Recent report accuses Aidvantage of misleading student borrowers: what you need to know
Maximus, which administers federal student loans under the name, was accused of mishandling the student loan accounts of some borrowers. A March 2022 report from the Student Borrower Protection Center and the Communications Workers of America accuses the loan servicer of engaging in “unfair debt practices.”
The report alleges that Maximus may have mismanaged certain accounts and that its “sloppy and potentially illegal student loan service” and “unfair debt collection practices” resulted in “unlawful wage garnishment and garnishment of public benefits”. The report also includes screenshots of account holders who claim to have received incorrect account information or been asked to pay off loans on hold. (The federal government’s moratorium on student loans has been.)
Maximus pushed back. “There are significant errors of fact and context in the report … which grossly misrepresent the work we do for the Department of Education Federal Student Aid (FSA) and misrepresent the number and nature of complaints consumers regarding our student loan servicing work,” Eileen Rivera, vice president of public relations and communications at Maximus, told CNET.
In addition to this report, more than 90 borrowers have filed complaints with the Consumer Financial Protection Bureau since the start of 2022. Many complaints allege that borrowers received incorrect account or loan information from Maximus. In his comment to CNET, Rivera pointed out that the number of complaints is low compared to the 5.6 million Aidvantage services borrower accounts on behalf of the FSA.
“Aidvantage uses the CFPB and other consumer feedback as part of our quality assurance and continuous improvement efforts,” Rivera said. “We welcome this collaboration.”
This news follows the recent $1.86 billion settlementreached in a lawsuit accusing the student loan officer of engaging in abusive and deceptive student loan practices.
Aidvantage currently administers loans for more than 13 million borrowers, totaling $449 billion in student loan debt, according to the Student Borrower Protection Center. In response to the March 2022 report, the SBPC and the Communications Workers of America launched AidvantageWatch, a website designed to help borrowers share their Aidvantage and Maximus experiences. It also hosts access to resources for alerting regulators and officials to any deceptive practices.