Yeah the story doesn't check out.
Please refer to the FAQ from the university i was studying at. #10 to be exact https://sbs.fullerton.edu/about/FAQs.php I was late to pay the tuiton, only because the bank account was suddenly frozen, on a long weekend.
This is the program i was talking about, you can review the eligibility, which states that the student must be currently enrolled. https://www.fullerton.edu/basic-needs/
To me that says "talk to us before the deadline if you've got problems paying". What did they say when you said your bank was having problems?
Basically this happened at the worst possible time and by then the university had had enough of them not paying the bill and not following required policies.
Yeah, I am not believing this story at all.
No University is going to disown you if you are late 1 week. The rest of the story is just as weak.