January 10, 2013
Core Recoveries reaches $20 million in student loans collected
This week, Louisville-based Core Recoveries LLC, which specializes in student loan collections, reached $20 million worth of loans collected, said executive vice president and chief operating officer Thomas Wantuck.
That was a significant milestone for the company, which was created in April 2011 and now employs 14 full-time workers plus several part-time workers and contractors, Wantuck said.
Unfortunately, there is no shortage of debt to collect, he said, because the student loan default rate nationally has skyrocketed. In September, the U.S. Department of Education reported a three-year default rate of 13.4 percent nationally.
Core Recoveries gets most of its student loan business from being a subcontractor for Omaha-based West Asset Management, a large prime contractor for the Education Department. But it also does student loan collections for Louisville-based ATA College, which trains students for healthcare support careers, and debt collections for some private companies.
As Business First reported in August 2011, Wantuck and two other former employees of the Kentucky Higher Education Student Loan Corp. formed Core Recoveries to become a prime contractor for the Education Department and bring 200 jobs to Louisville. The company still is waiting to bid on a prime contract, Wantuck said, and he expects the department to offer one for bids later this month, with the award to be made this summer.
The company is making a profit, Wantuck said, but most of that money has gone back into the business in order to prepare for the expected government contract.
“We believe we have a great chance to land the federal contract,” he said, in part because of the work the company has done as a subcontractor.
If the company does win the prime contract, federal law requires that it pay its debt collectors at least $30,000 a year plus $7,200 worth of benefits, Wantuck said. Those are pretty good wages for someone with just a high school education who can collect debts, he said.
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