Allied Interstate Top Dept of Ed Collector in November

The top collector of U.S. Department of Education student loans in November was Allied Interstate, earning a recovery rate of 2.39 percent so far in the fourth quarter and bringing in $24.6 million.

Federal Student Aid, the office inside the Dept. of Ed. that administers federally-backed student loans and grants, each month releases the results of returns from its 17 collection service providers. Based on FSA’s point system, Minneapolis-based Allied came out on top after November in the unrestricted category with Pioneer Credit Recovery – a Sallie Mae-owned company – in second place. Pioneer was the leader in total dollars collected in October and November gathering $36.4 million, and posting a recovery rate of 2.35 percent.

The month-to-month performance results are highly variable. The rankings are based on a weighted point system that awards marks under three categories: dollars collected (based on recovery rate percentage), account servicing percentage, and administrative resolution percentage. Monthly results are based on the current quarter’s performance to date. Firms are also classified as unrestricted, which includes the 12 largest firms, and small business, covering five firms that qualified under the small business set-aside provision.

The competition in the student loan collection market is heating up as the Dept. of Ed’s collection contract is up for renewal later this year. The last contract was awarded in 2004. The department is slated to announce new contract winners in September.

The dollar value of the DoE contract is huge with a total of $2.83 billion collected by the 17 agencies since the contract began 33 months ago. Pioneer Credit is the top agency with $384 million collected followed by NCO Group with $288 million collected.

Other high scorers for November in the unrestricted category included Des Plaines, Ill.-based Van Ru Credit Corp. and Houston-headquartered GC Services with recovery rates of 2.24 and 2.21 percent respectively.

In the small business category, Canoga Park, Calif.-based Account Control Technology (ACT) was the top agency earning a 1.91 percent recovery rate and collecting $6.7 million in the first two months of the fourth quarter. Fairport, N.Y.-based Conserve followed closely, edging ACT with a 1.96 percent recovery rate and collecting $8.5 million in October and November. ACT had perfect scores in the account servicing and administrative resolution categories, propelling it to the top spot.

Financial Management Systems placed third in the small business category followed by Premiere Credit and Collection Technology, Inc.