They were told their private student loans were paid off. Then they were sued.

**From Business Insider’s Ayelet Sheffey:** 
In February 2024, Ashley Carlson got an unexpected email: “Congrats! Your SoFi Student Loan is 100% paid off.”

The 35-year-old mom of two couldn’t believe it. She had about $55,000 in unpaid student debt, which she’d borrowed to finance her bachelor’s degree in construction management. She logged into her account. Balance: $0.

“Maybe I got lucky for once,” Carlson thought. When business at her architecture firm slowed in 2023, she’d stopped making her $800 monthly payments in full. For months, she’d been calling SoFi, the private company that managed her loans, asking for lower payments or a financial hardship forbearance, without success.

Carlson took the email at face value, thinking her lender had granted her request for relief, and didn’t question it further. She wishes she had.

Ten months after the “Congrats!” email, a manila envelope appeared on her front porch. SoFi was suing to collect her full balance.

It turns out Carlson’s loan had effectively disappeared in February — not because it was forgiven, but because it was transferred to a third party. To this day, she doesn’t know where her balance went.

This is an extreme example of the kind of confusion private student-loan borrowers face when their loans move toward default, which typically occurs after about 120 days without a full payment.

Interviews with dozens of borrowers, lawyers, and industry representatives — along with a review of court filings and other public records — reveal widespread confusion over loan balances and missing or conflicting notices as borrowers default and sometimes face litigation. In a review of complaints about private lenders submitted to the Consumer Financial Protection Bureau over the past decade, Business Insider found hundreds related to loan transfers, missing or erroneous documentation, or confusion about obtaining payment status updates.

[Read more about the cost of confusion associated with student debt. ](https://www.businessinsider.com/student-loan-borrowers-communications-transfers-lawsuits-2026-5?utm_source=reddit&utm_medium=social&utm_campaign=insider-economy-sub-post)