Author: Matt Kulik

How Student Loan Debt is Impacting the Debt Collection Industry

By on August 8th, 2025 in Industry Insights, Customer Experience, Machine Learning
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The path to getting a higher education is a courageous decision that millions of Americans start each year when attending college. It sets the foundation for countless careers and drives personal growth that lasts a lifetime. However, education is expensive and paying back the loans can be challenging—an estimated 5.8 million student loan borrowers have delinquent accounts. 

This number could get even higher with student loan forgiveness ending, interest on the debt resuming and shifts repayment options. Student loans and debt collection servicing have always shared a close relationship. And the current changes to the federal student loan system is primed to send shockwaves through debt collection services across the nation. 

Learn how student loans have changed in 2025 and trends your business needs to look out for as the situation continues to evolve. 

How Student Loans Have Changes in 2025

Before we dive into the implications for the debt collection industry, it’s important to understand some of the key changes recently made to federal student loans. The current administration signed into law the “One Big Beautiful Bill Act” on July 4th, 2025. This legislation overhauled the student loan system: 

  • Student Loan Forgiveness Paused: Borrowers on SAVE plans are seeing the end of payment forgiveness. Right now, payments are required and accruing interest on loans restarted on August 1st, 2025. 
  • Creation of Repayment Assistance Plan (RAP): RAP is an income-based plan for new borrowers that requires a minimum payment regardless of a person’s income level. This plan will only be approved for cancellation after 30 years of qualifying payments. 

Student Loans and Their Impact on Debt Collection 

One of the biggest and most immediate effects that student loans will have on debt collection solutions is a surge of collection activity. With loan forgiveness paused, the millions of delinquent accounts are going to be subject to collection efforts. To start, the federal government is putting increased focus on accounts that are 60 days or more delinquent. 

This means that standard debt collection communications channels like phone calls and physical mail are going to be much more crowded for the foreseeable future. It’s also likely that some customers your business talks to have this type of financial obligation. That means no matter what debt type you’re collecting, there is more competition to get their attention through non-digital channels and less funds available to repay debts. 

We Could See An Increase in Involuntary Collection Tools 

When a consumer defaults on their student loan debt, the federal government has strong tools to help them collect payments. After 270 days pass without a payment being made, the government can garish up to 15% of the borrower’s paycheck. Any federal tax refunds can also be withheld and applied to the loan. 

Any student loan accounts that are in delinquency or have defaulted can also be reported to national credit bureaus, causing damage to the borrower’s credit score. Consumers who are going through this process may be less likely to make payments on other debts while they try to keep up with student loans. The common thread is that more student loan borrowers could have reduced disposable income once all the changes take effect. 

New Student Loan Rules Could Lower Credit Scores 

Experts agree that the new student loan rules have a strong possibility of lowering credit scores for existing borrowers. Since the payment forgiveness that started shortly before COVID is ending, borrowers will likely need time to make payments as other costly necessities (like the rise of grocery costs) take their attention. 

It’s possible that this will have widespread effects on consumer credit scores, making it more difficult for these borrowers to participate in the financial system. Specifically for student loans, a lower credit score makes it harder for borrowers to consolidate the debt at an affordable interest rate. 

A lower credit score also makes it more difficult to access new lines of credit, a common tactic consumers use to pay off debt. Borrowers with a lower credit score will get higher interest rates on new loans, making it more expensive to get loans and more likely that payments made on debts will be in smaller amounts. To help navigate this challenge, debt collection services that offer consumers more payment options could have greater success.  

Increase Your Collections Performance with an Industry Leading Platform

Student loan debt is primed to have a lasting impact on debt collection solutions. If you want to leverage AI that adapts to these situational challenges to collect more from happier people, TrueAccord is here to help. 

If you want to empower your debt collection solutions with machine learning and a consumer-friendly digital experience, contact our sales team today.   

One Size Doesn’t Fit All in Debt Collection

By on July 25th, 2025 in Customer Experience, Machine Learning, Product and Technology
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What if there was an ice cream shop that only sold vanilla? Just one flavor, offered in one size without any extra options. How much business do you think this shop would get? We know that it’s probably not a profitable business model because it contradicts one of the most important trends seen across countless industries – honoring customer preferences. 

