Teacher Received $1 Million Student Loan Bill After Thinking Debt Was Settled Decades Ago
By Yahoo News
For almost a decade, the government took hundreds of dollars each month out of the paychecks of a Florida woman named Michelle to recoup old student loans that were unpaid and overdue. The process, called garnishment, is legal, and the U.S. Department of Education can order it for someone’s wages, tax returns and Social Security to force repayment on defaulted 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 involves 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 over this because I just couldn’t afford it,” she said. And with roughly $800 per month suddenly gone, Michelle recalled at times facing impossible decisions day to day: “I’ve got to consider, ‘Do we get this meal or do we keep the lights on? Which is more important right now?'”
After the garnishment period ended, Michelle believed that her student debts were paid in full. But, this past spring, she started receiving notices about a different loan, which she borrowed 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 graduating from the University of Florida in 1997, and later satisfied the teaching service requirements to get it.
So, when Michelle opened a letter from her alma mater in July suggesting that her Perkins loan repayments were “severely past due,” she was stunned. Even more confounding than the bill itself was the amount it said she still owed the school: $955,000.02.
