[caption id=”attachment_118792″ align=”aligncenter” width=”1200″] (AP Photo/Jon Elswick)
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Your identity may have been used to fraudulently take out hundreds of thousands in student loans and you wouldn’t even know it.
A new U.S. Department of Education Office of Inspector General report shared frightening findings about the growing prevalence of fraudsters applying for student loan funding using stolen identities.
About $187 million in student loans and aid have been stolen since 2009, according to a Watchdog.org analysis of the report.
People steal identities and work together in groups to secure the most money possible, often creating “fraud rings,” according to the report.
In a “fraud ring,” the leader fills out the Free Application for Federal Student Aid (FAFSA) with the stolen identity and uses other ring members to attend classes for the minimum amount of time, before dropping out and keeping the unused funds.
Watchdog.org found that at least 5 million people have had their identity stolen to be possibly used in this way.
This kind of information is more readily available because the private companies that the Federal Student Loan Administration contracts to collect debts and administer some aspects of student loan programs have a lot of security flaws, the IG reported.
It’s also hard to track because Pell Grants don’t show up on credit reports and unless you are filling out your own FAFSA report, there is no other way to know if someone has claimed federal education funds in your name, Haywood Talcove, chief executive officer of LexisNexis Special Services, told Watchdog.org.
All of these factors, plus the lack of major oversight, combined have made the federal student loan business the perfect target for these identity thieves and students their perfect and unwitting victims.
