U.S. Limits Access to Student Loan Database

[cal04]

Source: JONATHAN D. GLATER

The Education Department last night cut off outside access to a government database that contains the personal financial information of millions of student aid applicants.

The department acted on concerns that loan companies or other marketers were improperly obtaining private information on potential borrowers.

The shutdown, announced by Education Secretary Margaret Spellings, is its strongest response to a broadening student loan scandal that has already implicated loan companies and caused several universities to put their financial aid administrators on leave and review their dealings with lenders.

In a six-page letter to Senator Edward M. Kennedy, chairman of the education committee, Ms. Spellings offered a staunch defense of the department’s practices and its oversight of the student loan industry.



Read more: http://www.nytimes.com/2007/04/18/us/18loans.html?_r=1&hp&oref=slogin

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Representative George Miller, Democrat of California and chairman of the House education committee, said last night, “I am pleased that the secretary has belatedly taken some steps to address these fundamental privacy issues. However, it is long past time for the department to step up to the plate and vigorously investigate both the extent of lenders’ misuse of the student loan database and the exploitation for profit of federal programs” for student aid.

[Justice]

1. Violation of Family Educational Rights and Privacy Act (FERPA)?

Family Educational Rights and Privacy Act (FERPA)

This law, commonly referred to as the Buckley Amendment, (1) provides that students will have access to inspect and review their educational records upon written request with identity verification and (2) protects the rights of a student to privacy by limiting access to the educational record without express written consent.

How is it that this law was not violated?

In addition, many states have a state law protecting privacy of students.

[Alcibiades]

2. I have lots of student loan debt

from my 13 years of postsecondary education. I am absolutely hounded, hounded, by these vultures, all calling to "inform me of my federal rights" and wanting the last 4 of my SSN so they can sign me up for their loan consolidation. I have to tell them that the fed raised rates 16 times sicne I consolidated, I don't care how good their program is, they will not be saving me any money today.

Funny thing is that they all have Indian accents, but have American sounding names. One fellow called me claiming his name was "Denzel" something or other. I wanted to explain to him that he had a bad fake name, that there's only one Denzel, but I thought better of it.

Anyway, stay off the mailing list for student loan consolidation. For god's sake, don't let any of them get your phone number. There are about 10,000 companies that do this now, and they all want to call during the baby's naptime.

[CookCountyResident]

4. It's a form of abuse for these companies

to call, send avalanches of mail, etc. I ended up unplugging my phone at times.

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3. U.S. shuts student database to lenders amid concerns

Following reports of abuse, the U.S. government on Tuesday temporarily barred college loan firms from accessing a database containing confidential personal information on millions of student borrowers.

The Department of Education said in a statement that the suspension of access was effective immediately and applied to "lenders, loan holders, servicers and guaranty agencies." The suspension was effective

During the suspension, the department "will conduct a review of the specific uses of (the database) by these entities to determine if there has been unauthorized usage," said Secretary of Education
Margaret Spellings in a letter to Sen. Edward Kennedy (news, bio, voting record), a Massachusetts Democrat, who requested the suspension.


http://news.yahoo.com/s/nm/20070418/pl_nm/studentloans_database_dc