Is Aidvantage Legit? Getting the Facts on This Student Loan Servicer
If you have federal student loans that need servicing, you may have recently been transferred to a company called Aidvantage. But is this unfamiliar servicer legitimate and trustworthy?
With student debt relief at the top of many borrowers’ minds, it’s reasonable to approach new servicers carefully. This factual article will analyze Aidvantage’s background, services, and consumer protections to help you determine if they’re a reliable loan servicing option.
Understanding Aidvantage’s Origins
In 2021, a loan servicing company called Maximus began the process of acquiring Navient’s federal student loan servicing operations. Navient had been the largest servicer of federal student loans but had faced lawsuits claiming they engaged in predatory lending and unfair debt collection practices.
As part of the acquisition, Maximus formed a new non-profit subsidiary focused on federal loan servicing called Aidvantage.
In late 2022, the U.S. Department of Education formally announced they were transferring the federal student loan accounts previously handled and serviced by Navient over to Aidvantage instead. So while the Aidvantage is a new servicer, they directly inherited an extensive portfolio of federal loans from the longstanding Navient business. This decision predominantly impacted borrowers with Federal Family Education (FFEL) loans.
It’s understandable why borrowers may hesitate, given Navient’s controversial reputation. However, as part of the acquisition terms with Maximus, Navient’s entire executive team was replaced by leaders from Maximus’s other non-profit service divisions to ensure more borrower-friendly practices.
The Consumer Financial Protection Bureau (CFPB) also actively monitored the transition from Navient to Aidvantage. Their oversight helps provide assurances around improved accountability and transparency.
Aidvantage’s Non-Profit Status Offers Consumer Protections
One key distinction between Aidvantage and many past federal loan servicers is Aidvantage’s registered non-profit, public benefit corporation status in Virginia. This may offer borrowers added consumer protections compared to dealing with a for-profit servicer.
As a non-profit operation, Aidvantage has a duty to operate for the benefit of student loan borrowers rather than shareholders or investors. Any revenue beyond operating expenses must be reinvested into enhancing their platforms, customer service capabilities, payment assistance programs, and staff training. They are also subject to oversight from both state and federal regulators regarding their borrower benefit commitments.
Borrowers still retain the option to apply to have their federal loans transferred to another eligible non-profit servicer if they are unsatisfied. However, Aidvantage’s mandated focus on the public interest rather than profits could lead to better service quality and debt relief outcomes.
Early independent reviews from groups like the Student Borrower Protection Center seem cautiously optimistic about the potential based on these non-profit protections, and there have so far been no instances of consumer complaints.
What Types of Federal Loans Does Aidvantage Service?
Now that Navient’s previous accounts have been transferred, Aidvantage services federal student loans issued under the Federal Family Education Loan (FFEL) Program, including Stafford, PLUS, and consolidation loans.
Aidvantage does not currently service accounts issued under the separate William D. Ford Federal Direct Loan (Direct Loan) Program. So if you only have Direct Loans and no FFEL loans, you likely won’t encounter Aidvantage as your servicer. Aidvantage also does not handle private student loans.
Key Services Offered
As with any student loan servicer, Aidvantage handles typical loan servicing functions like:
- Collecting loan payments
- Applying payments across multiple student loans
- Processing forbearances, deferments, and income-driven repayment plans
- Responding to customer service inquiries
Aidvantage has been actively working to enhance its digital experience, including the addition of updated online dashboards and mobile apps for borrowers. They also provide specialized assistance for military service members and borrowers having difficulty making payments.
While still new, early reviews of Aidvantage’s borrower-facing tools have been reasonably positive compared to their predecessor, Navient. As they continue to work on ramping up services, ratings are likely to stabilize. But so far, there have been no glaring issues reported.
Should You Trust Aidvantage as Your Student Loan Servicer?
Given its unique history and non-profit status, is it safe for borrowers to rely on Aidvantage to handle federal student loan accounts? Based on an analysis of facts around their structure, oversight, inherited assets, and revamped leadership, Aidvantage appears positioned to provide stable servicing options to FFEL borrowers.
While still proving themselves, their public benefit corporation standing and external monitoring offer added reasons for consumers to potentially trust Aidvantage more than prominent past servicers.
As always, borrowers should remain vigilant about student debt obligations, ask questions, and report any complaints directly or via the CFPB. However, current signs point to Aidvantage operating with legitimacy in serving the FFEL community moving forward.