.

Subsec. (c). Pub. L. 113–67, § 502(1)(B), struck out subsec. (c) which defined eligible not-for-profit servicer for purposes of this section.

2010—Subsec. (a)(4). Pub. L. 111–152, § 2212(a)(1)(A), added par. (4).

Subsec. (c). Pub. L. 111–152, § 2212(a)(2), added subsec. (c).

2008—Subsec. (b)(2), (3). Pub. L. 110–227 inserted “or purchased” after “loans made”.

1998—Subsec. (b)(3). Pub. L. 105–244, § 453(1), inserted “and” after semicolon.

Subsec. (b)(4), (5). Pub. L. 105–244, § 453(2), (3), redesignated par. (5) as (4) and struck out former par. (4) which read as follows: “services to assist in the orderly transition from the loan programs under part B of this subchapter to the direct student loan program under this part; and”.

1993—Pub. L. 103–66 amended section generally, substituting provisions relating to contracts for former provisions relating to terms and conditions.

### Statutory Notes and Related Subsidiaries

### Effective Date of 1998 Amendment

Amendment by Pub. L. 105–244 effective Oct. 1, 1998, except as otherwise provided in Pub. L. 105–244, see section 3 of Pub. L. 105–244, set out as a note under section 1001 of this title.

### Effective Date

Section effective Oct. 1, 1992, see section 2 of Pub. L. 102–325, set out as an Effective Date of 1992 Amendment note under section 1001 of this title.

### Selection of Student Loan Servicer

Pub. L. 117–328, div. H, title III, Dec. 29, 2022, 136 Stat. 4893, provided in part: “That for student loan contracts awarded prior to October 1, 2017, the Secretary [of Education] shall allow student loan borrowers who are consolidating Federal student loans to select from any student loan servicer to service their new consolidated student loan”.

Similar provisions were contained in the following prior appropriation acts:

Pub. L. 117–103, div. H, title III, Mar. 15, 2022, 136 Stat. 480.

Pub. L. 116–260, div. H, title III, Dec. 27, 2020, 134 Stat. 1603.

Pub. L. 116–94, div. A, title III, Dec. 20, 2019, 133 Stat. 2592.

Pub. L. 115–245, div. B, title III, Sept. 28, 2018, 132 Stat. 3102.

Pub. L. 115–141, div. H, title III, Mar. 23, 2018, 132 Stat. 746.

Pub. L. 115–31, div. H, title III, May 5, 2017, 131 Stat. 549.