ED Collectors Vying For Contract Extension on Q2 Performance Report

The collection agencies on the U.S Department of Education’s student loan collection contract stepped up their performance in the second quarter of 2008 with a spot on the current contract’s extension is at stake.

There were few changes at the top of the large business contract as Pioneer Credit Recovery was the top ranked collector on the unrestricted contract. Premiere Credit was the top ranked agency on the small business contract, a spot it hasn’t held over a quarter since the second quarter of 2007.

On the unrestricted contract, NCO group finished second to Pioneer for the quarter, followed closely by Diversified Collection Services (DCS). Pioneer collected $59.75 million for ED in the second quarter, with NCO bringing in $48.5 million and DCS collecting $48 million. Pioneer leads all agencies on the contract with $537.3 million collected over the 40 months of the contract.

Premiere won the quarterly competition on the small business set aside, but Continental Service Group (Conserve) collected more in the quarter: $15.6 million compared to Premiere’s $14.6 million. ED’s monthly scores are based on a weighted average of performance metrics, including total dollars collected, total accounts serviced and administrative resolutions.

The collection agencies at or near the top of the rankings stepped up their performance in the second quarter as ED announced in April criteria for contract extensions on the current task order (“ED to Extend Current Collection Contract for Only a Few,” April 21). Companies that average at a quarterly score of at least 80 for 2008 will most likely be asked to continue their work on the current contract.

The current student loan collection contract, which has 17 collection agencies actively working ED accounts, will expire on March 31, 2009. The terms of the contract call for a six-month optional extension for selected collection vendors. The extension is intended to help serve as a back-up for new collection agencies coming into the program after a new contract is awarded in September of this year.

In the first quarter of 2008, six companies had the required score to qualify for the contract extension – four on the unrestricted contract and two on the small business set aside. In the second quarter, that total rose to seven, with three on the large company contract and four on the small business side. One company on the small business set aside, Collection Technology, Inc., barely missed the cutoff with a score of 79.67.

The three unrestricted contractors that scored at least an 80 – Pioneer, NCO and DCS – increased their quarterly scores, all scoring above 90.