Dept of ED Performance Rankings Reflecting New High-Stake Account Placement Rules

Pioneer Credit Recovery, Inc. once again outperformed its peers in April in the U.S. Department of Education’s student loan debt collection contract competitive performance report.  But Allied Interstate moved up five spots to capture second place, while Financial Asset Management took third among unrestricted contractors.

NCO Group, the world’s largest account receivables management firm and former second ranked performer, fell to the seventh spot in April, while former third ranked Van Ru Credit Corp. dropped to fourth place.

Rankings also changed among small business contractors in April. Collection Technology Inc. overtook Coast Professionals for first place, while Immediate Credit Recovery moved up two spots to third place, supplanting Delta Management Associates, Inc., which fell to fifth place.

April’s rankings may reflect the higher stakes now associated with the student loan debt collection contract. No longer are contractors guaranteed an equal number of accounts in their category.  On April 25, the education department began issuing placements based on contractors’ overall performance rankings between October 2009 and March 2010, giving the contractor with the highest overall ranking a higher percentage of available accounts. When the department places accounts in June, it still will use the rankings compiled from that period.  But the next round of placements will be based on contractors’ performance between April and June 2010, and thereafter on their quarterly performance.

The ED debt collection work is separated into two contract categories: small business and unrestricted. Scores are based on a weighted average of performance metrics, including total dollars collected, total accounts serviced and administrative resolutions. The top performer in each category receives the maximum points awarded for that category. The other agencies are scored against the top performer. Out of 100 total available points, there are 70 points available for dollars collected, 20 for total accounts serviced, and 10 points for administrative resolution.

Everett Stagg, President of small business ED collection contractor Coast Professional, told insideARM.com in April that it would be more difficult for contractors to maintain their top ranking, given the larger inventory of accounts assigned when compared to peers ("Dept. of ED. Releases Important Collection Performance Report," April 29).

Pioneer, based in Arcade, N.Y., easily maintained its top spot among contractors in the unrestricted category in April with an overall score of 98.82 and $1.3 million collected on 5,782 accounts serviced.  Well below Pioneer was a tight grouping of five unrestricted collectors. Allied scored 81.50 and collected over $1 million on 4,887 accounts serviced, while Financial Asset Management scored 81.44 and collected $1.1 million on 3,940 accounts serviced. 

On the small business set aside, Collection Technology scored 98.23, collected $451,836 and serviced 2,054 accounts. Coast Professional scored 94.93, collected $447,936 and serviced 1.635 accounts, while Immediate Credit Recovery scored 81.91, and collected $416,407 on 1,087 accounts serviced.

During April, all contractors collected $18.6 million.  Since the beginning of the contract in late 2009, the 22 collection agencies have recovered $67 million for the Department of Education.

Here’s a closer look at the results for April:

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