Consumer complaint received 2026-01-23 00:00:00
Product: Student loan — Federal student loan servicing
Issue: Dealing with your lender or servicer — Don't agree with the fees charged
Company: Maximus Federal Services, Inc.
State: OR

Complaint narrative:
I am submitting this complaint regarding prolonged and unresolved servicing errors involving my federal student loans, including improper handling of an approved Income-Driven Repayment ( IDR ) plan, mismanagement of deferment during incarceration, an improper default, incorrect interest capitalization, and ongoing billing inaccuracies by the Default Resolution Group ( DRG ). 

In XX/XX/XXXX, I submitted an IDR application while my loans were serviced by XXXX XXXX ( PHEAA ). That IDR plan was approved, and I made monthly payments under the plan for approximately XXXX months prior to my incarceration in XXXX. Despite this, the Department of Educations system still lists the XX/XX/XXXX IDR application as In Progress, with no indication of review or processing, even though payments were billed and accepted. This status is factually incorrect and reflects a servicing or data migration failure. 

After my arrest in XXXX, I contacted XXXX XXXX and submitted documentation of incarceration. My loans were initially placed into a short-term forbearance and then placed into deferment related to incarceration. XXXX confirmed in writing that my loans would remain on hold during my incarceration and that the servicer would periodically verify my continued incarceration through public records, in accordance with federal law. I was instructed to contact the servicer upon release. 

During my incarceration, neither I nor my family received any billing statements, payment-due notices, or default warnings. The only correspondence received during this period was an annual interest tax statement showing no payments made. Despite verified incarceration and the approved deferment, my loans were later placed into default during my incarceration without notice and transferred away from XXXX XXXX through unknown intermediary servicers before ultimately being assigned to the Default Resolution Group ( DRG ). 

As a direct result of the failure to maintain my deferment during incarceration and the improper default that followed, a substantial amount of interest was assessed and capitalized. Based on current Department of Education balances, the interest attributable to this period exceeds {$25000.00}. This interest would not have accrued had my deferment been properly maintained and the default not occurred. 

Upon my release in XXXX, I verified my identity, located my current servicer, and promptly contacted DRG. I requested correction of the improper default and servicing errors. DRG denied the request and instead placed me into a loan rehabilitation agreement. I have made every required rehabilitation payment on time and in accordance with the agreement. However, DRGs mailed billing statements incorrectly show a past-due amount, while the DRG online portal shows the account as current. DRG correspondence falsely states that I have failed to make timely and consistent payments, despite their own payment records confirming compliance. 

Additionally, DRG has repeatedly mischaracterized my requests as seeking cancellation, reduction, or discharge of my loans. I have never requested cancellation, reduction, or discharge. My request has consistently been limited to correction of servicing errors, removal of an improper default, correction of interest and capitalization that resulted from those errors, and accurate reflection of my payment history. 

I submitted a request for assistance with the XXXX XXXX XXXX Ombudsman Group on XX/XX/XXXX. Since submission, the request has remained in a pending status with no acknowledgment, no outreach, and no response of any kind. 

As of XX/XX/XXXX : My Ombudsman Group feedback case submitted on XX/XX/XXXX remains pending with no action or response. 
My XXXX XXXX XXXX application continues to be listed as In Progress nearly 12 years later, despite having been approved and paid for some time. 
Department of Education records continue to reflect outdated and contradictory information, including an upcoming payment due dated XX/XX/XXXX during a period when my loans were on hold. 

These unresolved issues demonstrate systemic servicing failures, inaccurate recordkeeping, and improper default processing that have caused significant financial harm.

Company response to consumer: Closed with explanation