Agencies Collect $3 Billion on ED Contract

The 17 collection agencies on the U.S. Department of Education student loan contract have collected just shy of $3 billion in 34 months.

By all measurable standards, Arcade, N.Y.-based Pioneer Credit Recovery is the top-ranking agency in the unrestricted, or large business, category, bringing in $410 million for ED. Pioneer, a subsidiary of Sallie Mae, has the highest cumulative total points awarded under a weighted scoring system and has the highest average ranking over the course of the contract. Pioneer has collected at a 7.85 percent recovery rate.

Horsham, Pa.-based NCO Group is in second place over the length of the contract in the large business category, having collected $305 million, followed by Livermore, Calif.-based Diversified Collection Services (DCS) with $284 million collected.

There are 12 firms in the large business category. ED also categorizes firms with average annual revenues under $6.5 million as small businesses. The leader among these five firms was Fairport, N.Y.-based Continental Service Group (ConServe), having collected $94 million in 34 months. ConServe has been the top performer over the length of the contract based on both cumulative points and average ranking. ConServe’s recovery rate has been 6.34 percent.

Closely behind ConServe on the small business side was Canoga Park, Calif.-based Account Control Technology (ACT) — which has collected $74.2 million — followed by Schaumburg, Ill.-based Financial Management Systems (FMS), with $70.4 million collected.

For the full year 2007, ConServe was ranked first, with Indianapolis-based Premiere Credit of North America placing second and ACT taking third. Pioneer was the winner for 2007 in the unrestricted category, with NCO next, Minneapolis-based Allied Interstate taking third, and Houston-based GC Services in fourth place for the year.

ED released year-end and contract-to-date rankings of its collection vendors working on the student loan contract directly in advance of a conference on the contract’s renewal, scheduled for next week in Washington, D.C. The collection agencies in the unrestricted category have brought in a total of $2.65 billion and agencies in the small business category have collected $340 million.

The Education department’s Federal Student Aid division administers federally-backed student loans. It will hold a pre-solicitation conference January 22 in Washington that is designed to prepare collectors for the contract that is scheduled to be awarded later this year. Today is the last day to register. Click here for more information on registration.

FSA Wednesday also released a draft of its request for proposal for the collection contract, a statement of work for the contract, and an updated FAQ section. The documents can be found at http://www.pca.ed.gov/.