New Performance Award Announced for ED Student Loan Debt Collection Subcontractors

Fed Cetera, LLC, today announced the creation of a new performance award for small businesses participating in the U.S. Department of Education (ED) Private Collection Agency (PCA) contract as subcontractors. The Robert J. Prince Award is named after the student loan collection industry maverick of the same name, a man whose presence and impact was felt for decades in the industry, and whose dedication to growth, performance, and integrity was unsurpassed in his field.

The inaugural award will be given to a small business subcontractor whose exceptional performance, provided in a compliant environment, has had a substantial impact on performance for ED among small businesses in the previous year.  The 2014 award will be given to its first recipient at a to-be-announced event put on by Fed Cetera and likely to take place in the Washington, DC, area early next year.

Due to provisions in The Affordable Care Act of 2009 making ED the direct lender of future Federal student loans, ED’s total receivables are on the rise, as documented in a report published by the Department of the Treasury in March of 2013 and available as a free download here. Between fiscal years 2011 and 2012, they went up by 27.5%, from $504.7 billion to $643.3 billion, while delinquent dollars went up also by more than $120 billion, or 30.5%.   According to documents found at www.mygovwatch.com, ED PCAs were paid nearly $500,000,000 in 2012, and ED’s own data projects its PCAs will be paid $700,000,000 per year by 2015.

As a part of the ED program, large PCAs are incentivized to subcontract a substantial part of the work out to small business subcontractors. At a rate of 10%, this could result in fees to small business subcontractors of $70,000,000 per year by 2015.  Fed Cetera helps companies of all sizes tap into subcontracting opportunities related to this Federal contract, as described here.  ED’s procurement, which will result in additional subcontracting opportunities for the next five or ten years due to the anticipated term of the contract, is expected to start any day now.

Mr. Prince commented, “I am honored to have my name on an award that is representative of the tenets that I supported for over 45 years in the collection industry.  I am often asked by smaller agencies: What is the key to growing a business?  I remind them that the one constant in our business is consistency to purpose.  Don’t try to make or market something you are not. Develop a niche market and stay constant to it. Develop a relationship with your clients by having a good work ethic, being straightforward and honest with them, and give them the feeling that they are your company’s most important client.  Also, develop external civic and community relationships. You will be rewarded for it.”

Mr. Prince spent his entire career in the collection industry, with emphasis on the student loan segment.  His career started in 1969, and included long stints with companies to include Financial Collection Agencies and NCO Financial Systems prior to spending the last several years as a consultant before his final retirement last year.  He now enjoys golfing, carpentry, and painting, lives in suburban Philadelphia, PA, and serves on the board of several organizations that advocate for the rights of individuals with intellectual and physical disabilities.