Student Loan Borrowers Affected by Payment Processing Errors: What Happened and What to Do
What Happened With These Student Loan Payments
Between 2017 and 2023, several student loan servicers—the companies that collect your monthly payments and manage your account—made errors when processing payments for borrowers in income-driven repayment plans. These errors meant that some payments were not credited correctly to your account, even though the money left your bank. For borrowers in Public Service Loan Forgiveness (PSLF) programs, the mistakes were especially serious because incorrect payment records can delay or block forgiveness may be able to access.
The U.S. Department of Education discovered these errors and required the servicers involved to notify affected borrowers and fix their records. However, fixing the records alone was not enough for some borrowers—those whose payment history was too damaged to repair had to reapply for their repayment plans to start fresh with accurate records going forward.
If you received a letter from your loan servicer saying you must reapply, or if you are unsure whether you were affected, this guide explains what the errors were, who was most likely affected, and what your next steps are.
Key Takeaways
- Payment processing errors by servicers between 2017 and 2023 meant some borrowers' payments were not credited to their accounts correctly, even though money left their bank.
- Borrowers in income-driven repayment plans and Public Service Loan Forgiveness programs were most affected because these programs track payment history closely.
- If your servicer sent you a letter requiring reapplication, you must reapply to your repayment plan to restore accurate payment records; the servicer will tell you the deadline.
- When you reapply, your servicer should restore any payments that were actually made but incorrectly recorded, so your payment count toward forgiveness is not lost.
- Contact your servicer directly if you did not receive a letter but believe you were affected, or if you are unsure whether your account was corrected.
Which Servicers Made Errors and When
The servicers involved in the payment processing errors were Navient, Aidvantage (formerly Maximus), and Mohela. The errors occurred over several years—some dating back to 2017—and affected borrowers in income-driven repayment plans such as Income-Based Repayment (IBR), Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), and Income-Contingent Repayment (ICR). Borrowers pursuing Public Service Loan Forgiveness were hit hardest because PSLF requires 120 may have access to payments, and miscounted or missing payments directly delayed forgiveness.
The Department of Education required servicers to notify all affected borrowers by mail. If you received a letter from your servicer between late 2022 and 2024 mentioning payment processing errors, that letter explained whether your account was corrected automatically or whether you needed to reapply.
Why Some Borrowers Must Reapply Instead of Just Getting a Fix
When a payment is not recorded correctly, the servicer has two options: restore the payment record if the error can be traced and fixed, or ask the borrower to reapply to their repayment plan so a new, clean record begins. Reapplication was required when the payment history was too corrupted to repair reliably—for example, when multiple payments over years were missing or misapplied, making it impossible to reconstruct what actually happened.
Reapplication does not mean you lose the payments you actually made. When you reapply, your servicer is supposed to credit you for all payments that were confirmed to have been processed, even if they were not originally recorded correctly. The reapplication simply gives you a fresh start with an accurate record going forward. However, the process takes time, and you must act by the deadline your servicer provided in their letter.
How to Reapply for Your Repayment Plan
Your servicer's letter will include a deadline for reapplication—this is not a suggestion, and missing it can result in your loans being moved to a standard 10-year repayment plan. Contact your servicer immediately to find out how to reapply. Most servicers allow you to reapply online through your account portal, by phone, or by mail.
When you reapply, you will need to provide income information again, just as you did when you first entered the income-driven plan. Have your most recent tax return or pay stubs ready. You will also need to confirm which repayment plan you want—if you were in PAYE or REPAYE before the error, you should reapply to the same plan unless you have a reason to switch.
After you reapply, ask your servicer in writing to confirm that your previous may have access to payments are being credited to your account. If you were pursuing PSLF, ask them to provide a written statement of how many may have access to payments you now have on record. Keep this documentation in case you need to dispute the count later.
What Happens to Your Payment Count Toward Forgiveness
If you were working toward Public Service Loan Forgiveness or another forgiveness program, the reapplication should not erase your progress. The Department of Education required servicers to restore all confirmed payments to your account when you reapply. However, this process is not automatic, and errors can still happen.
Before you reapply, request a payment history statement from your servicer showing every payment you have made and whether it was counted as a may have access to payment. After you reapply, request an updated statement 30 days later to confirm that your previous payments were restored. If the count does not match what you expected, contact your servicer and the Department of Education's Federal Student Aid ombudsman at studentaid.gov/feedback-ombudsman.
If You Did Not Receive a Letter From Your Servicer
Not every affected borrower received a notification letter, either because the servicer's mailing address on file was outdated or because the borrower's account was corrected without requiring reapplication. If you were in an income-driven repayment plan between 2017 and 2023 and you suspect your payments may have been miscounted, contact your servicer directly and ask whether your account was affected by the payment processing errors.
Provide your servicer with your loan account number and ask them to review your payment history for any gaps or errors. If they confirm errors were made and corrected, ask for a written statement of your current payment count. If they say your account was not affected, ask them to confirm this in writing as well. Keep all written responses for your records.
What to Do if You Disagree With Your Payment Count
If you reapply and your payment count does not match what you believe it should be, or if you find errors in your restored payment history, you have the right to dispute it. Start by contacting your servicer and asking them to explain how they calculated your payment count and which payments they credited.
If your servicer cannot resolve the dispute, you can file a complaint with the Federal Student Aid ombudsman at studentaid.gov/feedback-ombudsman. The ombudsman is free and does not take sides with either borrowers or servicers—they investigate the facts. You can also file a complaint with the Consumer Financial Protection Bureau at consumerfinance.gov/complaint if you believe the servicer's error caused you financial harm.
Frequently Asked Questions
Do I have to pay anything to reapply for my repayment plan?
No. Reapplication is free. If a servicer or third party asks you to pay a fee to reapply or to fix your payment records, that is a scam. Contact your servicer directly through the phone number on your loan statement or at studentaid.gov to find the official contact information.
What if I already switched servicers since the error occurred?
Your loan may have been transferred to a new servicer, but the payment history should have transferred with it. Contact your current servicer and ask them whether your account was affected by the errors at the previous servicer. If it was, you may still need to reapply even though you are now with a different company.
Can I get money back if the error cost me interest or late fees?
The Department of Education required servicers to correct payment records and restore may have access to payments, but compensation for interest or fees caused by the errors varies. Some servicers have offered refunds or account credits to affected borrowers. Ask your servicer whether compensation is available for your account, and if they refuse, file a complaint with the Consumer Financial Protection Bureau.
What happens to my loans if I miss the reapplication deadline?
If you miss the deadline, your loans will typically be moved to a standard 10-year repayment plan, which will increase your monthly payment. Contact your servicer immediately if you missed the deadline and ask whether they will grant an extension or allow a late reapplication. Explain that you did not receive the letter or did not understand the deadline.
Does reapplying affect my credit score?
Reapplying for a repayment plan does not involve a credit check and will not affect your credit score. Your servicer only needs income information to recalculate your payment amount under the income-driven plan.