In the debt collection industry, there’s a lot of businesses out there practicing the “single flavor” or one-size-fits-all approach. Customers only get sent notices through one or two communication channels and have a single type of payment option. 

Debt collection solutions shouldn’t be one-size-fits-all. If you’re interested in learning how to improve the debt collection customer experience, it starts with finding ways to accommodate more preferences. 

Why Isn’t Personalization More Common in Debt Collection Solutions?

It’s no surprise that consumers have personal preferences that impact their engagement with businesses. One of the most important preferences is how they want to be contacted. While phone calls used to be the go-to method for debt collection, in today’s digital world any unknown number is usually automatically labeled as spam in a person’s mind. 

In the debt collection industry today, there’s no shortage of communication channels. So why do so many debt collection companies go for a one-size-fits-all approach through a more outdated method like phone calls or physical mail? There’s a few challenges that can help explain it: 

  • Content Library Creation: The process of building and managing an extensive digital content library for debt collection isn’t easy, especially given compliance requirements for all the different channels like email, text, self-serve portals. This process requires writers and content experts who understand debt collection solutions and the pain points consumers experience.
  • Lack of Resources: Many debt collection companies lack the resources to build out the strategy and operations for multiple or digital channels.  
  • Not Leveraging AI: Without AI and machine learning, it’s much more challenging to figure out what type of content and channel resonates with each individual and implement customized communications at scale

Just like the scenario we listed above, only offering “one flavor” usually leads to less effective debt collection solutions, lower performance and unsatisfied consumers. 

Improve the Debt Collection Customer Experience with Personalization

The main reason to take a personalized approach to debt collection solutions is to help more consumers repay debts and reach greater financial health. To do that, consumers need to engage with debt collection messages. For starters, 46% of consumers expect companies to reach out to their preferred channels. When this happens, companies see a 10% increase in payments from delinquent customers. But preferred channels aren’t the same for everyone.

With financial matters (including debt collection and bill notifications), people increasingly prefer digital communication channels. In fact, 59.5% of consumers list email as their first contact choice for communication from a company. When you meet someone’s expectations, payment reminders are more likely to be noticed and acted on. While honoring a consumer’s preferred channel is important, it’s not the only customization that can make an impact. 

Customizing Content Gets Results

It’s common for debt collection companies to have a few sets of communication templates, but the content itself doesn’t change much. But with an eye toward data-driven changes and testing, there’s always an opportunity to adjust content to catch attention and better engage consumers. 

For example, TrueAccord had a client that wanted to improve the performance of debt notification emails. The TrueAccord team created emails that included animated GIFs, an idea supported by machine learning data. This strategy led to a 6% increase in click rates and a happy client that became excited about future tests.

The best debt collection solutions treat content as a living strategy. That means updating content templates on a regular basis and testing new ideas to keep up with shifts in customer preferences. One crucial element that makes this possible are AI tools that measure effectiveness and ensure the content is compliant. 

Personalization is Better with an Omnichannel Approach

An omnichannel approach to debt collection solutions means leveraging a combination of communication channels for consumers to engage with. Every channel like email, text, self-serve portals and more are integrated into a consumer-centric approach. These channels work together to uncover the best option for each individual. 

Beyond simply adding digital channels, companies need to adopt a customized omnichannel debt collection approach to engage consumers through preferred channels. At TrueAccord, this is achieved through a patented machine learning engine called Heartbeat. Consumer engagement with Heartbeat is automated and optimized by data-driven algorithms that decide what timing, message and channel will be most effective for each individual person. 

By finding the right timing, message and channel, your debt collection solutions won’t just help more consumers engage in debt repayment, but you’ll recoup more in a cost-effective way. 

See What TrueAccord’s Debt Collection Technology Can Do

Does your business want to collect more from happier customers? At TrueAccord, we use AI tools to offer a personalized and self-serve experience that honors consumer preferences. To learn more about our industry-leading results, connect with our team today!

Have Consumer Expectations Changed in Debt Collection?

