Giving My Student Loan Servicer a $560 Interest-Free Loan

Our story begins on April 8th, 2024. I was ecstatic: I’d just finished paying off my student loans. Well, maybe not ecstatic, given the Biden administration’s lackluster student loan forgiveness policy, but it was a weight off my shoulders. My joy lasted two days, until April 10th, when my monthly autopayment got processed and Aidvantage took $560 out of my bank account, leaving one of my loans with a balance of negative $560.

Wait, what?

Finding nothing useful in the help pages, on April 15th I submitted a support request:

I made a manual payment to finish paying off my loans around the time of my monthly automatic payment. Now one of my loans has a -$560 balance. Can you… send that back to me?

Just two days later, I received a reply on April 17th:

Thank you for reaching out to us regarding the overpayment amount of $560.00. I’m happy to assist.

This overpayment amount will be refunded to you. Currently the estimated timeframe for a refund to be deposited into your bank account is 8-12 weeks.

Let’s get this out of the way: 8-12 weeks is an absurd amount of time to return the money. But what could I do? I set a reminder on my calendar.

On July 10th, I called back to ask where the money was, and a support agent informed me that a check was sent out and should have arrived by now.

Wait, a Check?

Something odd has happened at this point: the original response said a refund would be “deposited in [my] bank account”, not that a check would be sent out! Nobody has been able to explain this portion of the story to me. All I know is that — despite having my bank account information, despite me explicitly opting in to for paperless communications — someone at Aidvantage decided to send me a check. Or, at least, they allege they sent me a check. They didn’t send certified mail, ask for a signature, or even provision a tracking number from the USPS, so there’s no evidence a check was ever sent.

Again, what could I do? I asked the support agent if they could reissue the check, and they offered me a more appealing option: an ACH deposit. That would be great, I said. I gave them my account and routing numbers (which they already had) and they submitted an ACH transfer, due to be deposited into my account in 3-4 weeks.

Wait, 3-4 weeks?

Since when does an ACH pull take 3-4 weeks? 3-5 days is normal, and it’s usually shorter! I have no clue what’s going on here.

But what could I do? I set a reminder on my calendar. After 4 weeks, I called back on Thursday, August 15th. The support agent informed me that they could see the ACH was sent out and that it should, for sure, we promise, be deposited into my account on Monday.

At this point the process of calling back is beginning to wear on me. I don’t have the energy to do it on a Monday. I called back this morning, on August 20th. After hanging up on me several times, my fourth or fifth attempt of the day gets through to a support agent. He thanks me for my patience and puts me on hold, says he’ll look into it and might need to ask his supervisor. After a couple minutes he thanks me for waiting and says “it says here that before we can reissue a refund you have to either return the check to us — which you can’t do, because it didn’t physically get to you — or wait for it to go stale, which happens after… fourteen months? That’s ridiculous. Let me ask for clarification.” It was a small comfort that the support agent sounded roughly as baffled by this as I was. He re-read it a few times, possibly to make sure he wasn’t reading the Looney Tunes version of the refund procedures. No clarification came, and he sounded apologetic as he told me to check back in late August, 2025.

Wait, August 2025?

Astute readers may have noticed that I got the first message from Aidvantage acknowledging the refund on April 17th, and fourteen months after April 2024 is June 2025. However, as my support agent informed me, the refund check wasn’t actually created until June 24th, 2024 — Aidvantage just twiddled their thumbs for 68 days before bothering to print the check.

As for why a check was sent instead of an electronic refund in the first place? My support agent had no clue. If we consider the purpose of a system to be what it does, however, the mechanism is clear: Aidvantage pretended to send me a check because it’s good for their balance sheet if I give them a $560 loan, interest-free, for a couple years. What am I going to do, stop giving them business? I’m not their customer, after all.

Kafka Was Right

Franz Kafka, working at an insurance company at the beginning of the 20th century, saw these systems ossifying, and had a remarkably clear vision of where it was all headed: a society where all human coordination of services is replaced with bureaucratic instruments. The support agents I talked to at Aidvantage had no power to help me. They also had no ability to contact anyone who could help me: the bureaucratic machine airgaps the people I can talk to from the people with that power.

A bureaucracy is an inversion of responsibility; instead of an organization being responsible for provisioning its services to you, you are responsible for filing the correct paperwork via the correct avenues at the correct time. Will an organization make it clear to you what services they provide? What paperwork to file? Where, when, and how to file it? That sounds expensive.

Kafka was powerless to stop the transformation he saw. I think of him often, when I’m navigating an endless phone tree for the fourth or fifth time, or when I have an issue with a website and the only way to get support is to know an engineer working on it.

I’ve set a reminder on my calendar for August 25th, 2025. I’ll see you then.