Publication Date: June 19, 2001
Author: General Manager: SFA Student Channel
Summary: SFA Community Announcements 6/18/2001
SFA Community Announcements
Student Financial Assistance, U.S. Department of Education
June 18, 2001
For more info: Gary Hopkins
SFA Passes $1 Billion in Recovered Debts
Ahead of both last year's pace and this year's expected pace, the Students Channel of the Office of Student Financial Assistance (SFA) announced on June 5 that, in combined recoveries from its own efforts and private collection agencies, it has collected more than $1 billion in Title IV defaulted debt for fiscal year 2001.
This marks the fourth consecutive year that the recovery pace has increased from the preceding year. SFA collected more than $1 billion in each of the last three fiscal years but never this soon.
"This is terrific news," said SFA's Chief Operating Officer Greg Woods. "We have made a commitment to making our debt recovery methods more effective by focusing our own efforts and partnering with private collection agencies, and it appears to be paying off."
This year's accomplishment is especially significant because SFA has been in a contract transition period with its private collection agencies. Every few years, SFA renegotiates contracts with its private industry partners, resulting in significant changes in the lineup of agencies that are used. A change usually results in lost recoveries while our new partners get accustomed to working our portfolio, as it did the last time SFA negotiated new contracts in FY1997.
SFA worked together with its staff and private collection agencies to overcome the obstacles of contract transition. Such cooperation, especially during a transition period, resulted in collection agencies increasing their collected debt by more than $58 million compared to last year at this time.
SFA itself has been taking major steps to improve its debt collection techniques. For example, SFA's partnership with the Department of Health and Human Services to match data with the National Directory of New Hires database has brought in about $57 million since January.
SFA passed the $1 billion mark one week ahead of projections and two weeks earlier than FY2000. The pace this year is $60 million ahead of last year, when the $1 billion mark was crossed on June 16.
Even before this announcement, the U.S. General Accounting Office (GAO) said they would use SFA's debt collection methods as an example of the "best practices" of debt collection in government as part of their report to the House Government Reform Committee in September.
The report on June 5 brought SFA within $300 million of its recovery goal for FY2001, with combined recoveries from all sources totaling $1,012,485,941.
SFA is the office of the U.S. Department of Education that helps put about 8.7 million Americans through school each year, administering Title IV student loans and grants totaling about $54 billion a year. As a Performance-Based Organization, SFA strives to improve customer satisfaction while cutting the costs of administering student aid programs. For additional information on student aid, call 1-800-4-FED-AID, visit our Web Site at http://ed.gov/offices/OSFAP , or go to http://fafsa.ed.gov.
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