By on July 18th, 2025 in Customer Experience, Industry Insights, Machine Learning
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As recently as 15 years ago, consumer expectations about the debt collection experience looked starkly different than they do today. Back then, people expected debt collection communications to come as a piece of physical mail, and consumers were more likely to answer the phone for an unknown number before spam calls and call labeling and blocking became the norm. Companies who were looking to collect on a debt often used aggressive tactics, and customer satisfaction wasn’t a priority as long as some of the money owed was recovered. 

Now, consumers want empathy, understanding and convenience from the companies they interact with, especially in financial services. These shifts in consumer expectations continue to spark changes in debt collection trends and have led to more businesses investing in digital strategies to better engage with consumers. Join us as we take a more in-depth look at how consumer expectations in debt collection have changed and what it means for your business. 

Customer Satisfaction is a Key Debt Collection Trend 

Consumers today want their problems in financial matters resolved sooner rather than later. A recent survey done by TCN on consumer expectations found that financial companies are seeing a decline in customer satisfaction. One of the main drivers of this trend is people reporting that customer service efforts aren’t solving their problems effectively. A key benchmark used in this survey looked at how often financial service businesses were able to solve customer problems on first contact.

Only 13% of survey respondents said that their problem is always solved the first time they reach out. The more someone is forced to call back or wait for a follow up, the less likely they’ll be to engage with the company moving forward. For debt collection, that means fewer payments the longer a consumer has to wait. These survey findings stem from the debt collection trend of consumers wanting to fix problems on the spot. This notion is part of the reason why self-service portals and mobile apps have become the preferred method of resolving financial matters. 

One key digital debt collection strategy is offering your customers more options that are easily accessible to them. In fact, 59% of consumers in debt want more flexible payment options. If your business is trying to improve its debt collection performance, giving your customers more options will often lead to higher levels of satisfaction. The proof of this digital debt collection trend can be seen with TrueAccord. Roughly 98% of TrueAccord customers resolve their debts with self-serve options and don’t ever interact with a human in the process. 

Preferred Communication Channels for Bill and Debt Notifications Have Changed

Today, there’s no shortage of ways to send customers bills and debt notifications. For many companies out there, these notifications are sent through channels that are convenient and/or familiar to them, which doesn’t always align with consumer preferences. The more in-tune businesses are with consumer preferences, the more likely their communications will be engaged with. For businesses looking to recover debt, that means better collections performance and happier customers. 

Let’s walk through an example. According to the same TCN survey, 47% of consumers prefer to be contacted by email for bill and debt notifications. Around 25% of Gen Z and 22% of Millennial customers prefer to be notified by push notifications through mobile apps. Your digital debt collection strategies need to take these expectations into account to maximize engagement. Even though email was the most desired communication method, every consumer is an individual with their own preferences. 

Some of the best digital debt collection strategies leverage AI and machine learning to test and uncover the best channel for every individual. TrueAccord uses its patented machine learning engine Heartbeat that learns from every customer interaction to determine the best step to take with each consumer. It’s a personalized approach to debt collection where consumer expectations and preferences are at the core of every communication. The result is collecting more from happier people. 

Convenience is King in Digital Debt Collection Strategies

In financial industries like banking and debt collection, convenience has emerged as one of the most important consumer preferences. With how critical messages in these industries often are, consumers want ways to be able to easily address them so the problem doesn’t linger and cause prolonged stress. For further proof of this trend, a recent survey by the American Bankers Association showed that 55% of consumers prefer mobile banking. Only 8% of people surveyed go to a physical branch for their banking needs. 

The consumer trend of wanting more convenience through self-serve options is carried through into the debt collection industry. TrueAccord, for example, has been able to honor this consumer trend with its self-service portal. It’s a low friction way consumers use to pay off debt and should be a key strategy leveraged for digital debt collection. 

Based on research done by McKinsey, consumers who digitally self-serve resolve their debts at higher rates and are much more likely to pay off the debt in full. Plus, the customer satisfaction is much higher with self-service portals compared to making a payment over the phone. These trends emphasize the importance of convenience. But just don’t take it from us, here’s what a real TrueAccord customer had to say: 

“Thank you for being patient and for having a portal that makes it easy to make the payment without filling out a bunch of stuff and having to make an account or something.”

