Product: Student loan

Subject : Formal Rejection of Case Closure & Expansion of BDTR Claim to Include Servicer Misconduct To Whom It May Concern, I am formally rejecting the closure of my case, as the response provided fails to address the core legal violations, procedural errors, and financial harm caused by the mismanagement of my student loans. The issues I have documented reflect not only loan servicer incompetence but also conduct that may be unlawful, deceptive, or fraudulent, violating multiple federal statutes and borrower protections. Given these ongoing failures, I have escalated my complaint to the Federal Student Aid ( FSA ) Ombudsman Group as of one day after receiving your decision. 

This submission also expands my Borrower Defense to Repayment ( BDTR ) claim to include servicer misconduct, as Aidvantages actions have fundamentally undermined the validity of my loan obligation, which is precisely the type of situation that BDTR is designed to remedy.

Summary of Legal & Procedural Issues 1. Unauthorized In-School Deferment & Loan Status Mismanagement In XX/XX/, my loans were erroneously placed into in-school deferment, despite my graduation over a year prior. 
This change was not authorized, requested, or even communicated before it was applied. 
As a direct result, my loans were removed from the SAVE plan and incorrectly placed into a different status, delaying repayment progress and altering my financial obligations. 
Despite multiple complaints, the servicer failed to provide a clear explanation or justification for how this happened and did not immediately restore my loans to the correct status. 

This action violates 20 U.S.C. 1083 ( e ) ( 1 ) under the Higher Education Act ( HEA ), which mandates that servicers must maintain accurate borrower records and may not unilaterally alter repayment plans without borrower consent. Aidvantages failure to follow these requirements directly harmed my ability to manage my loan repayment. 

2. Interest Accrual & Balance Discrepancies Violation of Federal Consumer Protections Unexplained changes in my loan balance occurred between XX/XX/XXXX, and XX/XX/XXXX, contradicting previous account statements. 
Despite my enrollment in an administrative forbearance with 0 % interest, interest was improperly accrued and capitalized. 
Requests for a full, itemized breakdown of how interest and payments have been applied remain unanswered or inadequately explained. 
The servicer failed to provide past payoff amounts, despite federal regulations requiring accurate historical records. 

These discrepancies raise serious concerns about recordkeeping violations under : 15 U.S.C. 1601 et seq. ( Truth in Lending Act TILA ), which requires lenders to clearly disclose how interest and payments are applied.

34 C.F.R. 682.208, which mandates servicers to maintain and provide accurate borrower account histories upon request.

The Fair Debt Collection Practices Act ( 15 U.S.C. 1692 et seq. ), which prohibits misleading or deceptive financial disclosures. 

XXXX. Failure to Provide Proper Documentation & Record Retention Issues The servicer claims that historical records are retained for only 12 months, yet multiple representatives have admitted that retrieving older documents is not a simple process. 
Lack of easy access to loan history prevents borrowers from verifying account accuracy, potentially concealing errors or unlawful servicing practices. 

This lack of transparency directly violates federal consumer protection laws, as borrowers have the right to full and complete loan histories to dispute inaccuracies. 

Expansion of BDTR Claim to Include Servicer Misconduct Aidvantages servicing failures are not merely customer service errorsthey fundamentally undermine the legitimacy of my loan obligation. This is precisely why Borrower Defense to Repayment ( BDTR ) should apply to servicer misconduct, despite past regulations focusing solely on school-based fraud.

Legal Justification : BDTR & Servicer Misconduct 20 U.S.C. 1087e ( h ) ( Borrower Defense to Repayment Statute ) allows loans to be discharged if they were tainted by fraud, deception, or violations of law.

Traditionally, BDTR has focused on misconduct by schools, but its core purpose is to prevent repayment of debts that never should have been made in the first place.

Servicers act as agents of the Department of Education and have direct control over repayment, billing, and loan status changes. If their misconduct prevents borrowers from accessing legal protections, alters repayment conditions without consent, or distorts loan balances through deceptive practices, the loan itself is no longer valid under BDTR principles. 

Legal Precedents Supporting Servicer Accountability XXXX, one of the largest federal servicers, was found liable for widespread deceptive practices in a XXXX ruling under the Washington State Consumer Protection Act. 
The lawsuit found that XXXX steered borrowers into costly forbearances, misrepresented repayment options, and obstructed access to Public Service Loan Forgiveness ( PSLF ), leading to financial harm. 
XXXX ultimately agreed to a {$1.00} billion settlement with 39 states in XXXX, which included loan cancellations for borrowers misled about repayment options. 
The Consumer Financial Protection Bureau ( CFPB ) has repeatedly documented deceptive loan servicer practices, leading to major policy shifts, such as the IDR Account Adjustment in XXXX, which corrected forbearance abuses caused by servicer misconduct. 

Servicer Liability as an Extension of School-Based Fraud The FTC Holder Rule allows borrowers to raise defenses against lenders or servicers if a financial transaction was fundamentally tainted by fraud. 
This principle has been applied in student loan litigation, where servicers were found to have knowingly facilitated predatory lending schemes. 
If a schools fraud can render a loan voidable, a servicers misconductparticularly when it involves financial misrepresentation, errors, or withholding of borrower protectionsshould also be grounds for BDTR relief.

BDTRs Consumer Protection Purpose Supports Expanded Interpretation BDTR exists to ensure that borrowers are not forced to repay loans obtained through fraud or illegal servicing practices.

The Department of Education has already demonstrated a willingness to correct servicer misconduct through loan forgiveness measures, such as the PSLF Waiver and IDR Account Adjustment. 
The precedent for using borrower protections to cancel debts affected by servicer wrongdoing is well-establishedthe failure to formally include servicers in BDTR relief is a regulatory gap that needs to be addressed. 

Demands for Resolution & Next Steps Given the scope of these issues and the servicers failure to adequately resolve them, I am demanding the following : 1. A full and itemized breakdown of all loan balance changes, including any retroactive adjustments, interest accruals, and improper deferment applications.

2. A written acknowledgment of errors and a corrective action plan detailing steps taken to prevent similar servicing failures in the future.

3. A full loan history, including all payoff amounts and interest calculations, dating back to loan origination, as required by federal law.

4. Consideration of my BDTR claim under an expanded framework that includes servicer misconduct as a valid basis for loan discharge.

If these demands are not met within 15 days, I will escalate my complaint to : The Consumer Financial Protection Bureau ( CFPB ) The Federal Trade Commission ( FTC ) State Attorneys General & Congressional Representatives Legal counsel for possible further action Final Notice The handling of my account has been both negligent and potentially unlawful. I do not accept the resolution provided thus far and will continue pursuing full accountability, corrections, and potential discharge of my loans due to Aidvantages misconduct. 

Sincerely, XXXX XXXX, XXXX. XXXX, XXXX, XXXX