TAFE SA is looking for a new collection agency that can collect more than $200,000 a month in unpaid fees by tracking down students, visiting their homes and making “demands by phone” for payment.
Photo: Tony Lewis/InDaily
TAFE SA has published a call for tenders calling for expressions of interest in the provision of “debt collection services” from an “external debt collection agency”.
The bid calls for the winning contractor to process approximately 320 TAFE SA debtors per month, equating to an “average monthly debt value” of $220,000.
“TAFE SA has a need for national and international debt collection services for the collection of unpaid tuition fees and corporate accounts,” the tender states.
“TAFE SA’s main debt profiles include domestic students, listed/unlisted companies, organizations, sole proprietorships, small partnerships and the main purpose of the tender is to collect these debts.
“Occasionally, TAFE SA may need assistance in the collection activity of the international student debt portfolio.”
The VET provider, which says the tender was published to replace its existing collections service, which was appointed in 2018, outlines in the procurement document its intention that the new collections service should be “cost neutral for TAFE SA” and based on an “incentive” – based service model”.
“It is expected that the services will be provided through a fee collected by the service provider directly from the student who is the target of debt collection,” the tender reads.
Incidents that could give rise to negative public criticism must be avoided at all costs
“It is important to note that there is no guarantee as to the volume or amount of debt to be transferred over the term of the contract.”
TAFE SA said it could appoint one or more collection agencies to collect unpaid fees, including the state government’s fine enforcement and collection unit. The successful contractor is expected to start work in July.
Another procurement document from TAFE SA states that the commissioned debt collector “may not take legal action against debtors” but must initiate “pre-trial actions to recover claims”.
These actions include “phone inquiries, emails, SMS, field calls [and] skip tracks”.
Skip tracing is a common method used by collection agencies and private investigators to pinpoint the whereabouts of a hard-to-find person. Field visits are a personal visit to someone.
A well-funded TAFE would not require such a cumbersome approach.
TAFE SA further requests that all field operations be “carried out with the utmost professionalism” and that the contractor provide a draft of all debt collection letters and texts.
“Incidents that could give rise to negative public criticism must be avoided at all costs,” says the tender.
Another part of the tender calls on the contractor “to approach debt collection sensitively and understandingly when dealing with low-income students and to take their ability to pay into account”.
However, the successful collection agency is also obliged to recommend TAFE SA to go to court “wherever necessary to recover large debts”.
TAFE SA CEO David Coltman said that it was “standard business practice for higher education providers in Australia” to have a collection agency under contract.
“A large number of the organizations and students we work with each year have circumstances where the recovery of unpaid fees and/or services is required,” he said in a statement.
TAFE SA did not respond to questions about how much uncollected debt it has on its books. There were also no details on the debt collection agency currently under contract and the amount of unpaid fees collected by that agency.
Coltman said TAFE SA halted collections of foreign debt “at the height of the pandemic.”
“During the COVID pandemic, TAFE SA has increased its support for our students. This included students who were in financial distress,” he said.
“At the peak of the pandemic, we paused external debt collection and offered students more flexibility with their fee payments through a variety of initiatives.”
InDaily previously reported on TAFE students being hit with unexpected fees of up to $10,000 after the state government removed a subsidy for their course.
Australian Education Union SA Branch President Andrew Gohl said TAFE’s search for a debt collector was part of a “bigger problem that needs to be addressed”.
“A well-funded TAFE would not require such a cumbersome approach,” he said.
“Vocational training should not only be recognized for [the] role it plays in teaching the essential skills for a range of industries, but also the benefits that this public educational institution and its work bring [for] the broader economy.”
When asked if he would ask the state government to stop looking for a debt collector, Gohl said: “More than that, and also asking the state and federal governments to invest again in TAFE for the common good.”
InDaily contacted Education Secretary Blair Boyer’s office for comment, but received no response before the deadline.
Get InDaily in your inbox. Daily. The best local news every weekday at lunchtime.
Thank you for subscribing to the InDaily newsletter.
TAFE SA’s RFP requires debt collection to be conducted “in accordance with TAFE SA’s current policies and subject to and in accordance with all applicable federal, state and local laws.”
InDaily asked TAFE SA how it intends to ensure compliance by the new contractor. Coltman said it will “work with the vendor to ensure compliance with TAFE SA’s policies and procedures.”
“At TAFE SA, we prioritize supporting all students who are experiencing financial hardship,” he said.
“This includes working with them through individual and personal circumstances, offering installment payments (payment plans), providing support and advice on all social issues, and in some cases helping our students access emergency financial assistance.
related story
News Jemma Chapman
Monday31. May
“The successful debt collection service provider is used as one of several options available to support TAFE SA’s debt collection processes.”
TAFE SA defines outstanding debts as invoices that remain unpaid after going through the training provider’s “collection cycle” and are still unpaid two weeks after a seven-day reminder letter is issued.
Potential contractors were asked to provide a performance indicator outlining the percentage of TAFE SA’s debt that they believe they can collect.
TAFE SA also states that they can recall a claim within two business days “without penalty or fee or application”.
The submission deadline for the call is June 2nd.
Local news matters
Media pluralism is under threat in Australia – nowhere more so than in South Australia. The state needs more than one voice to move it forward, and you can help with a donation of any size to InDaily. Your input directly helps our journalists uncover the facts. Please click below to help InDaily continue uncovering the facts.
donation today
Supported by
press patron
Comments are closed.