ED Collector ACT Outgrows Small Biz Slot

Collector Account Control Technology has grown from a small business to one that will have to compete with the largest collection agencies for the next U.S. Department of Education contract.

ACT has been categorized as a small business by ED, working collections of its student loans for the last 34 months. ED defines a small business as one with less than an average of $6.5 million in gross income in the previous three years.

Beyond the ED contract, Canoga Park, Calif.-based ACT works with colleges and universities, state educational guarantee agencies, and private education lenders, said ACT President Don Taylor. “We’re expanding in all four areas.”

That expansion has enabled the 17-year-old privately held company to double its revenues over the last three years, said Taylor, who declined to provide specific financial figures. Taylor credits his firm’s growth to an experienced staff and company.

“You have to have good people,” Taylor said. “There is no single model [work experience] for a successful person. To be successful, a person has to have a good attitude, good character and a good work ethic.”

If a person has those three attributes, he or she can be trained, regardless of background, to be a successful collector, Taylor said. But even if a person is successful, he doesn’t always stay at a firm.

The company expects to double the number of staff at its San Angelo, Texas office from 20 to at least 40 by the beginning of the second quarter of the year and to 90 by the end of the year. The additional personnel are needed for the company to successfully bid on the next ED contract, Taylor said.

ED’s Federal Student Aid division will hold a conference on the contract next week in Washington, D.C.

Taylor credits the company’s locations, which also includes Bakersfield, Calif., and its headquarters in Canoga Park, as one of two important factors in attracting and keeping good staff. Headquarters houses administration and marketing personnel.

The other important factor in employee retention, Taylor said, is training staff in customer service techniques. Collections should be approached like sales, he explains. When selling a car, both seller and buyer are trying to negotiate the best deal. Collections isn’t much different, he explained.

“You’re trying to help people [debtors] solve a problem,” Taylor added. “So screaming and yelling don’t work.”

Instead, the collector has to be a negotiator and counsel the debtor on how to best meet the obligation, avoid more serious consequences like a poor credit rating or garnishment of wages by the government (in the event of a ED-related default) and how best to meet the payment obligation, said Taylor.