Bloomberg Businessweek is reporting that Educational Credit Management Corporation, an IRS educational charitable nonprofit group, paid Joshua Mandelman, a student loan debt collector for ECMC, nearly $500,000 in a single year.
ECMC’s debt collectors earn bonuses as a reward for extracting money from defaulted borrowers. In 2010, the bonuses for top performers amounted to as much as 10 times their base salaries, which ranged from about $33,000 to $46,000, according to the company’s tax return.
“By law, the organizations can receive as much as 37 percent of a borrower’s entire loan amount, half in collection costs and half in taxpayer-funded commissions. ECMC says it typically collects 31 percent, or $7,750 on a $25,000 loan. That’s 31 times what it can make for preventing the default through counseling.”
You can read the full article here.
According to the last publicly available tax return for the organization the company had $162,269,817 in revenue in 2010.
Additional collections staf, apparently labels as “Account Specialist” on the tax return made substantial amounts as well. Megan Howe – $254,339, Joshua Mandelman – $424,630, David Peterson – $357,064.
The tax return says that to earn this money, the debt collectors worked on average of 41 hours per week. I suspect someone isn’t telling the whole story here.
Heck, Carey Dubbs is reported as the V.P. working 12 hours a week and made $210,938. I want one of those jobs.
CEO Richard Boyle is reported to work 17 hours a week for this nonprofit charitable company and get paid over a million dollars a year. Even the other board members, who report working less than an hour a week, earn on average about $77,000 a year.
The tax return also lists grants the company received. They really took $25,000 from the Oakdale Police Explorer post? Seriously? What in the world is a police explorer post doing giving money to a student loan debt collection agency to provide them with “general support.”
But not to leave you with the impression this charity is totally heartless, they do list they gave a College Access Scholarship to one person for $2,575.
Their stated mission certainly sounds very similar to what credit counseling groups say.
ECMC SPONSORS PROGRAMS TO HELP STUDENTS AND FAMILIES PLAN AND PAY FOR COLLEGE WE WORK WITH SCHOOLS AND LOAN SERVICERS TO LOWER STUDENT LOAN DEFAULT RATES, PROMOTE FINANCIAL LITERACY AND PROVIDE RESOURCES TO SUPPORT STUDENT LOAN BORROWERS TO SUCCESSFULLY REPAY THEIR LOANS
In total, the tax return lists 29 people who made $160,000 to over $1,000,000 in 2010.
The company has a hand in a number of related for-profit companies as well. ECMC Group, ECMC Holdings, Oakdale Student Loan Funding, ECMC Technology Service, ECMC Credit Services, ECMC Records & Receivables Management, ECMC Solutions and Premiere Credit North America.
You can read the entire tax return here.