ReclaimMyID

Let’s face it, college is expensive. The College Board reports that in 2017-2018, the average cost of tuition and fees at private colleges was $34,740, $9,970 for in-state public colleges, and out-of-state public school attendees averaged $25,620. This is per year (and doesn’t include room and board, books, etc.). Needless to say, most students require at least some financial aid. 70% of students, to be exact. Wouldn’t it be life-changing if your child found out they were unable to obtain student loans because someone had already damaged their credit? It happens all the time, unfortunately. Here are some tips on how to avoid student loan fraud and steps to take should you discover it has already occurred.

What Is Student Loan Fraud?

Specifically, student loan fraud is when someone steals another person’s information and fraudulently applies for and receives student loans. These loans will show up on the credit reports for the individual whos identity was stolen. If this has already happened to a student who is applying for financial aid, the outstanding (and most likely delinquent) loans will show on their credit report (thus preventing them from obtaining aid).

A potential student borrower doesn’t have to have been affected by student loan fraud specifically to have their ability to obtain financial aid impacted. Thieves who apply for credit, standard loans or anything that can show on a credit report will prevent the affected student from being approved for aid.

Tips For Preventing Fraud

Fortunately, there are precautions you can take to prevent, or at least lessen the impact from, identity theft for potential students:

Request a credit report for the student from one of the major credit bureaus. Carefully check the report for any fraudulent activity (the report will most likely be very short). In fact, the student may not even have a credit report yet (this is a good thing as it means they most likely have clean credit).
When applying for student loans, be very careful with any e-mail regarding student loans, FAFSA or anything related. There are many current scams which offer to find aid or fill out FAFSA forms for you. Do not open any attachments or respond to any e-mails unless you are fully aware of who the sender is.
Place a credit report on the student’s credit file to prevent anyone from opening credit using their information. You will also be notified when any attempts to obtain credit are made.

What To Do If Fraud Has Already Occurred

Should you find that the student’s credit report has fraudulent activity, follow these steps:

If there were student loans applied for on the student’s account, contact the school the fraudulent loans were opened through and notify them. Also, file a report with the Department of Education. The affected student may be eligible to have these loans removed through a false certification discharge.
If a student loan application was denied, contact the school the loans were applied through.
If subscribed to an identity theft restoration service, such as ReclaimMyID, contact them immediately. They will get right to work in recovering your identity and the faster they learn of the fraudulent activity the better.

College is an important step in determining the future. No potential student who wishes to further their education should be denied the chance due to student loan fraud. Learning how to avoid student loan fraud will serve you and any potential student well when the time comes to apply for financial aid.