Consumer complaint received 2026-04-16 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Struggling to repay your loan — Problem with forgiveness, cancellation, or discharge
Company: Servicer under contract with Federal Student Aid
State: MD

Complaint narrative:
Consumer Financial Protection Bureau Complaint WITH XXXX XXXX CLAIMS NOTICE ( XXXX XXXX ) Complainant : XXXX XXXX XXXX, XXXX Issue Type : Federal Student Loan Wrongful Reinstatement After Total and Permanent XXXX ( TPD ) Discharge / Negligence / Administrative Misconduct / Improper Collection -- - Summary of Complaint This complaint concerns the wrongful reinstatement, mismanagement, and continued collection of my federal student loans despite my eligibility for Total and Permanent XXXX ( TPD ) discharge and my longstanding XXXX status as determined by the Social Security Administration ( SSA ). The conduct of the U.S. Department of Education and its contracted servicers constitutes not only administrative error, but also actionable negligence and wrongful acts under federal tort principles, including those recognized under the Federal Tort Claims Act ( FTCA ), 28 U.S.C. 1346 ( b ). -- - Key Facts- SSA determined I became XXXX effective XX/XX/XXXX, and I remain entitled to XXXX benefits. - My loans entered a TPD discharge process beginning approximately XXXX. - I submitted required documentation during the post-discharge monitoring period, including a sworn statement dated XX/XX/XXXX, with supporting tax documentation. - My loans were later reinstated for alleged failure to provide documentation, which is factually incorrect. - Federal Student Aid records show a TPD discharge application completed on XX/XX/XXXX. - Later records reflect inconsistent statuses, including a closed TPD record in XXXX without explanation. - By XXXX, my loans were placed into default and transferred to the Default Resolution Group, with a balance exceeding {$270000.00}. -- - Federal Tort Liability Framework 1. Negligence ( Failure to Properly Process and Maintain Records ) Under the FTCA, the United States is liable for negligent acts of its employees acting within the scope of their duties. The Department of Education and its agents failed to : - Properly process submitted documentation - Maintain accurate records - Apply governing regulations correctly This constitutes a breach of the duty of reasonable care in administering federal loan discharge programs. Courts recognize that negligence arises where a duty exists, that duty is breached, and damages result. See, 350 U.S. 61 ( 1955 ). -- - 2. Negligent Misrepresentation/ Administrative Misconduct Servicers and federal representatives provided inconsistent and conflicting information regarding the status of my loans and the basis for reinstatement. Liability for negligent misrepresentation arises where false or misleading information is supplied in the course of official duties. See, 460 U.S. 289 ( 1983 ). The inability of representatives to identify a valid reinstatement trigger further demonstrates systemic administrative failure. -- - 3. Arbitrary and Capricious Action ( APA Overlay ) The reinstatement of my loans without a clear regulatory basis violates the Administrative Procedure Act. An agency must articulate a rational basis for its decisions. See, 463 U.S. 29 ( 1983 ). No such rational basis has been provided. -- - 4. Procedural Due Process Violations Reinstating discharged loans without adequate notice or explanation constitutes deprivation of a property interest without due process. See, 424 U.S. 319 ( 1976 ). -- - 5. Wrongful Collection Activity The continued collection of debt that has been dischargedor should have been dischargedconstitutes improper government action. Courts recognize that the government may be liable when it wrongfully enforces obligations not legally owed. See, 518 U.S. 839 ( 1996 ) ( government liability for improper enforcement of obligations ). -- - Nature of the Violations - Improper reinstatement of TPD discharge without lawful basis - Failure to process or retain submitted documentation - Maintenance of inaccurate and contradictory account records- Continued collection and default reporting on invalid debt - Failure to provide explanation or due process -- - Damages and Harm As a direct result of these actions : - I have suffered significant credit damage - I have been subjected to improper collection activity - I have incurred financial hardship and risk to housing stability - I have expended substantial time and resources attempting to correct these errors These harms are consistent with damages recoverable under federal tort principles. -- - Requested Resolution I request the following : 1. Immediate discharge of all federal student loans under TPD criteria 2. Reversal of all default status and collection activity 3. Correction of all credit reporting related to these loans 4. Full written explanation identifying the basis for reinstatement 5. Administrative acknowledgment of error in handling my account 6. Preservation of all records related to this matter for potential legal review -- - Notice of Potential Federal Tort Claim This complaint also serves as notice that the conduct described herein may form the basis of a claim under the Federal Tort Claims Act. If not resolved administratively, I intend to pursue all available legal remedies, including claims for negligence, administrative misconduct, and improper collection of debt. -- - Supporting Evidence - SSA Benefit Verification Letter confirming XXXX onset and continued entitlement - Sworn income statement and tax documentation ( XX/XX/XXXX ) - Federal Student Aid records showing TPD application completion ( XX/XX/XXXX ) - Loan records reflecting inconsistent and contradictory status history -- - Conclusion The handling of my TPD discharge reflects systemic administrative failure and negligent conduct. The continued enforcement of this debt is unjustified and must be corrected immediately. -- - Submitted by : XXXX XXXX XXXX, XXXX

Company response to consumer: Untimely response