Consumer complaint received 2026-03-27 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Received bad information about your loan
Company: Maximus Federal Services, Inc.
State: OH

Complaint narrative:
I am submitting this formal complaint regarding the improper handling of my federal student loan account while it is under active review for a Borrower Defense to Repayment claim. To clarify - Even if your loans were already in default, once a Borrower Defense application is accepted and a forbearance is applied, that status should be honored and reflected across ALL systems. On XX/XX/year>, I received confirmation from the U.S. Department of Education that my loans were placed into FORBEARANCE due to my pending borrower defense application. This status is intended to provide temporary relief while my claim is under review. However, despite this confirmation : The status of my loans has not been updated in the online system to reflect the approved forbearance. My loan servicer has also failed to update the account accordingly. As a result, I have been informed that I am ineligible to receive financial aid due to the current status of my loans. This situation is both inaccurate and unjust. A borrower defense forbearance is a recognized federal protection and should not result in the denial or withholding of federal student aid. The failure to properly update my loan status is causing direct financial harm and interfering with my ability to continue my education. I am requesting the following immediate actions : Correction of my loan status in all systems to accurately reflect borrower defense forbearance Communication between the Department of Education and my loan servicer to ensure consistency Immediate restoration of my eligibility for federal financial aid Written confirmation once these corrections have been completed Under federal law, a loan that has been placed into administrative forbearance due to a pending Borrower Defense to Repayment application is not to be treated as actively in default for purposes of collection or borrower eligibility determinations. Pursuant to 34 C.F.R. 685.206 ( c ), the U.S. Department of Education is required to grant forbearance and suspend collection activity while a borrower defense claim is under review. Additionally, under the Higher Education Act ( 20 U.S.C. 1087e ) and related federal servicing requirements, once such relief is applied, the loan status must reflect that administrative action. Therefore, the fact that a loan was previously in default does not permit it to continue to be treated as defaulted once forbearance has been granted, and any continued classification or adverse action based on prior default status is inconsistent with federal law and regulation. This issue appears to be a breakdown in communication and compliance between federal systems and loan servicing entities. I expect prompt resolution, as this is impacting my education and financial standing. My loans are under Borrower Defense review The Department of Education confirmed forbearance as of XX/XX/XXXX Any denial of aid based on outdated/default status is due to failure to update federal records I am being improperly penalized while under an active federal review. Thank you, XXXX

Company response to consumer: Closed with explanation