Eight years ago Continental Service Group, Inc. (ConServe) set out to become an unrestricted contractor for the U.S. Department of Education (ED). It is a lofty goal worthy of pursuit given its potential rewards.
ED says its Federal Student Aid (FSA) program is the equivalent of the 9th largest bank in the U.S., with a loan portfolio in excess of $100 billion. It can provide more than $50 billion in financial aid every year to postsecondary students, including more than $30 billion in new loans and more than $7 billion in Pell Grants. Snagging a federal student loan contract with ED can significantly boost a company’s collection portfolio and its visibility, setting contract winners on the path to exponential growth.
In January, Fairport, N.Y.-based ConServe reached its goal, being named one of 17 unrestricted contractors tapped to help the FSA collect billions in delinquent student loans (“ED Announces Debt Collection Contract Winners in Unrestricted Category,” Jan. 9).
“It’s very rewarding to have a long term goal come to fruition,” ConServe’s CEO Mark Davitt told insideARM.
Coast Professional, Inc. (Coast) COO Everett Stagg echoed those sentiments. In March, the company learned it was one of four new small business contractors selected for the ED contract (“Department of Education Names Small Business Collection Contractors,” March 11), which could significantly boost the company’s revenues and client portfolio over the next few years.
“You will have an opportunity to work with other high profile clients if you do a good job. And you have the ability to expand,” Stagg said.
That has certainly been ConServe’s experience. The company has worked in student loan debt collections since 1985, but mostly on a regional level before receiving its first ED contract in 2004. Davitt expects ConServe’s new four year contract with ED will help take the company to a whole new level in the student loan collection space.
ED’s 17 unrestricted ED contractors will work 88 percent of the ED’s delinquent student loan debt. And because placements are competitive and performance based, the better a company performs the more business it can earn.
“Our goal is to be the top performer on this contract,” said Davitt, who added that ConServe had to demonstrate it had the financing backing to support the business growth the contract brings.
ConServe’s competition includes heavyweights NCO Group. and Pioneer Credit Recovery, Inc. Conserve has already demonstrated it can deliver on the contract; the company obtained the ED’s top performance ranking and has been the ED’s top rated agency among small business contractors.