Student-loan company Maximus mistakenly told borrowers payments are due – Business Insider

In a time of extreme uncertainty for millions of federal student-loan borrowers, a mistake by a major company may have made matters even more confusing.
In July, President Joe Biden’s Education Department directed student-loan companies to halt messaging to borrowers surrounding the student-loan repayment date, including anything concerning monthly billing. This was the same action the department took leading up to Biden’s fourth extension of the student-loan payment pause, currently set to expire after August 31, and has prompted speculation the pause will be extended once again.
However, some borrowers have been receiving notice of payments due as early as September 1 — particularly those whose accounts were transferred from former servicer Navient to a new student-loan company, Aidvantage, which is run by Maximus. According to exhibits provided to Insider by advocacy group Student Borrower Protection Center (SBPC), and conversations with borrowers, some accounts show payments due in September ranging from $1 to hundreds of dollars. 
Chris Hicks, senior policy advisor at the SBPC, told Insider that it’s unclear how many borrowers were told to make a payment to Aidvantage when nothing is actually due. He said the oversight is “causing borrowers an extreme deal of confusion and anxiety.”
“Although there is some uncertainty about whether the payment pause will be extended, ED has been clear that borrowers would receive a statement at least 21 days prior to their payment due date,” Hicks said. “ED has also clearly told its servicers not to contact borrowers ahead of the extension of the payment pause about resuming payments, however, borrowers’ accounts list due dates within 21 days of today.”
“Whether or not this is an actionable misrepresentation under state or federal law, it is at the very least an indication that servicers — especially Maximus — are exacerbating an already-fraught situation and warrants closer scrutiny,” he added.
Maximus spokesperson Eileen Cassidy Rivera told Insider that the Federal Student Aid office “asked Aidvantage to halt repayment communications in this interim period. Anyone who may have inadvertently received repayment notification during this time has been identified, their accounts corrected and an apology sent.”
Back in December when Navient received approval to end its federal servicing, Rivera also told Insider that it’s “imperative” the company facilitates a smooth transition to repayment.
An Education Department spokesperson told Insider that “any communications from servicers to federal student loan borrowers regarding restarting student loan payments were sent in error. The Department of Education has directed servicers to inform federal student loan borrowers who received the message that payments remain paused.”
The spokesperson also noted that less than 0.1% of borrowers received the notice, and no payments were collected. 
Insider spoke to a borrower from Connecticut whose account was transferred from Navient to Aidvantage, and they now have a $268.24 balance due on September 8. They said they have not received an apology and their account still shows the payment due in a couple weeks.
“It’s very stressful and I just feel like it puts a lot of onus on the borrower to find a way to document everything and present it and make sure that we are able to support our own case someday,” the borrower said. “It’s just so confusing. Like, am I going to owe $200 to Aidvantage next week, or am I not?” 
According to Hicks, other borrowers impacted have not received an apology and their accounts still show payments due in two weeks. Additionally, some of the borrowers saw they had been enrolled in auto-debit without signing up for that feature, meaning they could be at risk of having money withdrawn from their accounts without their knowledge or consent.
Scott Buchanan, executive director of the Student Loan Servicing Alliance — a group that represents federal loan servicers — wrote in a letter to Education Secretary Miguel Cardona on Monday that despite guidance from the department, “the core systems, programming, and call center training still reflect resumption occurring on September 1.”
“As the resumption date of September 1 approaches, those manual processes and temporary work arounds used may begin to have fail points as more and more automated system transactions begin to be triggered, and there could be incidents of borrower miscommunication that will be a result of the lack of guidance in sufficient time for any operation,” he wrote. 
Still, despite anticipation of an extension of the payment pause, Biden has yet to make an announcement with the end of August just over a week away. Education Secretary Miguel Cardona said borrowers will know “within the next week or so,” and the president is also expected to announce broad student-loan forgiveness before then, which could happen as early as Wednesday.
While Maximus acknowledged the payments due were a mistake — similar to actions a different company, Nelnet, took last week when alerting some borrowers their payments would be auto-debited — it reflects the range of issues that can arise with loan company transfers, along with the administrative burdens and errors accompanying resuming payments after over two years. 
Until Biden makes an official decision on extending the pause and canceling student debt, Hicks said all borrowers should check their accounts and if they see a payment due next month, they should reach out to their state student-loan ombudsman and file a complaint. If they do not have an ombudsman, they can also contact their state attorney general office or the Consumer Financial Protection Bureau. 
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