Servicing Your Education Loan Portfolio 

Does your school have more than $100,000 in unpaid student loans? If so, I have 2 questions for you?

First, why haven’t you collected it? Perhaps one of the following reasons rings true:

1. It was written off. I don’t think it’s collectible.
2. We have so much going on. There’s no time to focus on defaulted loans.
3. I closed the school/program and don’t know how to proceed.
4. I’m afraid to get in trouble with the regulators.
5. I think the debt collector takes too much money.
6. I don’t know. I haven’t really thought about it.

The truth is, Loan Servicing is not about sending a debtor a threatening letter. Frankly, if you’re not prepared to go to court, you may as well save the postage. Loan Servicing is different. Loan Servicing is about establishing a relationship with the debtor and showing him why paying the school is a benefit to the student. At Sec Outsourcing, we use student loan debt to help the debtor establish a credit history which can enable him to buy a car or a home. By working with the student to service the loan rather than just collecting it, we greatly increase the odds of voluntary payment. Loan Servicing also provides an opportunity to learn about each debtor’s assets and employment situation so that we can determine if there is anything to collect. And if the debtor has something to lien or garnish, the threatening letter and lawsuit now make sense and our collection attorney can move forward on your command.

Many creditors think a loan is not collectible because it has been written off. However, writing off a loan is an accounting requirement, not the end of your relationship with the debtor. Sure, there are laws that govern that relationship, especially if you closed your school or a program in which the student was enrolled. But as long as you follow those laws, there is nothing a regulator can do to you. Outsourcing could be the answer if you don’t have someone on staff who understands debtors’ rights or has time to perform the tedious tasks necessary to service and collect a debt. As far as costs go, what good is that debt doing you now? The loan servicer isn’t going to get as much of the money as you are. Perhaps it would be better to have most of the money than to have none of it.

Second, if your school netted extra money each year from loan servicing, what would you do with it?

1. Advertise to increase enrollment.
2. Take it home. I need the money.
3. Hire a new team member so that I can work a little less.
4. Make improvements to the facility, the faculty, or the programs.
5. Become accredited.
6. I’m not the owner, but I’d ask for a bonus from the unexpected income.

Well, what is stopping you? Sec Outsourcing’s Loan Servicing and Collection Division was established to enable schools to service their defaulted education loan pools without selling the debt or incurring the payroll expenses necessary to employ a competent team well-versed in collection law. Your pool of defaulted loans is an asset. Call Sec Outsourcing and we will help you monetize it.

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