Woman Shocked She Owes $130,000 After Student Loan Cancellation Notice

A woman was flabbergasted after finding out the $130,000 in student loans she was told had been canceled were not in fact erased and that her student loan provider was charging her twice.

Shun Perkins, a 40-year-old woman living in Houston, originally applied for loan forgiveness under the public service employee and income driven repayment options that President Joe Biden’s administration recently made available to federal borrowers.

A few months ago, Biden announced that 74,000 borrowers would see their student debt disappear, thanks to the Education Department offering an additional $5 billion in forgiveness made available for 44,000 public employees and tens of thousands of borrowers who made at least 20 years of payments on income-driven repayment plans.

In January, Perkins thought she would give the application a shot as she had been on an income-driven repayment program for more than a decade. Two months later, Perkins received an email from loan servicer Missouri Higher Education Loan Authority (MOHELA) saying a consolidation payment had been received and to check her account for details.

Perkins then learned the total loan balance had been wiped clean and left a near $0 owed.

“I did not believe it, so I then logged into my other loan servicer, AES [American Education Service], and the balance there was now $0 as well,” Perkins told Newsweek. “I still did not believe it, so I logged into the Department of Education website and my balance was $0.”

At that point, Perkins checked her credit report and found likewise that all the credit bureaus had completely wiped away the once $130,000 debt.

Perkins said she was “overjoyed” but was hesitant to celebrate because she remembered reading stories of other borrowers who had their loans seemingly cleared, only for the balance to come back and haunt them.

“Not to my surprise, MOHELA sends me another notice, this one via mail stating that loan repayment is due soon,” Perkins said. “I could not believe my eyes to some degree. Then again, I felt that it was too good to be true, so it was expected.”

This time when Perkins logged into MOHELA, the loans were back, and they had also added an additional loan balance from the other servicer. The Department of Education account confirmed the same.

This isn’t the first time Perkins has experienced issues with MOHELA. After finishing school in 2008, she consolidated her student loans to AES and didn’t realize she had been paying the same exact loans twice for 10-plus years, one with MOHELA and one with AES.

“When I look at my credit report, I see the same “Original Loan Amount” twice on each credit report, ultimately, doubling my student loan debt,” Perkins said.

Unsure if she was reading the information correctly, Perkins started looking into it as she looked to buy her first house in 2021 because a lender alerted her to the double debt.

She was told to reach out to MOHELA or get a credit attorney to fix the issue, but Perkins said the second option was out of her price range.

“I tried to reach out to MOHELA and fix it, and it went nowhere, so I gave up,” Perkins said. “I felt defeated.”

Newsweek reached out to MOHELA via email for comment.

What was originally a loan of $35,000 reached more than $130,000.

“I am so confused, depressed and feel defeated about this,” Perkins said. “It is sad how these unexplainable student loan balances will prevent me from everything in life.”

Perkins’ initial relief has disappeared, and she said she’s “back to square one.” While she is preparing to fight the mistake, she said her life feels like it’s “in shambles.”

“I am so intimidated to begin this journey of correcting this huge crippling error again,” Perkins said.

Since graduating, Perkins said she has struggled to make enough money to pay for living expenses, let alone the monthly student loan payment required to make a dent in her debt.

“Because I can only afford to pay the IDR amount, the interest amount outweighs the balance I am paying so my loan balance never decreases,” Perkins said.

Looking back at her time in school, Perkins said she didn’t fully realize the ramifications the loan would have on her life, and she questions if college was worth it.

“I never knew this type of student loan debt would haunt me like this,” Perkins said. “I could never get paid at a job enough to afford the pay off my student loans and pay for the cost of living. It is a never-ending battle.”

Going back in time, Perkins said she would choose not to go to a university, instead maybe opting for a trade school or community college.

“I thought I was making the right decision, as I was the only person and first generation in my family to graduate from a university,” Perkins said. “I now regret that decision. I feel like it was the worst decision I ever made in life.”

The decision has led Perkins to impart a warning to all others considering taking on a loan to attend college or even enter a university at all.

“If you are not going to school to be a doctor, lawyer, engineer, pharmacist, et cetera, do not go to college and collect debt that haunts you forever and takes away your future,” Perkins said.

“It is not worth it. I hate every day I went to college. It is a gimmick to go to school, collect the debt, enter in corporate America, get underpaid while inflation is huge, to live paycheck to paycheck, always stressed, never able to even afford to go to a nice restaurant for dinner or take a trip. It is not worth getting student loans.”

Financial life has become even more complicated for Perkins, who recently was laid off from her job as a business analyst with AIG/Corebridge Financial.

After becoming unemployed in October of last year in a company layoff, Perkins has started her own small business and work in real estate but admits it isn’t making any money yet.

“With all of these factors combined, MOHELA just has added the stress of just trying to survive,” Perkins said.

Perkins said she was barely able to buy a home in 2021 because of the debt she still carries and knows the loan will continue to haunt her.

“It is depressing and financially crippling,” Perkins said. “I literally cry many days….I do not know where to begin to work on getting this mistake fixed.”

If you are a student loan borrower with a similar story, please reach out to [email protected].