Bamboozled: When payback is a nightmare

Student loan payback is a big challenge for many graduates as incomes aren’t keeping up with loan obligations.

Betsy Brevitz has struggled over the years, yet she’s never missed a payment.

But that’s not what her loan servicer said. It said she missed two payments, even though the Essex County woman provided proof that the funds were taken from her bank account.

“I have consolidated my student loans once or twice, and they have switched hands more times than I can remember since I graduated 14 years ago,” Brevitz said “I’ve never had a problem with lost payments before.”

In the 1990s, Brevitz left her publishing job to follow her real dream: to become a veterinarian. She took a part-time job as a veterinary assistant while she attended some science classes she would need to apply to vet school.

“When I wondered how I was going to pay for vet school, the vet I worked for said, ‘Eh, just borrow it. You’ll pay it off before you know it,’ ” she said.

So Brevitz borrowed the entire $150,000 she needed to pay for her education at Tufts University, and she started classes in 1994.

Through the years she had two children and took time off to write a book on dog health. By 2005, she was working as a vet full time. And she always made her loan payments on time.

To date, Brevitz owes $55,387 to three different lenders, with payments that total $1,605 per month.


On March 20, Brevitz received notice that the servicer of her U.S. Department of Education student loan, to which she pays $958 per month, changed from Direct Loan to EdFinancial.

Brevitz uses an online bill paying service to make her payments, so she went to the site to change the account number and payment address to the new loan servicer. When she did, the site said the bill paying service would automatically update payee changes when it received information from the payee.

“I thought, ‘Oh, okay, if you say so,’ until I logged onto my new EdFinancial account in May and discovered that it had not received the two payments of $958 that cleared my checking account on March 30 and May 1,” she said.

Brevitz called Direct Loan — the old loan servicer — to see if it had received the payments in error. Direct Loan said it had no record of receiving the payments, but if her bank would fax the information to the servicer, it would investigate further.

“I was told it could take 30 to 60 days for Direct Loan to send the money to EdFinancial after it was located,” she said.

Brevitz had to jump through a few hoops to give Direct Loan the permission it said it needed to discuss the missing payments with the bank, and that was finally completed on May 25. In the meantime, Brevitz asked the bank to send the proof of payment to EdFinancial so her account wouldn’t be considered delinquent.

Brevitz said she called Direct Loan for an update on June 7.

“They had no record of having received information about the missing payments,” she said, noting that she had the proof of contact between the bank and the loan servicer.

She asked the bank to resend the information to Direct Loan.

On June 27, she called Direct Loan again. It said it didn’t have the payments, or any record of receiving information from the bank.

Brevitz called the bank again, and she and a rep had a conference call with Direct Loan. The bank confirmed the fax number, then faxed the information to Direct Loan again.

Twelve business days passed.

“I reached the end of my Direct Loan rope on July 16 — three-and-a-half months after the first payment disappeared into the ether — when the Direct Loan representative I got on the phone insisted that it was impossible for Direct Loan to have received this money in the first place because they were no longer servicing the loan,” she said.

“He had no idea what I was talking about. I replied, ‘Please tell me that you have a record of the many times I’ve called about this over the past two months.’ ”

She said the rep said it didn’t matter whether or not there was a record — because it was “impossible.”

Brevitz asked for a supervisor. The supervisor had no update for Brevitz. Brevitz asked to speak directly to the unit that was handling the case. The supervisor said no, but promised to call Brevitz in 24 to 48 hours with an update.

No call.

On July 19, Brevitz called EdFinancial.

“I tell the rep that I have been doing my damnedest to get Direct Loan to send the money to them, nothing has worked, and I’ve had it with calling Direct Loan,” she said. “I ask the rep to put the nastiest person he can think of in charge of beating the money out of Direct Loan.”

As of Aug. 9, Brevitz’s EdFinancial account still showed $1,918 was past due.

That’s when she reached out to Bamboozled.


A delinquent payment record is bad enough because of potential negative credit ramifications, but the missing payments were causing another problem for Brevitz.

Money’s been really, really tight. Brevitz’s health insurance payments for her family of four recently went up by $400, and she’s had to dip into savings to afford the premium payments.

“That, combined with higher food and gasoline prices this year, was more than our already tight budget could handle,” she said.

The family canceled a driving vacation they had planned to visit relatives. There were other cutbacks, too. They usually help Brevitz’s parents pay their property taxes, but this summer, there was no money to spare.

Brevitz applied to EdFinancial for a financial hardship forbearance, which would have lowered her payments from $958 to $500 per month. She hoped the lower payments, which would only last for 12 months, would help the family get through the lean times.

“I was told I can’t apply for a forbearance until my loan payments are up to date, which they won’t be until Direct Loan sends EdFinancial $1,918,” she said.

We asked both institutions to review the account, and we provided to both servicers — again — the proof of payment from the bank. Magically, within a few days, the lost payments were found by Direct Loan.

“Direct Loan just left a voice mail and said the money is on its way to EdFinancial,” Brevitz said on Aug. 16.

EdFinancial didn’t respond to our request for comment, and Direct Loan would only say the issue has been resolved.

As of Friday, the payments still hadn’t posted to the account, but EdFinancial told Brevitz that Direct Loan said they were “on the way.” EdFinancial also said she could get a “conditional forbearance” to reduce her future monthly payments before the Direct Loan payments are credited.

“I’m really happy, but I’m also really disturbed that it took getting a reporter involved to have this fixed,” she said. “I was trying my best and making repeated efforts, and I think it’s really sad that it takes the fear of bad press to make somebody do something they should have done months ago.”