End of Quarter ED Collection Results Offer No Surprises

The competitive results for the third quarter in the Department of Education’s student loan collection contract offered little in the way of surprises as the top collection agencies continued to perform at the highest level.

Pioneer Credit Recovery was the top-performing collection agency for the Department of Education once again, with $60.7 million collected in the third quarter. Pioneer also won the points race on the unrestricted contract for the quarter.

ED’s performance scores are based on a weighted average of performance metrics, including total dollars collected, total accounts serviced and administrative resolutions.

In the third quarter, NCO Group finished second to Pioneer on the unrestricted contract, with Allied Interstate finishing third but edging NCO in total dollars collected with $43.8 million compared to $43.7 million for NCO.

On the small business set aside contract, given to five small collection agencies, Premiere Credit was both the points leader and the highest-grossing collector, bringing in $17 million in the third quarter. Account Control Technology finished second in both measures.

The 17 accounts receivable management firms on the ED collection contract have taken in $4.48 billion for the department in the 43 months of the contract so far. Pioneer has brought in the most of all agencies with $598 million collected, while Continental Service Group leads the small business set aside with $143.9 million collected.

Collection agencies on ED’s student loan collection contract are awaiting word of whether they will continue on the lucrative engagement. The department has delayed the award announcement of a new contract slated to begin early next year (“ED Collection Contract Award Pushed Back Again,” Oct. 7). Meanwhile, 26 collection agencies have been approved to bid on the new contract and are also awaiting the announcement.

The current collection contract, awarded in 2004, was scheduled to expire in March 2009. But ED said that it will extend the current contract terms for up to six months for the top performing agencies.

An announcement on the new collection vendors is now expected in November or December.