NCO and CTI Take Top Quarterly Spots on ED Collection Contract

The top three rankings on the U.S. Department of Education’s student loan debt collection contract performance report were unchanged in September among small business and unrestricted contractors. But the point spreads separating the competitors narrowed a bit, particularly among the unrestricted contractors, which affected end-of-quarter new account placements.

NCO Group captured the top spot among unrestricted contractors during the quarter, earning 98.24 points. It was the third consecutive month the world’s largest accounts receivables management company finished first in the rankings giving it the quarterly win. The performance guaranteed NCO the largest number of new placements, specifically 44,175 new accounts, from among the 472,754 transfers ED distributed earlier is month.

"The new DOE contract has created a very competitive environment among the collection agencies, as we race against each other each quarter,” said Carolyn Moore, senior vice president who manages the ED contract at NCO. “When you are competing with the best student loan agencies, it is always an honor to finish on top.  The collection and management staff at NCO take great pride in their achievements and ranking.”

Van Ru Credit Corp. finished second among unrestricted contractors, just ahead of Sallie Mae-owned Pioneer Credit Recovery. Both companies earned a similar number of account placements for their efforts because the ED contract stipulates that agencies that score within 50 basis points of each other are deemed to have tied. During the performance period, Van Ru scored 94.89, netting it 30,682 new accounts, while Pioneer scored 94.60 and received 30,589 new accounts.

ED’s performance scores are based on a weighted average of total dollars collected; total accounts serviced and total administrative resolutions. The top performer in each category receives the maximum score for that category, and the other agencies are scored against the top performer. The department awards 70 points for dollars collected to the top performance, 20 points for total accounts serviced, and 10 points in the administrative resolution category.

Collection Technology Inc., was the clear winner among small business contractors during the third quarter.  CTI’s 97.82 point score was well ahead of second place-finisher Coast Professional Inc., which scored 85.37 points.  National Recoveries, Inc. rounded out the top three with a score of 69.21.  For their efforts, CTI received 17,470 new accounts, Coast earned 13,700 and National Recovery received 11,106 new accounts.

“We were excited this time around to put some distance between us and the competition,” said CTI president Chris Van Dellen. “Our staff is going to have to up its game to maintain it.”

Van Dellen said rehabilitated loans made the difference this quarter for CTI. Rehabilitated loans are accounts that have nine qualifying payments over 10 consecutive months. Once a rehabilitated loan reaches that threshold, its total balance is factored into the scores. Collectively, those loans can add millions of dollars to an agency’s dollars collected balance. Rehabilitated loans accounted for more than half of the total dollars collected by CTI since the contract began 11 months ago.

Among unrestricted contractors, Pioneer Recovery has collected the most dollars during the first 11 months of the contract – nearly $26 million vs. NCO’s $24.2 million.  But NCO had a slightly higher recovery rate – 2.70 percent vs. Pioneer’s 2.68 percent, helping NCO win the full 70 points. 

During the first 11 months of the contract, all 22 companies (17 unrestricted and five small firms) have collected more than $352.8 million for the Department of Education.

Third Quarter ED Collection Performance Report