CrochetStache your situation is what is called an outlier. I am not saying you are a villain, just that using your situation to justify something is probably not the most financially beneficial.
If you would have said that if your loan services is through Mohela, you live over seas, you are hearing impaired, and don't check your bank account on a monthly basis then it would be best to pay off your loan immediately then I would have no problem with your recommendation.
Credit scores are meant to determine the likelyhood of getting paid on time, with little hassle and little costs to the financial institution. Your situation does not fit this definition. Of course, some fault lies with them, but you also failed to notice that the payments were not coming out of your account because of their fault. I have had banks fail to pull money out of my account. I called them up within 2 weeks and had the situation corrected with their assurances that it would not impact my credit. I took down their name, direct number, and other pertinent information. It has never been a problem. Flawless credit history. I have had friends where something like this has happened and they saw it as a windfall until the notices came in and then they spent hours, day, weeks, months trying to fight the system and restore their credit. The moral of the story is monitor your assets and your liabilities on a monthly basis. People using Mint or other services will not have this issue as it will be caught before the account becomes delinquent. Fortunately, it sounds like you won't have to wait 7 years of bad credit as the ombudsman will help get this removed.
Again your story is an outlier and I am sure has cost the financial institutions thousands of dollars to resolve. It was their fault for not pulling the money out, your fault for not noticing and following up, and it will get resolved. I am sorry you had to go through this. If you google any financial institution you will see stories like this, which is a good lesson to monitor your debt on a monthly basis.