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Recent Report Acuses Aidvantage of Misleading Student Loan Borrowers: What to Know
Maximus, which manages federal student loans under the name Aidvantage, has been accused of mismanaging some borrowers' student loan accounts. 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 some accounts, and that its "sloppy and potentially unlawful student loan servicing" and "unfair debt collection practices" have resulted in "unlawful wage garnishment and seizure of public benefits." The report also includes screenshots from account holders who allege they received incorrect account information or were requested to repay loans that were on pause. (The federal government's moratorium on student loans was recently extended to Aug. 31, 2022.)
Maximus pushed back. "There are significant errors of fact and context in the report ... that grossly mischaracterize the work we do for the Department of Education Federal Student Aid (FSA), and inaccurately describe the number and nature of consumer complaints about our student loan servicing work," Eileen Rivera, VP 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 beginning of 2022. Many complaints allege that borrowers received incorrect account or loan information from Maximus. In her comment to CNET, Rivera pointed out that the number of complaints is small relative to the 5.6 million borrower accounts Aidvantage services on behalf of the FSA.
"Aidvantage uses CFPB and other consumer feedback as a regular part of our quality assurance and continuous improvement efforts," Rivera said. "We welcome that collaboration."
This news follows the recent $1.86 billion settlement Navient reached in a lawsuit accusing the student loan servicer of engaging in abusive and deceptive student loan practices.
Aidvantage currently services loans for more than 13 million borrowers, for a total of $449 billion worth of 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 of any deceptive practices.
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