A Florida teacher thought she paid off her student loan debt 20 years ago. She then received her $1 million bill.


For nearly a decade, the government took hundreds of dollars each month from the salary of a Florida woman named Michelle to collect old student loans that were outstanding and delinquent.a process called garnishis legal, and the U.S. Department of Education can order forced repayment of defaulted loans for someone’s wages, tax returns, and Social Security.

Michelle’s trinkets began in 2008. As an Orlando public school teacher, she asked to be identified by her first name simply because this story involved her personal finances.

“I almost lost my house and everything because I had no money,” she said. And with about $800 a month suddenly gone, Michelle remembered that she faced impossible decisions every day. “

After the foreclosure period ended, Michelle believed her student debt had been paid in full. Perkins Loan Program while earning a bachelor’s degree from the University of Florida.

The program, which provided low-interest federal loans to undergraduate and graduate students with “special financial needs,” according to the Department of Education, has now been phased out since it officially closed in September 2017. deprecated. Graduated from the University of Florida in 1997 and subsequently fulfilled and obtained the Education Services requirements.

So when Michelle opened a letter from her alma mater in July, suggesting that her Perkins loan repayments were “significantly behind schedule,” she was stunned. What was missing was the amount she said she still owed the school: $955,000.02.

“I actually got depression. I went into hiding. It was so long ago, I didn’t know how to figure it out,” Michelle said. , I’m about to retire and I’m about to lose everything.”

Michelle turned out to be wrong. Thanks to an internet stranger with decades of expertise who eagerly offered help in solving her student loan debacle, her situation changed almost overnight.

Michelle’s daughter posted a letter on Reddit, a site Michelle had visited “probably twice” in her previous life, in a section dedicated to discussing student loans. Tagged Betsy Mayotte, president and founder of an organization called The Institute of Student Loan Advisors, which offers a variety of free services to unsolicited borrowers.

Michelle received a letter dated July 22, 2022 from the University of Florida. It implied that her student loan balance was almost $1 million.

Courtesy Michelle via Reddit

Mayotte is a regular on the site’s r/StudentLoans subreddit, where people share personal experiences, tips, and loans as they navigate tough repayment schedules amid changes in debt relief policies under the Biden administration. I use it frequently to connect with people who need advice about. In a comment on the original post from Michelle’s daughter, another user called Mayotte “GOAT.” This is the best abbreviation ever.

Mayotte, who had previously worked with a Perkins loan borrower who was caught off guard by an unexpected charge, stepped in as a liaison between Michelle and the University of Florida. Her original amount was quickly ruled out as a mistake. A spokesperson for the University of Florida believes the error was due to a technical issue with her ECSI. ECSI is the company that the university hires as her loan servicer to repay the original student loan through the Perkins program.

In a statement, the university said it could not comment specifically on Michelle’s case, citing student record protection laws, but the University of Florida said, “University of Florida students have spent nearly $1 million in student loans to date. I have never borrowed anything,” he said.

“However, in July, the University of Florida learned that a computer system used by a company that processes the university’s bills issued statements for incorrect amounts to many school borrowers, including UF. ‘ continued the statement. A university spokesperson later said ECSI planned to release a new statement “reflecting the right balance” within a week after the error was revealed.

An ECSI spokesperson confirmed the calculation problem and admitted in a statement that the company had “sent letters to a small number of borrowers stating that the amount owed on the loan was incorrect” over the summer. .

“These letters will be corrected promptly and we apologize for any inconvenience caused,” the spokesperson said.

By the end of August, Michelle finally received at least one of several revised statements mailed from the University of Florida. The new balance was still quite high, around $8,000. Michelle “feels better, of course, because it wasn’t a million,” she said, but she also doubted the corrected figure, which didn’t match the balance reflected in her account online. ,I was wrong.

After graduating with a bachelor’s degree, Michelle applied for a loan Cancel Through education programs offered to Perkins loan recipients. It promised to cancel part of the borrower’s loan for each academic year taught at a particular school or in a particular field. For example, a person who taught at a school that served low-income students or taught special education, math, science, or foreign language classes would be eligible for full loan forgiveness.

Michelle has held and completed various teaching positions over the past five years. She submitted the necessary records to confirm that she was eligible for relief under the Perkins guidelines of her program, and assumed her loan was forgiven. However, when Mayotte contacted the college again about her Michelle’s updated balance, she was told that she had not received Michelle’s record.

“They said they never received it,” Mayotte said. Did. This is despite company policy technically requiring loan servicers to send borrowers monthly notices about their bills, especially if they are overdue. Unlike other federal student loans that are administered by vendors or servicers affiliated with the Department of Education, Perkins LoansHer servicers have historically been the colleges themselves and have outsourced their loan servicing operations to third parties. I’m here.

“I often see people saying, ’10 years, 20 years, I haven’t got a bill for the Perkins loan,'” Mayotte said. “It’s very difficult for the borrower. You know, a lot of the time it’s a legitimate bill. But when it’s not, he keeps records for 20 years so any consumer can push it back.” do you hold it?”

ECSI didn’t become the University of Florida’s loan servicer until the early 2000s, a few years after Michelle submitted her forgiveness papers to the school. she got relief.

“Nevertheless, we are pleased to assist the agency with this issue with the borrower and correct the loan forgiveness,” the spokesperson said.

According to Mayotte, Michelle was “thankfully” able to prove she was eligible for retroactive relief through Perkins’ loan education program. was paid in full, she said.

“When I got the letter, the only words I had were Amen,” Michelle said.

Michelle’s exorbitant student loan balance was a mistake, but Mayotte worked with several clients who actually owed close to $1 million on the money they borrowed to attend school.

Recent report Data released by the Education Data Initiative points to an ongoing student debt crisis in the United States. President Biden’s Promise Loan repayment plan — currently pending Potentially, pursuant to a court order went to the Supreme CourtStudent debt now stands at $1.745 trillion nationwide, with the average federal loan balance just under $38,000, according to the report. But as Biden’s forgiveness plan stalled, the administration recently Extending suspension About student loan repayments by June next year.

“Education fails to live up to its mantra as the ‘great equalizer’ when it’s financed with student loans,” Michelle said in an email, adding that borrowers, especially those who went to work in the public sector, often ” I’m getting old,” he added. You may be burdened with student loans and completely unable to plan for the future, improve your lifestyle, save, invest, or retire on time. Loans are perfectly long lasting. ”


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Written by Natalia Chi

Chicago Popular; Chicago breaking news, weather and live video. Covering local politics, health, traffic and sports for Chicago, the suburbs and northwest Indiana.

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