2808.01.07.02  COLLECTION AGENCIES

If the institution is unable to perform the full range of collection activity with 
its own personnel, it must retain a collection agency for those services.

1.	Selection

References:  34 C.F.R. 674.49; NACUBO/SLCP, pp. 18-19; NASFAA 
Encyclopedia 5.9.6.1.

A thorough analysis should be performed when considering contracting with 
an outside agency.  Only bondable, reputable agencies with a demonstrated 
ability to service the accounts should be considered.  Within the CSU system, 
the process of selecting collection agencies is centralized. The office of 
Auxiliary and Business Services (ABS) solicits responses (bids) from 
interested agencies by issuing a Request for Proposal (RFP) with specific 
criteria to be met by the agencies. In conjunction with several campus 
representatives, ABS evaluates bids and awards contracts.  The campus may 
review responses before selecting one or more of the approved agencies.  The 
agency must not be commonly owned or controlled by a billing service 
currently being used by the institution.

2.	Monitoring

Reference:  NACUBO/SLCP, pp. 19-20.

The institution should monitor the agency's performance in terms of 
diligence in pursuing collection, percentage of dollars recovered, accuracy of 
account inventories, proper and timely submission of reports and 
remittances, and general quality of service.

3.	Litigation

Most often, the agency will determine the appropriateness of filing legal 
action as outlined in SUAM Paragraph 2808.01.07.01 (5) above; however, the 
institution retains responsibility for authorizing suits based on the agency's 
findings.  After obtaining campus authorization, the agency must obtain 
further approval for proceeding with litigation from the Chancellor's Office.

4.	Costs

Reference:  34 C.F.R. 674.47, NACUBO/SLCP p. 56, NASFAA Encyclopedia 
5.9.7.

If collection costs are not paid by the borrower, those costs are considered 
chargeable to the fund.