• Tuesday, November 24, 2009
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Private Lenders May Be Mining Student Data From Federal Database

College financial-aid administrators and officials of the U.S. Department of Education suspect that some student-loan companies are misusing a federal database to gain information about students for marketing purposes, The Washington Post reported.

The database, known as the National Student Loan Data System, contains information on about 60 million student records and is covered by federal privacy laws. That information includes Social Security numbers, e-mail addresses, phone numbers, and loan balances. About 29,000 university financial-aid administrators and 7,500 loan-company employees have access to the database, the Post reported.

Department officials apparently have been taking steps to control misuse of the database for several years, and had expressed concerns before the recent revelations about the relationships between some lenders and college aid administrators. Theresa S. Shaw, chief operating officer of the department’s Office of Federal Student Aid, discussed the problem with university officials during a meeting in February, according to people who attended.

Some university aid administrators suspect loan companies are using the information to identify and market their services to students in the federal direct-loan program. —Charles Huckabee