Aidvantage is like a big helper for student loans. They took over from another helper called Navient in December 2021. Their job is to:
- Send bills to people who borrowed money for school
- Answer questions about loans
- Help people figure out how to pay back their loans
Aidvantage is part of a bigger company called Maximus Education. They’re new at this job, and some people like them better than the old helper, Navient.
The Big News: Student Loan Servicers in Trouble
What Happened?
The government, led by President Biden, is upset with some student loan helpers. They did something wrong:
- Aidvantage: Has to pay $2 million
- EdFinancial: Loses $161,000
- Nelnet: Loses $13,000
These helpers forgot to send bills to 758,000 people on time. That’s like forgetting to remind almost a million friends to put money in their piggy banks!
Why Is This Important?
When helpers make mistakes, it can cause big problems for people trying to pay back their school loans. Imagine if your piggy bank helper forgot to tell you when to put money in – you might get in trouble for being late!
What This Means for Borrowers
If you’re one of the people affected by this mistake, here’s what will happen:
- You get a timeout on your payments (called administrative forbearance)
- You don’t have to pay right now
- Any extra money you might have owed (called interest) goes away
- This timeout still counts towards finishing your loan payments
Why Did This Happen?
After a long break because of COVID-19, everyone had to start putting money in their piggy banks (paying loans) again. This caused a lot of confusion:
- People had to wait a long time to talk to helpers on the phone
- Some got wrong information about how much money to put in their piggy bank
- Many were confused about how much they owed
The Government’s Plan to Help
The government wants to make sure the loan helpers do a better job. They’re trying to:
- Make the helpers follow the rules
- Make it easier for people to pay back their loans
- Fix problems in the way student loans work
What Important People Are Saying
Education Secretary Miguel Cardona said:
“We’re not going to let student loan helpers get away with doing a bad job. We want to make sure they help people properly.”
How We Got Here: A Quick History
- People didn’t have to pay their student loans for over three years because of COVID-19
- The highest court in the country said no to a plan to erase some student loan debt
- In October 2023, people had to start paying again, but it was very confusing
Problems When Payments Started Again
When it was time to start putting money in the piggy banks again:
- People were confused about how much they owed
- It was hard to talk to the loan helpers
- Some people got surprise bills or wrong information
This Isn’t the First Time Helpers Got in Trouble
- In October 2023, another helper called MOHELA had to pay $7.2 million for making mistakes
- The government is trying to make sure all the helpers do a good job
What the Loan Helpers Say
The loan helpers say it’s not all their fault:
- They say the government didn’t give them enough tools to do their job
- They warned that there might be problems
Protecting People’s Credit Scores
A credit score is like a report card for grown-ups about how good they are with money. The government is trying to make sure that if people had trouble paying their loans because of these mistakes, it won’t hurt their grown-up report card.
The 12-Month Helper Program
To make things easier, the government made a special 12-month program:
- It started in October 2023 and goes until September 2024
- If people have trouble paying during this time, they won’t get in big trouble
What Experts Found
The Consumer Financial Protection Bureau (a group that looks out for people’s money) found some problems:
- People had to wait over an hour on the phone to talk to loan helpers
- Some bills had wrong information
- The helpers might have broken rules about treating people fairly
Who’s to Blame?
There’s a big debate about whose fault this is:
- The government says the loan helpers need to do better
- The helpers say they didn’t get enough help to do their job
- Some people think the government made it hard for the helpers on purpose
What This Means for the Future
Because of all this:
- The government might watch the loan helpers more closely
- There might be new rules to protect people with student loans
- The way student loans work might change
How to Protect Yourself if You Have Student Loans
If you have a student loan piggy bank, here’s what you can do:
- Keep track of your loan information
- If you’re having trouble paying, talk to your loan helper
- Learn about your rights as someone who borrowed money for school
Frequently Asked Questions
- What’s a student loan servicer?
It’s a company that helps manage your student loan piggy bank. - How do I know if this affects me?
Your loan helper will send you a letter if you’re one of the people affected. - What should I do if I’m having trouble with my student loan?
Talk to your loan helper or the government’s student aid office. - Will this make my loans go away?
No, but it might help make sure the helpers are doing their job better. - How can I find out who my loan helper is?
Go to studentaid.gov and log in to your account.
More About Aidvantage
Aidvantage’s Background
Aidvantage is new at being a loan helper. They took over from Navient, which many people didn’t like very much. So far, many people think Aidvantage is doing a better job, but there are still some problems.
What Stays the Same with Aidvantage
Even though Aidvantage is a new helper, some things don’t change:
- Your account number
- The rules of your loan (like how much interest you pay)
- The phone number you call for help
- Your username and password for your online account
Aidvantage’s Website and Information
Aidvantage has been trying to make their website better and easier to use. But some people still find it confusing:
- Some say it’s hard to find information on the website
- Others say they get different answers when they call for help
If you’re confused about your loans, it might be a good idea to talk to an expert who knows a lot about student loans.
Changing Your Interest Rate
Even though Aidvantage is a new helper, they can’t change how much interest you pay on your loan. That’s decided by the government, not by Aidvantage.
Not All Loans Moved to Aidvantage
Some loans stayed with Navient. This means some people might have two different loan helpers now. If this is you, you’ll need to:
- Use two different websites
- Call two different help centers
- Make two different payments each month
Sending Checks to Pay Your Loans
If you send checks to pay your loans, you can still send them to the same address. But make sure you write “Aidvantage” on the check instead of “Navient” once Aidvantage tells you they’re your new helper.
Conclusion
The government’s action against student loan servicers is a big step to protect people with student loans. While it might seem complicated, the goal is to make sure everyone is treated fairly and can manage their loans more easily.
If you have student loans, stay informed about your rights and don’t be afraid to ask for help if you need it. Remember, the goal is to make paying back your school loans as easy as possible for everyone.
Whether you’re dealing with Aidvantage or another loan servicer, knowing your rights and staying on top of your loan information is key. If you’re ever unsure about something, reach out to your servicer or consider talking to a student loan expert for guidance.