Inside a mom's legal battle to turn her $55,000 student-loan balance to $0

After Ashley Carlson puts her two kids to bed, she stays up until 2 a.m. most nights drafting court filings — work she never imagined doing before SoFi sued her to collect $55,000 in defaulted student debt.

For the last two years, she's represented herself in a court battle with the private student-loan lender.

Best-case scenario: Carlson gets her case dismissed, and her loans are discharged. In the worst case, she'll owe her defaulted balance plus hundreds of dollars in legal fees, with the risk of wage garnishment and a hit to her credit score if she doesn't pay up.

Carlson is pinning her legal hopes on an email she received in February 2024, congratulating her for paying off her balance. She believed that SoFi was granting her the payment relief she'd been requesting, when in fact, her loan balance had been transferred elsewhere. That miscommunication changed the course of her next two years.

"I wouldn't have had to go through this if, at one point, I received an email saying, 'Hey, your loan's been taken over by X company,'" Carlson said, adding that if she knew she was at risk of a lawsuit, she would've made at least a partial payment. SoFi said the congratulations email was a mistake, and that it sent Carlson subsequent emails about her payments, which Carlson said she didn't receive.

Carlson's experience offers a window into what can happen when private student-loan borrowers fall behind, and their debt changes hands. Interviews with borrowers, attorneys, and industry representatives, along with a review of court filings and consumer complaints, show how confusing notices, unclear communications, and shifting loan management can leave borrowers exposed to lawsuits, fees, and damaged credit.

Representing herself against SoFi, Carlson feels a responsibility to keep fighting. The emotional and financial toll of the litigation, though, is weighing her down.

"I'm exhausted. I'm drained. I'm burned out on so many levels," Carlson said. "But what else am I going to do?"

'I'm ready to fight every day'

Carlson works full-time at a consulting firm and part-time at the construction company she runs with her husband. She says the court case has become her third job. In between grocery shopping and kids' doctor visits, she'll often stop by the courthouse to drop off the latest filing.

Carlson took out $110,000 in private loans to get a degree in construction management at Wentworth Institute of Technology in Massachusetts. When she graduated in 2013, she consolidated her balance with her husband's loans, totaling $270,000. The couple made consistent $860 monthly payments for about a decade, until the pandemic hit and business at their construction company dried up.

In December 2023, after Carlson realized she couldn't afford full payments anymore, she called SoFi. Could they reduce her monthly bill, or defer payment until she had more income?

"Between my student loans and mortgage, car payments, childcare, and then Christmas, it got to the point where I was like, 'Do I feed my kids or do I pay my student loans?'" Carlson said.

SoFi rejected her request.

A few weeks later, Carlson received an email from SoFi stating, "Congrats! Your SoFi Student Loan is 100% paid off." She said she thought her prayers had been answered when she logged in to her account and saw a $0 balance. In reality, her account had been transferred to a third party. She said she wasn't notified, so she couldn't have made a payment if she wanted to.

Ten months later, she found a manila envelope on her front porch. It contained paperwork stating that Carlson was in default, and SoFi was suing her to collect the remaining balance.

Here's how things went awry: the first time Carlson failed to make a full payment in 2023, SoFi labeled her delinquent. After a set period of missed payments — typically 120 days — lenders place delinquent accounts in default and pursue collections, either in-house or through third parties.

This is a common breaking point in communications, according to Simon Goldenberg, a New York debt-relief lawyer. Though private lenders face a myriad of laws about how and when they are able to communicate with borrowers, it can be difficult for both borrowers and regulators to track a loan when it changes hands through default and collections, said Goldenberg.

Carlson says SoFi should honor the $0 balance her account showed in February 2024.

A SoFi spokesperson said the "Congrats!" email was mistakenly generated by its marketing platform, and did not absolve Carlson of her payment obligations. They said the company sent subsequent communications regarding Carlson's payments, but did not provide Business Insider with documentation of those communications.

Carlson said she never received those communications or any notice retracting the "Congrats!" email.

The SoFi spokesperson said the company ensures it communicates effectively with borrowers to make them aware of their repayment options, including deferment and payment extension offers.

"These measures can help the vast majority of struggling borrowers avoid further loan delinquency or default," the spokesperson said.

Carlson maintains she received an email that her loans were zeroed out, and so they should be zeroed out. Beyond that, she wants to use her experience to help others in similar situations. Recently, at pre-school pickup, she met another parent who was also being sued over her private student loans.

"I want to help," Carlson said. "I'm ready to fight every day, all day."

'No one teaches you how to do this'

Carlson has filed more than a dozen legal documents, including discovery requests and motions to dismiss. She's also discussed and declined settlement offers from SoFi, saying she can't afford any lump-sum payment they've offered.

"I am a working mother with two small children," Carlson wrote in a May email to SoFi's legal team. "Between the cost of groceries, childcare, medical bills, other student loans, and my mortgage, my family is completely financially maxed out. I have zero savings. I do not have a lump sum of $45,000, I do not have $22,000, and I cannot afford a monthly payment plan."

Lenders have a business interest in helping borrowers pay off their loans, said Scott Buchanan, executive director of the Student Loan Servicing Alliance, which represents private and federal student-loan servicers. If they default, it's common for the lender to sue.

Had she received more extensive communication regarding the status of her loan, Carlson said she would have found a way to reverse the default by making a payment, thereby avoiding a lawsuit. Absent those communications, Carlson said she's determined to keep fighting for the relief she believed she was granted.

"No one teaches you how to do this," Carlson said, "unless you come from a family that works for these companies and knows how the system works."

After Carlson was sued, she began using Gemini, Google's AI tool, to help prepare her legal responses. She also wrote a script of what she might say in court. In addition to filing her responses online, she hand-delivers everything to her local superior court and documents each delivery, keeping evidence of every filing in case something goes wrong.

After rejecting SoFi's offers to settle, she is now awaiting a jury trial. Outcomes in these cases vary, said Richard Gaudreau, a New Hampshire lawyer who litigates private student-loan cases. Some borrowers agree to a settlement, while others negotiate an affordable repayment plan. He's also gotten cases dismissed when he was able to prove to the judge that the lender did not retain proper documentation showing loan ownership.

"You're just looking for leverage," Gaudreau said. He expects more borrowers will face these challenges after President Donald Trump's sweeping federal student-loan repayment changes push them into private lending. "The problem's going to get bigger," he said.

While it's taking a significant mental toll, Carlson said she owes it to herself and her family to pursue the case.

"It's just this mental weight on my shoulders," Carlson said. "There have been so many times I wish I could just let this go and walk away. But this is one fight that I'm not giving up on."

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