Pioneer and ACT Top ED Performers for Fourth Quarter

Pioneer Credit Recovery and Account Control Technology were ranked as the top performers on the Department of Education’s student loan contract for the fourth quarter of 2007, according to the latest rankings released Friday by ED’s Federal Student Aid division.

Pioneer, based in Arcade, N.Y. and owned by Sallie Mae, was the top performer in the unrestricted, or large collector, category overwhelming the competition with $62.6 million collected in the fourth quarter with a 4.05 percent recovery rate. The next-closest agency, Horsham, Pa.-based NCO Group, brought in $45.1 million. Canoga Park, Calif.-based Account Control Technology (ACT) took top honors in the small business category, bringing in $10.9 million in the fourth quarter of last year on a recovery rate of 3.10 percent.

A leading quarterly ranking is vital to the collectors, as it determines bonuses for the firms, ACT President Don Taylor told insideARM. In every quarter, bonuses are awarded to the top two small-business performers and the top three agencies in the unrestricted category.

The quarterly rankings are not based on dollars collected alone. Other criteria, such as total accounts serviced and administrative resolutions are also considered. And the dollars collected criterion is based on recovery rate rather than total dollars. Seventy percent of an agencies score is based on recovery rate, 20 percent on accounts serviced rate, and the remaining 10 percent on administrative resolution percentage.

After all of the weighted factors were calculated, Pioneer still came out on top in the unrestricted category with Allied Interstate – a division of iQor, Inc. – in second, Atlanta-based Financial Asset Management Systems (FAMS) in third, and NCO coming in fourth overall.

ACT edged Fairport, N.Y.-based ConServe for the small business lead. ConServe came in second, but had the highest dollars collected total at $13.45 million and a recovery rate slightly better than ACT’s at 3.11 percent. Schaumburg, Ill.-based Financial Management Systems (FMS) placed third for the quarter.

“I knew it was going to be really close, but I thought we were going to be number one,” said Taylor. He attributed much of his firm’s success last quarter to accounts they had started rehabilitating late in 2006 and early last year. The rehabilitation process allows a collection vendor to set up a payment plan with a consumer. The collector gets credit for recovered dollars when the consumer makes a certain number of monthly payments.

CORRECTION: A previous version of this story noted that FMS was based in Tulsa, Okla. The FMS that collects on the ED contract is based in Schaumburg, Ill.