Dept. of ED Releases Important Collection Performance Report

Performance rankings are out for debt collection agencies under contract with the U.S. Department of Education and once again Pioneer Credit Recovery, Inc. and Coast Professionals outperformed peers in their respective categories.

This time, however, immediate rewards to top performers go beyond bragging rights. Pioneer, of Arcade, NY, and Anaheim, Calif.-based Coast Professional each received a greater number of new accounts than their peers when the education department issued new placements this past weekend. The allocations are proportionate to the agencies’ overall performance between October, 2009 and March 31, 2010, the first few months of the new student loan debt collection contract.

ED typically uses quarterly scores to determine which agencies get the most accounts. But with the ramp up and on-boarding of the new contract, awarded early last year, the last couple of months of 2009 were folded into the first full quarter of 2010 to determine dispersals.

Of the 153,381 new account placements ED transferred to collection agencies on April 25, 134,975 were reserved for the largest agencies with unrestricted contracts. Pioneer’s overall performance score of 98.16 means the ARM company, a division of student loan giant Sallie Mae, received 8 percent or 11,038 of the new placements. NCO Group, the largest accounts receivable management company in the world, received nearly 7 percent or 8,854 for its overall score of 78.74, and Van Ru Credit Corp., which ranked third with an overall score of 78.06, received 8,777 new placements.

ED’s performance scores are based on a weighted average of performance metrics, including total dollars collected, total accounts serviced and administrative resolutions. The top performer in each category receives the maximum score for that category, with the other agencies scored against the top performer. There are 70 points available for dollars collected, 20 for total accounts serviced, and 10 points up for grabs in the administrative resolution category.

On the small business set aside contract, Coast’s overall score of 88.81 earned nearly 25 percent of the small business allocation or 4,544 of the new placement. Second place Collection Technology, Inc. received 4,145 of the new accounts, and third place Delta Management Associates, Inc. captured 3,911 accounts for its 79.68 overall score.

At the beginning of the contract in October, all collection agencies received the same number of accounts to work, based on their respective peer group. Another placement is scheduled for June and will be distributed based on the allotted percentage earned based on collection performance.

In the first five months of the new contract, the 22 collection agency vendors have recovered $48.4 million for the Department of Education.

Coast Professional’s CEO Brian Davis and President Everett Stagg credited their company’s top ranked performance to a dedicated staff.

“We are where we are because of our staff,” Stagg said. “Our goal is to be the best in the business and that begins with our team either through recruiting or development, everything begins inside the team,” Davis added.

Stagg acknowledged that it will be more difficult for Coast Professional to maintain its top ranking, given the larger inventory of accounts it was assigned when compared to peers. But like other collection agencies under contract with the education department, Coast Professionals has added trained staff to meet growth demands and will add more as needed, he said.

Coast soon will begin the next phase of construction on its newly built Geneseo, N.Y. facility. The facility will continue to expand, increasing staff count and management positions, Stagg said.

The Complete Rankings and Account Transfers

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