For nearly a decade, the government took hundreds of dollars from Michelle’s Florida salary every month to recover old student loans that were unpaid and past due. The so-called process ornamentit is legal and can be ordered by the U.S. Department of Education on someone’s salary, tax return, and Social Security to force repayment of outstanding loans.

Michelle’s title began in 2008. As an Orlando public school teacher who only asked to be named because the story involved her personal finances, she struggled for the next eight or nine years to make ends meet while supporting two children.

“I almost lost my house and all because I just couldn’t afford it,” she said. And when about $800 a month suddenly disappeared, Michelle recalled how she faced impossible decisions every day: “I have to think about whether we’ll get this meal or not turn on the lights? What is more important now?” “

After the period of classes ended, Michelle was confident that her student debts had been paid off in full. But this spring, she started getting notifications about another loan she borrowed through a now-defunct loan Perkins loan program during his undergraduate studies 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 currently being phased out since its official closure in September 2017. Michelle applied for loan forgiveness through the Perkins program after graduating from the University of Florida in 1997 and later met the teaching service requirements to obtain it.

So when Michelle opened a letter from her alma mater in July suggesting her Perkins loan was “seriously overdue,” she was stunned. Even more astonishing than the bill itself was the amount she believed she still owed the school: $955,000.02.

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

Turns out Michelle was wrong. Largely thanks to an Internet stranger with years of experience who willingly offered to help with her student loan problem, her situation changed almost overnight.

Michelle’s daughter sent a letter to Reddit – a site Michelle has visited “maybe twice” in her life – in the student loan discussion section. Site users quickly tagged one member — Betsy Mayotte, president and founder of an organization called The Institute of Student Loan Advisors, which provides a range of free services to borrowers like Michelle.

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

courtesy of Michelle via Reddit


Mayotte is a regular on the r/StudentLoans subreddit, where people share personal experiences and tips as they navigate daunting repayment schedules amid the changing rules of debt relief under Biden, and often use it to connect with those in need advice on your loans. In a comment on Michelle’s daughter’s original post, another user calls Mayotte “GOAT”, meaning the greatest of all time.

Mayotte, who had previously worked with Perkins borrowers who were caught off guard by unexpected bills, stepped in as a liaison between Michelle and the University of Florida. It was quickly determined that the original amount was a mistake. A spokesperson from the University of Florida attributed the error to a technical problem at ECSI, a company employed by universities as a loan handler for former students repaying balances under the Perkins program.

While the university said in a statement 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 has ever owed” nearly $1 million in student loans.

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

A spokesperson for ECSI acknowledged the problem with the calculations and acknowledged in a statement that the company had “sent letters to a small number of borrowers reflecting incorrect amounts owed on their loans” over the summer.

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

By the end of August, Michelle had received at least one of several revised statements that would eventually come in the mail from the University of Florida. The new balance was still quite high, around $8,000, and while Michelle said she “obviously felt better because it wasn’t a million,” she also suspected that the adjusted number did not match the balance reflected in her online account. was incorrect.

After earning her bachelor’s degree, Michelle applied for a loan cancellation through the curriculum offered to recipients of the Perkins Loan. He promised to cancel a portion of the borrower’s loan for each academic year spent teaching at certain schools or certain majors. For example, someone who taught at a school serving students from low-income families, or taught a special education, math, science, or foreign language class would qualify for full loan forgiveness.

Michelle fulfilled the requirements in various teaching positions held for five years. She submitted the documents necessary to prove her eligibility for relief under Perkins program guidelines and assumed the loan had been forgiven. But when Mayotte contacted the university again with questions about Michelle’s updated balance, she was told that Michelle’s data never arrived.

“They said they never received it,” Mayotte said. She noted that in her experience, disagreements are common between Perkins loan borrowers and their loan servicers, despite company policies that technically require loan servicers to send borrowers monthly notices of their bills, especially when they are they are expired. Unlike other federal student loans, which 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 tasks to a third party.

“I see people all the time saying, ‘I haven’t had a receipt for my Perkins loan in 10, 20 years,'” Mayotte said. “It really makes it harder for the borrower. You know, it’s often a legitimate bill. But if that’s not the case, what consumer keeps data for 20 years to be able to undo it?”

ECSI did not become a loan servicer at the University of Florida until the early 2000s, many years after Michelle filed her forgiveness papers with the school, and a company spokesperson said she was “not involved” in the record-keeping process that specified Has she been granted relief?

“Nevertheless, we were pleased to help the institution resolve the issues they had with this borrower and rectify the loan forgiveness,” the spokesperson said.

Michelle, fortunately, according to Mayotte, was able to prove that she was eligible for retroactive relief under the Perkins Loan Curriculum. 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 process it completely. I was just grateful.”

While Michelle’s exorbitant student loan balance was a mistake, Mayotte said she had worked with several clients before who actually owed close to $1 million in money borrowed to go to school.

recent report published by the Education Data Initiative points to the ongoing student debt crisis in the US, which has nevertheless been difficult to remedy President Biden’s promise loan forgiveness plan – now on hold under court order and potentially went to the Supreme Court. According to the report, student debt now stands at $1.745 trillion nationwide, bringing the average federal loan debt balance to nearly $38,000. But with Biden’s forgiveness plan stalled, the administration recently made the announcement is an extension of the pause on the repayment of student debt by June next year.

“Education, when funded by student loans, fails to live up to its mantra of being a ‘great equalizer,'” Michelle said in an email, adding that borrowers, especially those who go to work in the public sector, often “age with loan burdens” students and sometimes never, ever fully able to plan for the future, change their lifestyle, save, invest or retire on time. the loans last far too long.”

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