Pearson wins £431m education contract

EDUCATION and publishing group Pearson today won its biggest ever contract.

The deal with the US government is potentially worth $800m (£431m) over 10 years.

Pearson Government Solutions will provide information to needy students on how to get Federal loans or grants, process those applications, pay them out and oversee repayment by students or parents. Many of the services are online.

It was today awarded a one-year contract worth $80m, renewable on an annual basis for another nine years. This replaces contracts which Pearson has run for the last 20 years and which most recently was worth $50m a year.

The government's Federal Student Aid (FSA) office provides more than $69bn a year to more than 10m college and other post-secondary students. It manages or oversees $357bn of outstanding student or parent loans for more than 25m borrowers.

The contract win comes at a key time for Pearson with 2005 expected to be the most important year in its recent history for winning or renewing major US education deals.

Chief executive Marjorie Scardino said: 'FSA and Pearson share the goal of providing opportunities for people to enrich their lives through education. We look forward to continuing our partnership for years to come.'

The new contract pulls together services currently provided through four different contracts so Pearson will have to design, build and operate a new system. It is subcontracting work to EDS, IBM, ORC Macro and other US companies.