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Maximus Federal Services review

The most popular servicer you've never heard of handles defaulted federal loans.

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If you're more than one year late on a student loan payment, your loans might be transferred to a new servicer: Maximus Federal Services. This isn't a mistake. Maximus is the company that handles repayments on federal loans that are well into default — including around 8 million student loans.

It has two main roles. It manages the Department of Education's Debt Management and Collections System (DMCS). And it manages the call centers for the Department of Education's Default Resolution Group.

How do I know if Maximus is my servicer?

If you're more than 360 days late on a federal student loan, your loans are transferred to Maximus Federal Services. You may receive an email from the company explaining that your loans have been transferred to a new servicer.

But in some cases, you might not be aware that Maximus now has your federal loans. Some borrowers report that it didn't identify itself as a private company when it reached out, leading them to believe it was a part of the Department of Education.

You can check who your servicer is by logging in to the Federal Student Aid (FSA) website and clicking View loan servicer details.

How do repayments work with Maximus?

By the time your loans are with Maximus, your full balance is due. That's because defaulted federal loans go into what is called "acceleration," meaning that your previous repayment plan no longer applies.

Maximus may use a collections agency to contact you about paying your loans in full. And in some cases, your wages or tax refunds may be garnished until you've paid off your balance.

How do I contact customer service?

Getting in touch with Maximus can be tricky — its website mentions nothing about federal student loans. The best way to find Maximus's contact information is to log in to your FSA account search for your servicer.

If you still can't find a way to contact Maximus, you can email DCMS at DMCSResearch@maximus.com. Or, you can contact the Default Resolution Group in the following ways.

Phone

Contact the Default Resolution Group by calling 800-621-3115. If you use a TTY, call 877-825-9923.

Correspondence mailing address

Mail in general questions to the following address:

US Department of Education
PO Box 5609
Greenville, TX 75403-5609

Payment mailing address

You can mail payments to the following address:

US Department of Education
National Payment Center
PO Box 790336
St. Louis, MO 63179-0336

If you mail a payment, write your name and account number on the check or money order. If you don't know your account number, write your Social Security number.

Can I switch to another servicer?

Unlike other federal loan servicers, you can't refinance your way out of dealing with Maximus — private lenders generally don't refinance loans in default. The only way to switch to another servicer is to get out of default. There are a three ways to do this.

Loan rehabilitation

To rehabilitate your loan, you must agree to making nine monthly repayments within 20 days of the due date. Typically, you'll owe around 15% of your monthly discretionary income — which can be as low as $5. This erases the default from your credit history, but not the late payments reported before the default.

Loan consolidation

You can consolidate your loans with a Federal Direct Consolidation loan. You have to either sign up for an income-driven repayment plan, or make three consecutive full repayments on schedule before you sign up.

But if your wages are garnished, or your loans are in collections by court order, you aren't eligible for this option. And it won't erase the default from your credit history.

Repayment in full

If you have the funds, repaying your loan in full will get you out of default. You won't get switched to another servicer — you won't have any servicer at all. Send your repayment to the address above, or potentially make a repayment online.

How to avoid common problems with Maximus

The main problem you'll encounter with Maximus involves getting out of default. Sometimes Maximus is slow to process consolidation, full repayments or other requests for student loan discharge. For example, a borrower filed a lawsuit against Maximus in February 2020 for illegally withholding federal tax refunds, despite qualifying for borrower defense discharge.

Avoid this by staying on top of your account and getting in touch if you see something inaccurate or incorrect on your account. Also stay in touch with your debt collections agency if Maximus isn't being responsive — you may have to make repayments through it instead of Maximus. As a last resort you can file a lawsuit against the company.

Bottom line

Maximus doesn't act like most student loan servicers — and in some cases you might not know that your loans are being held by this company. If you're more than a year late on a federal loan repayment, log in to your FSA account to confirm who your servicer is and learn how to get in touch. Read our guide to student loan defaults to get a rundown of your options if Maximus has take over your loan.

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