Consumer complaint received 2025-04-17 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: CA

Complaint narrative:
Unfortunately, I have found that I was taken advantage of by a textbook example of forbearance steering, as defined by the CFPBs 2022 enforcement actions against XXXX and supported by federal regulation ( 34 CFR 682.211 ( f ), 685.205 ( b ) ). 

Between XXXX and XXXX, I contacted XXXX repeatedly due to financial hardship. Rather than informing me of my eligibility for income-driven repayment ( IDR ) plans or the federal loan rehabilitation program ( per servicer obligations under Title IV of the Higher Education Act ), I was steered into a series of long-term forbearances. Customer service representatives pressed that I qualified for " XXXX dollar payments '' and that there were no consequences, and no other options were provided to me. 

When the forbearance expired around XXXX, I was contacted and told that unless I could afford an exorbitant paymentunaffordable at the timemy only option was consolidation. I was NOT told about IDR or rehabilitation, both of which I later discovered would have preserved my balance, avoided interest capitalization, and maintained progress toward loan forgiveness. 

As a result of this coercive consolidation by XXXX, my balance ballooned from ~ {$48000.00} to over {$85000.00}. It capitalized interest and reset my forgiveness clock. Since then, I have made over 151 qualifying IDR payments. 

Critically, the data shows that I was placed in repeated forbearances at XXXX 's recommendation during my financial hardship. I was not informed that these forbearances would expire or that they could lead to default. When my forbearance period expired, I was contacted by XXXX and told that my only option was to either consolidate or make unaffordable payments in excess of {$500.00} per month. This created a false urgency and removed any meaningful choice-no income-driven repayment ( IDR ) or rehabilitation plans were offered. This tactic aligns with the forbearance steering practices that were cited in the CFPB 's 2022 enforcement actions against student loan servicers. It was at that point, under financial duress and without being informed of legal alternatives, that I was coerced into consolidating, causing irreversible financial harm. 
This case represents a textbook instance of forbearance steering, as defined by the CFPB 's 2022 enforcement actions against XXXX and supported by federal regulation ( 34 CFR 682.211 ( f ), 685.205 ( b ) ). During the period from XXXX  to XXXX, XXXX failed to inform me of available income-driven repayment ( IDR ) plans or the federally mandated 9-month rehabilitation program, both of which were legal options under Title IV of the Higher Education Act. Instead, I was repeatedly placed into forbearance until its expiration, at which point I was pressured into consolidating under the threat of unaffordable monthly payments exceeding {$500.00}. This practice violated servicer obligations and has since been identified by the Department of Education and the CFPB as a systemic failure. My experience directly aligns with the borrower harms being remedied under the IDR Account Adjustment initiative ( XXXX ), which was implemented to address improper servicing, including coerced consolidations and loss of forgiveness progress. 
Through modeling and consultation with financial experts, I now understand that if I had entered a rehabilitation plan instead of consolidating, my balance today could be nearly half of what it is now. 
Rehabilitation would have preserved my original loans, minimized interest capitalization, and maintained forgiveness eligibility. I have attached a visual comparison of my current repayment path versus the alternative I was never informed of.

Additionally, I made a good-faith attempt to obtain documentation regarding my original disbursements, at the suggestion of my current servicer, Aidvantage. I was advised that with those documents, a balance review could potentially occur. I contacted the XXXX  XXXX XXXX  Financial Aid Office, but was informed that records were no longer available due to the time elapsed since graduation. Likewise, my prior servicer, XXXX, no longer retains access to these historical records. 
This systemic failure to retain critical borrower documentation, compounded by coercive servicing practices, has caused enduring financial harm. I believe this case exemplifies the very forbearance and consolidation steering practices cited in prior CFPB and state attorney general actions against XXXX.

Company response to consumer: Closed with explanation