Debt counseling leading to 2X debt recovery on student loans

The challenge: Reversing declining student loan debt recovery

Our client, a student loan provider was facing a surge in student debt and loan defaults due to COVID-led economic challenges which seemed set to deliver a tsunami of debt delinquency.

Debt collection is one of the most regulated business practices in the US governing recovery activities and prohibits harassing and abusive collection practices.

Also, rehabilitating student debt in default requires a deft touch because of the public dialog around debt forgiveness.

The client’s key challenges were reversing declining debt recovery rates on student loans and reaching out to students at-risk of default all while preserving the relationship between the institution and its students and being fully complaint.

The solution: An empathetic, digital-first collections approach

We deployed our Digital Collections solution which combines automation and analytics with the human touch to build an empathetic and efficient collection process.

Successful debt collection demands seamless orchestration of multiple moving parts — from self-service digital solutions to fully complaint campaigns to default aversion counseling.

At the outset, we developed a customized, data-driven strategy to debt counseling, default prevention, debt management and recovery.

Then a scalable delivery model using on-shore and off-shore staffing was implemented to meet client requirements for volume with 154 FTEs being recruited.
Establishing a new operation required extensive training to ensure associates were knowledgeable in permissible collections practices and well-practiced in empathetic debt collection. All associates were trained in compassionate debt collection and default aversion counseling to help students avoid the stigma of default.

We also developed a propensity-to-pay model through applied analytics that enabled associates to focus on accounts and customers that have higher repayment propensity.

Integration of systems across platforms enabled associates with a unified view to help offer the best-possible solution to students.

The result: Doubling recovery performance while improving student experience

There was marked improvement in productivity as the average debt resolution per associate more than doubled, from 12 to 25 accounts per month. We reduced training time for associates from eight weeks to four weeks.

With compassion at the heart of our approach and fully compliant campaigns, we consistently delivered customer satisfaction scores of 99.5%.

Highest office rating in the debt recovery network was achieved for resolving defaults, compromises, and consolidations ” doubling the productivity of the next highest rated office.