A student may not need a loan until they attend college. Therefore, a student signs up for a loan through the Federal Government or a private bank. Unfortunately, he or she learns that there is an existing loan in their name. Then the student finds out they are an identity theft victim.
Identity theft in education affects all sectors including the government, banks for private loans and the consumer. The damage is substantial, because now the victim has bad credit, the loan was not used for its intended purpose and everyone risks losing out. If a student wants a private loan and the credit prevents that, the bank does not get the expected amount of money and neither does the educational institution. As a result, the student has to work multiple jobs to attend college and it takes longer.
Not only did the fraudster assume the identity of the student, they most likely did not spend the money on education, which affects the economy. It is crucial for the government, educational institutions and banks to protect personally identifying information. Knowledge-based authentication is an example of how to improve an identity theft issue. In doing this, the problems can be prevented by asking questions only the person would know.
For students who have already been affected or want to be proactive, credit monitoring is a consumer solution. Although that is the consumer’s responsibility, the private and public entities have a responsibility to safeguard their processes.