A pair of private collection agencies fired by the Obama administration have accepted the Education Department’s offer of new contracts to recoup past-due student loans, but the agreements are in limbo as the government wades through a messy court battle, The Washington Post reported Wednesday. Enterprise Recovery Systems and Pioneer Credit Recovery were among five companies whose contracts the government cancelled in 2015 after an audit showed them giving inaccurate information to people trying to get their student loans out of default. The companies said the evaluation was arbitrary and flawed for drawing conclusions based on excerpts from a handful of calls, and four of them took legal action against the department. To put an end to the litigation, the Trump administration in February said it would reconsider assigning accounts to the four companies and disregard the two-year old audit against them. Reversing the Obama-era decision may prove inconsequential for the time being; a group of companies that lost out on a 2016 debt-collection contract bid are waging a fight in the courts that is preventing the government from assigning accounts. Because of a temporary restraining order issued by a federal judge in the case, education officials are not transferring accounts to Enterprise, Pioneer or any other collection agencies until the courts give the okay.