Stay On Top of Consumer Expectations in Debt Collection with TrueAccord

It can be challenging to stay on top of consumer expectations in debt collection. But with the right partner, your business can improve debt collection performance while increasing customer satisfaction. 

TrueAccord is a leading digital debt collection agency that’s powered by machine learning to provide a consumer-friendly experience that honors their preferences. Schedule a consultation today to learn more about how our platform can handle your delinquency needs. 

5 Credit Union Growth Strategies to Boost Business

By on June 27th, 2025 in Industry Insights
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Credit unions are vital pieces of the communities they serve. They’re pillars of financial literacy that support the local economy by offering personalized service to members. Credit unions often need continued growth to not only stay competitive in the market, but to also better pursue their mission as an organization. 

However, certain market factors like facing competition from large financial institutions can make it challenging for credit unions to thrive. The good news is that with the right approach, membership expansion is achievable. Learn five credit union growth strategies to help your business below. 

1. Make Membership Engagement A Priority

One of the clearest paths to growth is for credit unions to get more members. And a good strategy to achieve that is to prioritize membership engagement. Some of the most successful credit unions leverage technology to have more points of contact with their members. Online touchpoints like accepting membership applications online, a strong social media presence and mobile apps (for mobile banking) all add value to customers. 

Digital touch points make it easier for your credit union to introduce more convenience to your customers. The happier your members are, the more likely they are to share their experience, which often leads to membership growth.

2. Leverage the Potential of Your Unique Markets

At their core, credit unions operate with a relationship-based business model. This approach is one of the main motivations behind specialized services that serve niche markets. The question is, can your business do more in those unique markets? We’ll expand on this strategy by walking through an example. 

Let’s say you’re a credit union that offers specialized loans for musical instruments. While the service is promoted, there’s more that can be done to gain more traction in the market. For starters, your team could reach out to local schools, music stores and teachers. A limited time promotion, sponsorship or contest could drive more customers to this core service.

3. Focus on Community Outreach

Community outreach and a credit union’s financial health often go hand-in-hand. Businesses that put extra focus on serving the community can see increased membership growth and loyalty. Some community outreach initiatives that credit unions could leverage include: 

  • Free Community Events: Host financial literacy workshops that are free for members and the local community. You can also ask attendees about future workshops they’d like to see to help build an event calendar. 
  • Sponsorships: Look for sponsorship opportunities in the local community. Whether it’s backing a little league team or partnering with a local non-profit, make sure the sponsorship aligns with your credit union’s mission. 

Partner with Local Businesses: Look for other local businesses that focus on serving the community such as a local insurance agent. There’s a lot of opportunity to grow your credit union’s businesses by cross promoting services with them.

4. Update the In-Branch Experience

An approachable tech solution for credit union growth is to update the in-branch experience with digital signage. These signs are programmed to enhance the customer experience by displaying relevant information such as the current wait time, what documents are needed for specific services, finance tips, and more. 

Digital signage also provides the benefit of being a brand ambassador for customers that keeps them engaged when they’re not working with an employee. Industry experts agree that digital signs are a key part of optimizing the branch experience for customers. Digital signs add value without removing the personal rapport expected at credit unions.

5. Embrace an Omni-Channel Approach to Debt Collection

Every credit union has delinquent accounts, and every dollar recouped is another dollar that can be re-invested in the community. An omni-channel approach to debt collection seamlessly combines each communication channel into a consumer-centric approach. The heart of this strategy is all about communicating through a customer’s preferred channel. Research shows that initiating contact with customers on their preferred channels can lead to a 10% increase in payments. 

One bad interaction with a customer can damage your brand reputation. That’s why it’s important to provide a debt collection experience that caters to customer needs and preferences. With surveys showing that 46% of consumers expect to be contacted through their preferred channels, how can your credit union fully leverage digital debt collection?

TrueAccord Specializes in Digital Debt Collection for Credit Unions

At TrueAccord, our omni-channel approach is fueled by a patented machine learning engine called Heartbeat. It determines the right channel, to send the right message, at the right time, all while maintaining compliance. 

If your credit union is looking to collect more from happier people, TrueAccord can help. Our platform can handle your credit union’s charged-off accounts with an approach loved by consumers. Contact our sales team today to learn how we can support your business goals.