Coast Professional in limbo after feds pull contract
The future of Coast Professional, the student loan collections agency, and its 100 employees in West Monroe is unclear after the U.S. Department of Education's decision to terminate its contract with the firm.
Officials with the U.S. Department of Education announced last week the agency will "wind down" contracts with Coast Professional and five other private collection agencies the feds said were providing inaccurate information to borrowers.
Everett Stagg, Coast's chief financial officer and co-chairman of the company, said in an email to The News-Star Friday the firm's legal team in Washington, D.C., is preparing a response to the decision. He declined to comment further.
The other companies losing U.S. Education Department contracts include Enterprise Recovery Systems, National Recoveries, Pioneer Credit Recovery and West Asset Management.
Officials with the U.S. Education Department said a months-long review of all its private collections agencies found agents of the companies made materially inaccurate representations to borrowers about the loan rehabilitation program.
The rehabilitation program is an option that can create benefits to defaulted borrowers after they have made nine on-time payments in a period of 10 months. Officials said the five private collection agencies gave inaccurate information at unacceptably high rates about the benefits.
In particular, the agencies gave borrowers misleading information about the benefits to the borrowers' credit report and about the waiver of certain collection fees, the U.S. Education Department's press release said.
"Federal Student Aid borrowers are entitled to accurate information as they make critical choices to manage their debt," Undersecretary Ted Mitchell in a press release. "Every company that works for the department must keep consumers' best interests at the heart of their business practices by giving borrowers clear and accurate guidance.
"It is our responsibility – and our commitment – to uphold the highest standards of service for America's student borrowers and consumers."
Officials said the department will reassign accounts held by the five agencies that aren't already in repayment to other agencies.
Coast Professional, which opened its West Monroe office in 2007 with 10 employees, has created a high profile as a company on the rise in northeastern Louisiana.
The firm earned a spot on Inc. magazine's 5,000 fastest growing U.S. companies in 2012.
Coast earned the 2012 Spirit of Distinction Award as part of the Thomas H. Scott Awards of Excellence, a program presented annually by The News-Star, DeltaBusiness magazine, the Monroe Chamber of Commerce and the University of Louisiana at Monroe College of Business. It also won a Scott Award in 2011.
Last year Coast Professional earned the Community Champion Award during the West Monroe-West Ouachita Chamber of Commerce Small business Awards program for its community service and giving.
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