Consumer complaint received 2024-01-16
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Problem with your payment plan
Company: Maximus Federal Services, Inc. (MI)

On XX/XX/XXXX, I submitted an application on studentaid.gov to switch from standard IBR payment plan to the new SAVE plan, along with pay stubs. That same day, I received email confirmation from studentaid.gov that my application request and corresponding income information had been forwarded to my servicer. I had paid off all accumulated interest on my federal loans during the pandemic, so my balance was strictly Principal. I thought this was great, so that I did not have to worry about any capitalization when switching from standard IBR to the SAVE repayment plan. 

I sent an email to Aidvantage a few weeks later to check the status of my request and received an email response stating that I was on the standard IBR plan, so I took this to mean that my request hadn't been completed. On XXXX, Aidvantage stated that they needed income information from me to process my request. The same income information that had been provided via studentaid.gov on XXXX. So I re-submitted the same proof of income. For the rest of XXXX, I continued to receive periodic messages about forbearance ending, Autopay enrollment being approved ( I had been on autopay for years ), and messages stating that my repayment terms had changed, but the payment information and terms remained the same. 

In XX/XX/XXXX, I sent another email to confirm that I had been switched to the SAVE plan, because all I was able to see was the payment amount on statements, and not the name of my IDR plan. On XX/XX/XXXX, Aidvantage once again replied that I was enrolled in the Income Based Repayment plan and that if I wanted to exit IBR, I'd have to call. On XX/XX/XXXX, I received e-correspondence with my request to exit income-based repayment plan, followed by another notification that my autopay amount was changing. The autopay change letter once again showed the same {$210.00} payment that had been calculated under standard IBR. 

From XX/XX/XXXX through XX/XX/XXXX, I used valuable work time to call Aidvantage in order to clarify the multitude of notifications I was receiving, having to ask each time whether they had completed my request to switch to the SAVE plan. Phone reps told me that the SAVE plan would push my monthly payment to over XXXX XXXXXXXXmonth, whereas the standard IBR was {$210.00}. I did not understand their math, as IBR is supposed to be 15 % of discretionary income, and SAVE is supposed to be 10 %. Nobody could walk through the math with me or provide documentation showing the work of whomever calculated my payment. 

I received more autopay enrollment confirmations and more change in repayment term messages through XX/XX/XXXX, and each time the monthly payment remained as {$210.00}. 

I continued to call and email Aidvantage throughout this time to ensure my request was being processed accurately without much success. All of the delays concerned me, as interest had begun to accrue again, and I was diligently trying to avoid capitalization when switching repayment plans. 

On XX/XX/XXXX, I received an update on my request stating that I did not qualify for an income-driven repayment plan, followed my another message that was supposed to contain options that may help. Following the links in that message simply took me to an option to exit income-based repayment on the Aidvantage website. 

I made yet another phone call between XX/XX/XXXX and XX/XX/XXXX and spoke with a different representative. I summarized the events going back to XXXX and asked for her help to switch to SAVE. I will say that she seemed to have a slightly better understanding of the terms of the SAVE plan than previous representatives, who I assume didn't know specifics of various plans and were simply using a generic calculator provided by Aidvantage. This final rep walked me through various plans and tried to convince me that a Graduated repayment plan would be best, as it would give me a lower payment. I thanked her for that, but insisted that I preferred the other benefits of the SAVE plan, especially since the monthly payment should drop from 10 % to 5 % of discretionary income later this year, not to mention the benefits of interest not accumulating and capitalizing when the income-based payment isn't enough to keep up with interest accrual. She was very kind and said she wasn't aware of the switch to 5 %. 

The representative walked through the numbers utilizing the most recent AGI that I was able to provide. She also informed me that if tax returns are not provided to calculate IDR payments, Aidvantage uses gross income from pay stubs. How many people are paying hundreds of dollars extra each month because Discretionary Income can't be determined from pay stubs? Also, I still fail to understand how my standard IBR ( 15 % discretionary pay ) was {$210.00}, but my newly calculated SAVE plan ( 10 % discretionary pay ) is {$380.00} per the XX/XX/XXXX correspondence received. I would appreciate seeing that math broken down. All student loan statements should be required to provide the name of the IDR payment in which the borrower is enrolled. Each monthly statement should also display monthly payment amounts under all other IDR plans utilizing the income information provided by the borrower, and there should be an additional page that shows the income information as well as full descriptions of each IDR plan.

None of the forms I filled out, and none of the questions asked during phone calls requested my AGI. They only asked for gross pay, and what is my household size. Then they would ask how many dependents I had. I thought that by saying I had a household size of XXXX made it pretty clear that I had no dependents, but now I just worry if people with no dependents are charged more in whatever calculations Aidvantage uses to determine monthly payments. 

So I've spent more than XXXX months trying to switch to the SAVE plan. I've submitted online forms, sent emails, and made several phone calls to ensure that my request was accurately processed. In that time, my federal student loans have accumulated more nearly {$900.00} in interest that will very likely be capitalized once the switch is complete.

How many millions of borrowers don't fully understand all the terms of their IDR plan and/or are unable to continue pestering their loan servicer to the extent that I have? How much money are servicers stealing from borrowers by improper management of loans? Also, what about borrowers that tried to switch to SAVE but were talked out of it by ( hopefully ) well-meaning reps that were just doing their jobs using the calculators that they were provided? What if those borrowers were put in other plans with lower monthly payments, and won't receive additional benefits of SAVE, such as the XXXX administration 's plan to erase debts for certain borrowers that initially borrowed less than {$21000.00}? They will miss out on that forgiveness, as there is a deadline for them to switch to SAVE. Forgiveness notifications are supposed to begin in XXXX. Aidvantage has been telling me throughout all of this that they may need at least XXXX  days to process my request. It has taken over XXXX  months! How in the world does any part of this broken system make sense?