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About Us
Client

A Midwestern community college with a student population of more than 50,000.

Challenge

Like any university, debt is an ongoing problem. Outstanding accounts arise when students default on loan payments, parking tickets, text book purchases and more. Not only do these accounts add up for the university, but students can be forced to leave school when confronted with sizable debts they can’t pay.

This institution primarily pursued collections internally. But without third party authority, the results were negligible. For accounts they couldn’t collect, they’d use a collection agency that charged upwards of 35%. To avoid the high cost, the college held onto accounts until they’d aged significantly. Age is the greatest deteriorating factor in collectability, so the agency provided a recovery ratio of just 20%.

The challenge was 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 we could generate 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 delinquencies and ultimately, drop-outs.

Over the last decade, the college has placed 19,500 accounts for a total of $11-million. TekCollect has recovered $4.8-million for a 44% recovery ratio. (The national average is just 16%.) Our fixed fee ensures a collection cost of about 7%, compared to the 35% fee the university’s previous agency charged. The college reduced overall delinquencies, streamlined internal procedures and cut costs. And with our service, they’ve maintained those outstanding results over the long term.

© 2009 TekCollect Corporation