Aidvantage is the new name of Maximus Education that is taking over servicing millions of student loans after Navient said it wanted out.
I dropped into the Aidvantage website this morning to see if there are any updates and I was disappointed to see the advice given. We are not off to a great start. Let the spin begin.
Aidvantage Already Proclaiming
Right off the bat, Aidvantage proclaims they are a servicer to Federal Student Aid and say, “You have a network of support to help you succeed with your federal student loan repayment. Find out how Federal Student Aid partners with loan servicers to be here when you need help.”
That link takes you to a page that explains what a loan servicer is supposed to do. But do they really service loans in a way that’s best for you since the Consumer Financial Protection Bureau has been in an active lawsuit against Navient for poor loan servicing.
Aidvantage is already proclaiming they are a trusted federal student loan servicer. I think the jury is out on that. They might be “trusted” by the Department of Education to sign the contract but only time will tell if the advice they provide can be trusted. They also say they are fully vetted, but for what?
And let’s be clear, the role of a federal loan servicer is not to provide the consumer with the best advice, it is to collect the money owed. As Navient proved, shortcuts and bad advice were not unusual.
As Navient said in response to the CFPB lawsuit, “Borrowers could not reasonably rely on Navient to counsel them into alternative payment plans unless Navient had an affirmative duty to provide such individualized financial counseling. But the law imposes no general duty to provide information without some fiduciary relationship.” – Source
So does Aidvantage have the duty to provide financial counseling? I doubt it but their contract is not publicly available yet on this page.
Aidvantage says they will “support your financial success” but what does that actually mean?
But since Aidvantage is taking over the Navient loan servicing I remain dubious since Aidvantage is taking over hundreds of former Navient employees.
Your Financial Success
The Aidvantage website loudly proclaims, “Aidvantage has one mission — to help you manage the repayment of your FSA loan and support your financial success. Let us help you get there quickly.”
So is Aidvantage going to provide the best fiduciary advice that puts the consumer first or the best advice to collect money as Navient did?
Auto Pay Advice
Federal student loan payments are going to begin again after a long Covid holiday. Aidvantage says, “Auto Pay Confirmation Required — For borrowers with Department of Education owned loans that are in the COVID-19 payment suspension, you must act now if you’re enrolled in Auto Pay to ensure your Auto Pay payments resume after the COVID-19 payment suspension ends. Log in above to opt in or out of your Auto Pay enrollment.”
But if I was previously enrolled in an automatic payment option then why would I have to change anything. One reason could be to confirm they have the right account to collect from. I can understand Aidvantage wants to confirm accounts money to be drawn from but is that a consumer-focused service or collection efficiency. I suppose that could go either way.
Don’t Pay for Help
I’ve covered many student loan assistance scams but Aidvantage and the Department of Education both tell consumers to avoid outside help. Avoiding scams is a good thing. But how can you get a second opinion the advice your loan servicer has given you is actually best for you if you don’t talk to a second trusted party like Damon Day or an advisor at the Department of Education?
Otherwise, you are left with only trusting what Aidvantage says and federal student loan servicers don’t have the best track record of providing the best consumer advice.
Department of Education says, “However, if a company doesn’t deliver what it promises, it’s scamming you.” Does that apply to federal student loan servicers as well?
What I’d Like to See on the Aidvantage Website
I’d rest easier if the Aidvantage website was clearer about what services they contractually provide as a federal student loan servicer. For example:
- Transparency about their role to collect the debt.
- Transparency about their role to provide the best financial advice for the consumer versus collection.
- Statements about what happens when the Aidvantage representative provides incorrect advice.
- How to get a second opinion or advice from a second trusted source to confirm what you’ve been told is accurate or the best path forward.
- Clarity on what the future financial cost is when following Aidvantage guidance. For example, if you put your loans on forbearance for X amount of time it will increase your loan balances by Y and then your payment will be $Z.
- Clarity to consumers about the actual performance outcomes of the recommended solutions. For example, consumers that follow our advice for X repayment option obtain the result Y% of the time.
Time will tell but unless Aidvantage takes a radical new approach to put consumers first with accurate financial advice but it would be an insane to expect any outcome other than what we’ve witnessed from other loan servicers for years. And that has not been awesome.
Adivantage Already Says It is Not Responsible
“You agree that all access and use of the Site and its contents is at your own risk. By using the Site, you acknowledge that we specifically disclaim any liability (whether based in contract, tort, negligence, strict liability or otherwise) for any direct, indirect, incidental, common law, statutory, regulatory, consequential, compensatory, punitive, or special damages arising out of or in any way connected with your access to or use of the Site (even if we have been advised of the possibility of such damages) including, but not limited to, any liability associated with any viruses which may infect your computer equipment. Calculators and tools on the Site provide you with ESTIMATES that may be different than actual amounts.”
“YOU EXPRESSLY AGREE THAT USE OF THE SERVICE AND ANY MATERIALS OR INFORMATION PROVIDED IS AT YOUR SOLE RISK. THE SERVICE IS PROVIDED ON AN “AS IS” AND “AS AVAILABLE” BASIS. AIDVANTAGE EXPRESSLY DISCLAIMS ALL WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON – INFRINGEMENT. AIDVANTAGE MAKES NO WARRANTY THAT THE SERVICE WILL MEET YOUR REQUIREMENTS OR THAT THE SERVICE WILL BE UNINTERRUPTED, TIMELY, SECURE, OR ERROR FREE; NOR DOES AIDVANTAGE MAKE ANY WARRANTY AS TO THE RESULTS THAT MAY BE OBTAINED FROM THE USE OF THE SERVICE OR AS TO THE ACCURACY OR RELIABILITY OF ANY INFORMATION OBTAINED THROUGH THE SERVICE OR THAT DEFECTS IN THE SOFTWARE USED IN THE SERVICE WILL BE CORRECTED.”
So it appears if you rely on the information on the Aidvantage website that is incorrect, that’s all on you.