'Did I buy a building?!' Mistake causes Sheboygan man's student loan debt to balloon to $3.9M

SHEBOYGAN (WITI) — How does a college loan worth a few thousand dollars suddenly skyrocket to a few million? It happened to one UW-Milwaukee graduate. When he wasn't getting answers, he turned to FOX6's Contact 6 for help.

It was a student loan shocker for the Sheboygan substitute teacher Robert Theis.

"I almost had a heart attack," Theis said. "I was like, 'Whoa, what's going on?'"

Theis owed about $3,000 to a Federal Perkins Loan.

"It was like something, crazy," Theis said.

The 10 US states with the most debt
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The 10 US states with the most debt

1. California

California has the highest debt-to-income ratio in the country. Residents of the Golden State make about $28,000 annually on average, according to U.S. Census Bureau data. The New York Federal Reserve Bank shows that Californians have a per resident debt balance of $65,740. This gives Californians a debt-to-income ratio of 2.34 on average. Like many other states, most of Californians’ debt is held up in their mortgages. Californians owe about $51,190 on their mortgages on a per capita basis. 

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2. Hawaii

Hawaii comes in second with a debt-to-income ratio of 2.1. On average Hawaiians make slightly more than Golden State residents. The median income in Hawaii is $31,905 as compared to $28,068 in California. Residents of Hawaii also have slightly more debt per capita than those in California: $67,010 to $65,740. Hawaiians have the second-highest proportion of debt tied up in mortgage. In total, $51,770 out of the total $67,010 in per capita debt that Hawaiians hold is owed on mortgages. That means 77% of per capita debt is mortgage debt. 

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3. Virginia

Virginia comes in third with a debt-to-income ratio just below 2. The average Virginian makes about $31,557 and has $62,520 in debt. One reason why lenders may feel safe lending to Virginians, allowing them to have a high debt-to-income ratio, is their low delinquency rates. Only 1.27% of mortgage debt in Virginia is delinquent by at least 90 days. That is the 13th-lowest rate in the country. Virginia also has a relatively high proportion of its debt in student loans (7.76%).

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4. Colorado

Of Colorado’s total debt, 6.85% is tied up in automobile debt. That’s the second-highest rate in the top 10. However it is quite a bit lower than the national average of 9.57%. Overall there is not much separating Colorado from Virginia: Colorado has a debt-to-income ratio of 1.96. The median income in Colorado is $31,664 and the per capita debt is $62,200.

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5. Utah

Like the rest of the top 10, Utah residents have the vast majority of their debt tied up in mortgages. Utah residents have $52,150 in per capita debt, $38,240 of which is mortgage debt. The state also has one of the lowest delinquency rates for mortgage debt. Only 1.05% of mortgage debt is 90 days past due in Utah. Again this may partially explain why lenders are so willing to lend to Utahans looking for mortgages. 

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6. Washington, D.C.

Almost 15% of all debt held in the nation’s capital is owed on student loan debt. All that higher education may be paying off though. D.C. has the highest median income in the country and over half of the population over the age of 25 has at least a bachelor’s degree. In fact, there are more people over the age of 25 in D.C. with a graduate degree (32.3%) than there are with only a bachelor’s degree (23.8%). The capital also has the lowest percent of debt in the country tied up in auto loans (3.35%), probably due to the accessible public transportation available in the area. 

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7. Oregon

Oregon has a debt-to-income ratio of 1.89. On average Oregonians make less than many other states in the top 10. The median income in the Beaver State is $26,188, according the U.S. Census Bureau. Oregon also has the least per capita debt in the top 10, at $49,550 per resident. For the most part Oregonians choose to go into debt to buy homes. Over 72% of overall debt is held in mortgages. One area where Oregonians struggle is in paying off credit card debt. Just over 7% of all credit card debt in the state is delinquent. One way to eliminate credit card debt is using a balance transfer credit card. With a balance transfer credit card, new users typically have a limited time to make no-interest payments. 

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8. Washington

Washington, Oregon’s northwest neighbor, comes in eighth for highest debt-to-income ratio. The state has the third-lowest percent of debt tied up in student loans (6.29%) but the third-highest percent of debt tied up in mortgages (75.35%). Washingtonians also tend to be some of the most responsible holders of debt in the country. They rank above average in delinquency rates on all types of debt and rank in the top 10 for lowest rates of auto loan delinquency and credit card delinquency. 

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9. Massachusetts

On average Massachusetts residents earn about $32,352 per year and have about $59,820 in debt per capita. That works out to a debt-to-income ratio of 1.84. Once again, like other states, the majority of that debt is mortgage debt. About 72% of per capita debt in the Bay State is mortgage debt. The state’s residents don’t take on as much credit card debt as other states do. About 5.45% of per capita is tied up in credit card debt

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10. Maryland

The Old Line State rounds out our top 10 states with the highest debt-to-income ratios. Maryland residents are some of the most well-off in the country, with an average individual income of $36,316. In terms of debt, Maryland residents have $67,020 in per capita debt, meaning their debt-to-income ratio is 1.84.

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Like most colleges, UWM outsources its collections to a third-party. In this case, it was to Heartland ECSI.

When Theis checked his balance, the amount owed had suddenly ballooned to nearly $4 million.

"People were like, 'You don't even go to MIT for that kind of education. How do you accrue such a debt?'" Theis recalled.

Theis says when he called UWM he was told he missed one payment five years ago. However, he couldn't imagine that would cause his loan to go up by such an obscene amount.

"Did I buy a building? Who goes to school for that kind of money?" Theis said.

Contact 6 reached out to Heartland ECSI, UWM and the U.S. Department of Education. All three looked into the issue and confirmed a mistake had been made.

"The loan amount the student saw was actually not even possible," explained Tim Opgenorth, the UWM Director of Financial Aid.

Opgenorth says his office reached out to Heartland ECSI on Theis' behalf.

"Heartland gave us the assurance that it was a one-time glitch in the system, that it was fixed immediately," Opgenorth said.

But, there were still more surprises in store for Theis. It turns out the amount listed in error as Theis' money owed wasn't some random number.

"The amount, in fact, wasn't the amount owed. It was my social security number," Theis said.

This left Theis concerned about who had access to it. Heartland ECSI told Theis he was the only person with access to his information and his social security number only appeared on the online page. Theis was told the incorrect amount was not reported to the credit bureau.

"If he feels in any way that his credit has been damaged or compromised, they are willing to work with him," Opgenorth said.

In addition, Heartland ECSI told Contact 6 in a statement that while it "does not discuss individual borrower accounts with the media…There has been no unauthorized access to or acquisition of date from the ECSI systems."

From this moment on, Theis vows he'll be monitoring all his loans and credit reports closely.

"I guess I won't wait for a creditor to tell me, 'Hey, there's a problem,'" Theis said.

Theis believes this mistake did have a negative impact on his credit score, but since Contact 6 last spoke with him he says his score has been improving.

If you suspect a mistake has been made on a student loan, you should contact your campus' financial aid office or it's bursars and student accounts office. Your college probably doesn't manage your loan accounts, but it will act as a mediator dealing with the third-party vendor that does.

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