The visa exempt stamp (the thing you thought was a visa on arrival) means you show up, they say welcome for 30 days, and pay nothing. You can extend it an additional 30 days for 1900thb in the Kingdom, but no matter what you will have to get a proper visa outside the country if you want to stay longer.
I didn't know about the cancel the ED visa letter from the school, and just left, got another visa type just fine at the consulate. Then when I went to EXTEND that new different visa, they had me run to the school to get the letter before she would give me the extension.
Make certain the "House Master" as they call it here does in fact file the TM30 within 24 hours. They are heavily enforcing that now. Nearly every person trying to extend a visa at Chiang Mai Immigration this week was fined 1600THB before they could get an extension of any kind. They had to show the receipt of the TM30 stamped by immigration or pay the fine.
What is the traveler's country of origin? This rule changed in Nov 2013 and has been 30 days by land crossing for G7 countries since then. They added some recently.