A Florida teacher thought she had her student loan debt settled 20 years ago. Then he got a $1 million bill.

For nearly a decade, the government took hundreds of dollars each month from the paychecks of a Florida woman named Michelle to recover old student loans that were unpaid and past due. The process, called garnishment, is legal and the U.S. Department of Education can order it against someone’s wages, tax returns and Social Security to force repayment of delinquent loans.

Michelle’s garnishment began in 2008. As a public school teacher in Orlando, who asked to be identified by her first name only because this story is about her personal finances, she struggled for the next eight or nine years to make ends meet. while supporting her two children.

“I almost lost my house and everything because I just couldn’t afford it,” she said. And with about $800 a month suddenly gone, Michelle recalled at times being faced with impossible decisions every day: “I have to think, ‘Do we get this meal or do we keep the lights on?’ What is most important right now?”

After the award period ended, Michelle believed her student debts were paid in full. But last spring, she started getting notices about a different loan, which she took out through the now-defunct Perkins Loan Program while pursuing an undergraduate degree at the University of Florida.

The program offered low-interest federal loans to undergraduate and graduate students with “exceptional financial need,” according to the Department of Education, and is now being phased out since officially closing in September 2017. Michelle applied for loan forgiveness through the Perkins program after degree from the University of Florida in 1997 and later satisfied teaching service requirements to obtain it.

So when Michelle opened a letter from her alma mater in July saying her Perkins loan payments were “very late,” she was stunned. Even more confusing than the bill itself was the amount it said it still owed the school: $955,000.02.

“I actually got depressed. I hid. I didn’t know how to make sense of it because it was so long ago,” Michelle said. “Well now, I’m ready to retire and lose everything.”

Michelle was proven wrong. Thanks in large part to an Internet stranger with decades of expertise who eagerly offered to help solve her student loan debacle, her situation changed almost overnight.

Michelle’s daughter posted the letter on Reddit — a site Michelle said she had visited “maybe twice” in her life before — in a section devoted to student loan discussions. Site users were quick to point out one member — Betsy Mayotte, the president and founder of an organization called The Institute of Student Loan Advisors, which provides a range of free services to borrowers like Michelle.

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Michelle received a letter from the University of Florida, dated July 22, 2022, which suggested that her unpaid student loan balance was nearly $1 million.

courtesy of Michelle via Reddit


Mayotte is a regular on the site’s r/StudentLoans subreddit, where people share personal experiences and advice as they navigate daunting repayment schedules amid shifting debt relief policies under the Biden administration, and she often uses it to connect with people who need advice about with their loans. In a comment on the original post by her daughter Michelle, another user calls Mayotte “GOAT,” meaning greatest of all time.

Mayotte, having previously worked with Perkins loan borrowers who had been blindsided by unexpected bills, stepped in as a liaison between Michelle and the University of Florida. The original amount was quickly found to be wrong. A University of Florida spokesman attributed the error to a technical issue with ECSI, a company the universities hire to act as a loan servicer for former students paying off balances through the Perkins program.

While the university said in a statement that it could not comment specifically on Michelle’s case, citing student records protection laws, the school noted that “no student at the University of Florida ever owes” nearly $1 million in student loans.

“However, in July, the University of Florida learned that the computer system used by the company that handles billing for the university issued statements with incorrect amounts to borrowers for several schools, including UF,” the statement continued. A university spokesman later said ECSI planned to issue new statements “reflecting the correct balances” within a week of the error being revealed.

A spokesperson for ECSI confirmed the calculation issue and acknowledged in a statement that the company “sent letters to a small number of borrowers incorrectly reflecting amounts owed on their loans” over the summer.

“These letters were immediately corrected and we apologize for any inconvenience this may have caused,” the spokesman said.

By late August, Michelle had received at least one of the many amended statements that would eventually arrive in the mail from the University of Florida. The new balance was still pretty high, around $8,000, and while Michelle said she “felt better, of course, because it wasn’t a million,” she also took issue with the revised number, which didn’t match the balance reflected on her online account, it was wrong.

After graduating with her degree, Michelle had applied for loan cancellation through a tutoring program offered to Perkins loan recipients. It promised to cancel a portion of the borrower’s loan for each academic year taught at certain schools or in certain subject areas. For example, someone who taught at a school serving students from low-income families or taught special education, math, science, or foreign language classes would be eligible for full loan forgiveness.

Michelle met the requirements in various teaching positions she held over the course of five years. She submitted the necessary records to confirm her eligibility for relief under the Perkins program guidelines and assumed the loan was forgiven. But when Mayotte reached out to the university again with questions about Michelle’s updated balance, she was told that Michelle’s records never arrived.

“They said they never received it,” Mayotte said. She noted that, in her experience, miscommunication is common between Perkins loan borrowers and their loan servicers, despite the company’s policies that technically require servicers to send borrowers monthly notices about their accounts, especially when are overdue. Unlike other federal student loans that are managed by vendors or servicers affiliated with the Department of Education, Perkins loan servicers have historically been the universities themselves, which then outsource loan servicing work.

“I see people all the time who say, ‘I haven’t had an account for my Perkins loan in 10 years, 20 years,'” Mayotte said. “It makes it very difficult for the borrower. You know, a lot of times it’s a legitimate account. But if it’s not, what consumer keeps records for 20 years to be able to turn it around?”

ECSI didn’t become a loan officer for the University of Florida until the early 2000s, years after Michelle submitted her forgiveness paperwork to the school, and a company spokesman said it had “no involvement” in the record-keeping process that determined whether or not she was granted relief.

“However, we were happy to assist the institution with the issues it had with this borrower and correct the loan write-off,” the spokesperson said.

Michelle, “fortunately,” according to Mayotte, was able to prove her eligibility for retroactive relief through the Perkins Tuition Loan Program. Her final balance: $408, which she said was paid in full two weeks ago.

“The only word I had was amen when I got that letter,” Michelle said. “I couldn’t quite process it. I was just grateful.”

Although Michelle’s exorbitant student loan balance was a mistake, Mayotte said she has worked with a few clients in the past who actually owe nearly $1 million on money they borrowed to go to school.

A recent report published by the Education Data Initiative highlights the ongoing student debt crisis in the US, which has proven difficult to address despite President Biden promised it loan forgiveness plan — now on hold per court order and possibly headed to the Supreme Court. Student debt currently stands at $1.745 trillion nationally, according to the report, which puts the average federal loan debt balance at just under $38,000. But with Biden’s pardon plan stalled, the administration recently announced it extends the pause for student debt repayment by June of the following year.

“Education, when funded by student loans, does not live up to its mantra of being the ‘great equalizer,’” Michelle said in an email, adding that borrowers, particularly those who continue to work in the public sector, are often “aging. with the burdens of student loans and sometimes never, ever being fully able to make future plans, upgrade lifestyles, save, invest or retire on time. loans take too long.”

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