Identity theft comes in many forms; student loan identity theft is one of them.
Student loan identity theft is a real and serious threat, especially as college-bound individuals prepare for the new school year. Statistics show that nearly 100 million Americans are at risk of identity theft each year because their personal identifying information is compromised. It is also likely that many of those people are among the 40 million Americans paying back at least one student loan. Each year the numbers grow, placing even more people in the cross hairs of criminals.
It can be easy to overlook how identity theft impacts student borrowers since it is most commonly associated with credit and debit cards. The objective is to be alert to the signs of identity theft and be ready to take action when it happens.
How Student Loan Fraud Happens
Student loan fraud most often involves a ringleader and several accomplices posing as “students.” Using stolen personal information, accomplices enroll in classes at a college or university and apply for financial aid.
With online enrollment and distance learning options, thieves never have to set foot in a registrar’s office or classroom. The U.S. Free Application for Federal Student Aid (FAFSA) system is particularly vulnerable to fraud because financial aid does not require a credit check.
Once financial aid is approved, the school receives the money, and subtracts out tuition and fees. Thieves target schools that charge low tuition, such as community colleges and online universities, because more money is left over to steal. After cashing out, they drop their classes, leaving victims on the hook for repayment.
All About Robocall Scams
Seven out of ten college graduates are in debt from their education. For scammers, this is an opportunity. These fraudsters commonly promise student debt forgiveness and lower payments. They often demand upfront fees up to thousands of dollars for this “service,” which is illegal. So far, these charges have cost student loan borrowers more than $95 million, according to the Federal Trade Commission. Never take up an offer that seems to good to be true. There are certified services to help with student loans, and none of them will send a robocall for your business.
What To Do If You’re a Victim
If an identity thief has obtained a student loan in your name, report it in writing to the school that opened the loan. Request that the account be closed. Also report it to the U.S. Dept. of Education Inspector General’s hotline.
Tips To Keep Yourself Safe
- Be sure to check your bank and credit card statements carefully.
- Be suspicious if you do not receive mail or bills that do not arrive as expected.
- Denials of credit for no reason.
- Review your credit bureau report(s) at least once a year. You are able to get a free credit report once a year per federal law.
You’ll be an easy target if you don’t keep all your sensitive documents secure, especially documents that have your social security number listed on them such as your student loans.
Keep yourself safe, and remember, when it’s time to dispose of old documents, don’t toss them, shred them.
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