Bombshell Report Claims This Student Loan Servicer Misled Student Loan Borrowers – Forbes | Vette Leader

A new bombshell report claims this student company misled student loan borrowers.

Here’s what you need to know — and what it means for your student loans.

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A new report released by the Communications Workers of America (CWA) and the Student Borrower Protection Center (SBPC) says their investigation of “the world’s largest student loan company” has uncovered new evidence of “systemic mismanagement, failure and abuse.” The investigation alleges that Maximus, a student loan servicer serving 13 million federal student loan borrowers and operating under the name “Aidvantage,” was allegedly involved in:

  • Sloppy student loan service. Student loan borrowers have reported being unable to access their new Aidvantage accounts online, receiving inaccurate information when asking when federal student loan payments will resume, and missing documentation when their student loans were transferred from their previous student loan administrator.
  • Unfair debt collection for student loans. Low-income borrowers have sued Maximus and alleged that Maximus violated the rights of student loan borrowers for their defaulting student loans.
  • Unlawful seizure of wages and abusive confiscation of public services. Another lawsuit against Maximus alleges that Maximus unlawfully withheld wages, Social Security, tax refunds and other public benefits from student loan borrowers who defaulted on payments.

(Biden to call $6.2 billion in student loans)

In response to their investigation, the CWA and SBPC launched AidvantageWatch, a project to uncover alleged wrongdoing by Maximus and ensure fair treatment of all student loan borrowers. Borrowers can visit AidvantageWatch online to share their experiences with Maximus/Aidvantage and learn how to alert regulators and law enforcement officers when they encounter fraudulent or deceptive behavior by the student loan company.

“This report contains several significant errors of fact and context that mischaracterize our work for the FSA, including inaccurately describing the number and nature of consumer complaints about our work servicing student loans and falsely claiming that we are a student debt collector.” , Maximus spokeswoman Eileen Cassidy Rivera said. “We are not.”

According to Rivera, Maximus disputes several claims in the report, including Maximus:

  • should not be referred to as a student loan service company, but as a “government contractor providing back-office services to the government”;
  • does not collect student loan debt and does not establish rules that determine when a student loan is in default; and
  • does not establish any rules or guidelines for attachment or seizure on delinquent student loans.

Maximus also denies they were involved in “sloppy student loan servicing.” “That’s wrong,” Rivera said. “The 99 complaints filed with the Consumer Finance Protection Bureau (CFPB) from more than 6.9 million student accounts cited in the report paint an untrue and unfair picture of Aidvantage. Half of the complaints have nothing to do with Aidvantage or what is under Aidvantage’s control. None of the complaints indicate that Aidvantage is not ready to pay back on May 2nd. Most importantly, all complaints were resolved.”

(Biden could extend student loan payment pause forever)

According to the report, Maximus holds nearly $800 million in contracts with the US Department of Education. The report claims that Maximus not only acted as a student loan service provider, but also managed the debt management collection system used by defaulting student loan borrowers. Maximus has also managed call centers that help delinquent student loan borrowers, known as the US Department of Education’s Default Resolution Group. Finally, through its role as a business process operations provider for the Federal Student Aid Office, Maximus answers questions about student loans and student loan repayments.

(Biden could deliver both an extension of the student loan payment pause and a student loan cancellation this year.)


Student Loans: How to File a Complaint Against Your Student Loan Administrator

Student loan borrowers should be treated fairly by their student loan service providers. This year, there’s a good chance you’ll get a new student loan service provider. Several leading student loan service providers terminated their contracts with the US Department of Education late last year. If you have been wronged by your student loan administrator — the company that manages your student loans and collects student loan payments — you can file a written complaint with one or more of the following:

  • Your Student Loan Administrator
  • the US Department of Education
  • your state’s Attorney General
  • Consumer Financial Protection Bureau (CFPB)
  • Federal Trade Commission (FTC)

(Foreclosure on a student loan doesn’t mean what you think it means)


Student loans: next steps

Payments for federal student loans are scheduled to resume on May 1, 2022. It is possible that President Joe Biden will extend the student loan payment pause again. However, there is no guarantee. Therefore, you should prepare now for the repayment of the Bafög repayment. It’s important to learn the best ways to pay off student loans faster and save money.

Here are smart starting points:


Student Loans: Related Reading

Biden will call $6.2 billion in student loans

Biden could extend student loan payment pause forever

6 Important Changes in Student Loan Forgiveness

Student loan refinancing rates just got ridiculously cheap

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