Client:
A Midwestern community college with a student population of more than 20,000
Challenge:
Like any university, student indebtedness is an ongoing problem. Outstanding accounts arise when students default on anything from loan payments to parking tickets or text book costs. Not only do these accounts add up for the university, but students can be forced to leave school when confronted with sizable debts they cannot pay.
The college primarily performed collections internally. But without third party authority, they generally obtained minimal results. For accounts they couldn't collect, they used an agency that charged upwards of 35%. So to avoid the high cost, the college held onto accounts until they'd aged significantly. Age is the greatest deteriorating factor in a debt's collectability, so the agency generated a recovery ratio of just 20%.
The challenge was to break the cycle. To improve internal procedures so that fewer accounts ever needed to be placed with a third party. And to provide an economical solution so it would be attractive to use an agency early when efforts are most effective.
Solution:
TekCollect implemented two custom levels of service designed to recover small and large balances. Our low fixed fee meant the college could afford to place accounts early, ensuring optimal results. This also allowed them to focus internal efforts on slow-pays, so fewer debts ever made it to 60-days and required our services. Early placement also ensured that students were notified of their debts in a timely manner, reducing the number of drop-outs.
Since 1998, the college has placed 17,000 accounts totaling over $7 million. TekCollect has recovered $3.5 million for a 43% recovery ratio. The national average is just 17%. Additionally, our fixed fee resulted in a collection cost of between 6 to 7.5%. That's in comparison to the 35% fee the previous agency charged. The college has dramatically reduced delinquencies, streamlined internal procedures and cut costs, and continues to be a very satisfied client.
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TekCollect Corporation
1111 Schrock Road
Suite 100
Columbus, OH 43229
614.410.3800
Toll free 866.414.4500
Fax 866.835.6400
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