Consumer complaint received 2025-02-06 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Trouble with how payments are being handled
Company: Maximus Federal Services, Inc.
State: NC

Complaint narrative:
My understanding is that loan servicers were forbidden from applying borrower defense refunds to loans ( Outstanding Principle Balance OPB ) for other schools or loans that were also in a separate borrower defense case. 

So I have the following questions : 1. Shouldnt my refunds from XXXX XXXX XXXX  case 1 have been sent to me directly and not applied to my outstanding principle balance for XXXX XXXX in borrower defense case 2? 
2. What action do I need to take and who do I take it with? 
3. If my borrower defense case for XXXX is eventually approved, but that balance has been discharged under the IDR forgiveness, will I still receive a retro-active refund of money that I paid on those loans, including the refund payments that were applied to them? 

I was considered a class member of the XXXX case for my XXXX XXXX XXXX XXXX 
I applied for borrower defense for my XXXX loans on XX/XX/XXXX. 
I received notification on XX/XX/XXXX, from the Department of Education, that my application was approved. 
My studentaid data history shows that Aidvantage applied XXXX XXXX related refunds to my OPB for my remaining XXXX balance, rather than issue a refund directly to me. This is what I see : o Refund 1 : Loan Disbursement Amount : {$23000.00} Aid Recipient 's Loan Discharge Type Code : XXXX Aid Recipient 's Loan Discharge Type Code Description : Borrower Defense Aid Recipient 's Loan Discharge XXXX Amount of Discharge : {$8400.00} Amount of Discharge Applied to OPB : {$8400.00} Amount of Discharge Applied to OIB : {$0.00} o Refund 2 : Loan Disbursement Amount : {$11000.00} Aid Recipient 's Loan Discharge Type Code : XXXX Aid Recipient 's Loan Discharge Type Code Description : Borrower Defense Aid Recipient 's Loan Discharge XXXX Amount of Discharge : {$4700.00} Amount of Discharge Applied to OPB : {$4700.00} Amount of Discharge Applied to OIB : {$0.00} I applied for borrower defense for my XXXX XXXX on XX/XX/XXXX. 
I was considered a post-class member of the case for my second borrower defense application. 
I have been told that the Dept. of Edu. has until XXXX to respond to this second application. If they do not, the loans would be automatically discharged. 

I received notification on XX/XX/XXXX, from the Department of Education, that I received a full discharge of my remaining balances for XXXX because I was paying on an IDR plan for XXXX years. But the second borrower defense case is still pending. 

I sent multiple inquiries about this on the studentaid.gov website which received no response. 

I created a dispute case with the Department of Education. I received an email from Ombudsman XXXX XXXX on XX/XX/XXXX stating that they were working on the case. I emailed requesting a status update on XX/XX/XXXX which went unanswered. I sent another email requesting an update again today. 

I sent inquiries on the Aidvantage website and I also called customer service to inquire about this. The staff seemed to be uneducated about the XXXX ruling forbidding them from applying my first case refund to the loans contained in the second case. They were not helpful and always told me they could not do anything and that I had to talk to the Department of Education. The Dept. of Ed told me to talk to Aidvantage about it. All I got was the runaround.

Company response to consumer: Closed with explanation