She didn’t find out about the bill till she tried to refinance. I would bet she never even got a notice for collection.
Unfortunately, that can happen for people who don’t regularly check their credit reports. People can do this, ABSOLUTELY FREE, at www.annualcreditreport.com. And, because there are three different credit bureaus, a person can actually request a free credit report every four months. Vigilance is the key to avoid being suprised by these sorts of things.