A nonprofit firm contracted by the federal government to collect student-loan debt paid its top executive $1.1-million and a high-performing employee $454,000 in 2010, says Bloomberg.
Educational Credit Management Corp., or ECMC, is one of 32 “guaranty agencies” that oversee student loans for the Education Department, guarantees loans and reaping taxpayer-supported commissions as high as 31 percent when it collects from a defaulter.
The company’s revenue has tripled to $168-million since Richard Boyle became CEO in 1999, and his pay has risen four-fold since 2002. Its collectors are eligible for bonuses of up to 10 times their regular salaries, and five earned more than $400,000 in 2010.
Robert Shireman, a former deputy undersecretary of education in the Obama administration, said the government’s guaranty program “is enriching collection agencies and undermining a goal we all want for society—to encourage people to go to college.”
ECMC officials said the firm is helping to keep U.S. college-aid programs afloat, returning $4.3-billion to federal coffers in the 18 years it has been a contractor and working with indebted borrowers to craft affordable payment plans and repair their credit. “I’m really proud of what we do as an organization,” said Dave Hawn, the company’s chief operating officer.