Coast Professional, Pioneer Start Q3 with Win on ED Collection Contract

Coast Professional held onto its first place ranking among small business contractors in U.S. Department of Education’s private student loan collection performance competition in July.  Pioneer Credit Recovery, meanwhile, regained the lead among unrestricted contractors in the first month of the third quarter, as last period’s winner, Diversified Collection, fell to 13th place.

Coast Professional of West Monroe, La. scored 96.98 points to win the monthly competition in its peer group, followed by Collection Technology with 92.50 points and National Recoveries with 89.97 points.

Sallie Mae subsidiary Pioneer Credit Recovery scored 95.65 points to lead unrestricted contractors. NCO Financial was close behind with 93.28 points and ERS finished third with 92.21 points. The winner of the quarter performance results in their peer group will receive the most new accounts when the ED distributes them the following quarter.

The education department’s private collections performance results are determined by a weighted average of contractors’ performance in total dollars collected; total accounts serviced, and total administrative resolutions. The department awards 70 points to the top performer in the dollars collected category. Twenty points are awarded to the top performer in the total accounts serviced category, and the top performer in administrative resolutions receives 10 points. The other agencies are scored against the top performers in each category.

Coast won the dollars collected category and finished among the top three in the other two categories. Although ERS won the dollars collected category with the highest recovery rate during the month, Pioneer earned enough points in the category and won the accounts serviced category to take the lead in the group.

The third quarter is the last quarter that restricted contractors will be judged on their individual quarterly performance alone.  Come October 1, the education department said it will begin tallying the contributions of subcontractors.  Agencies that subcontract work will be eligible to earn up to five additional points during the quarterly competitive performance evaluation if their small business subcontractor is doing collection work based on the contract’s operational requirements. Agencies that do not subcontract may lose up to five points during the performance evaluation.

Fourteen of the 17 unrestricted private collection agencies have established a sub-contracting arrangement with a small business to increase the education department’s collections on defaulted loans.

CBE Group’s executive vice president Scott Blanchard told insideARM.com that Columbus, Ohio-based Value Recovery Holding (VRH) has been working as a subcontractor for CBE Group since the latest ED contract began in 2009. He said VRH’s experience and working knowledge of government contracts added value to the partnership.

“They offered the perfect combination of experience and cultural match. Their leadership team, philosophies and values were in alignment with CBE,” Blanchard said.

Performance Scores for July 2011