Massive ID Theft affects 3.3M Student Loan Borrowers

The names, addresses, and Social Security numbers of 3.3 million people were stolen in what is believed to be the largest-ever breach of personal information amongst university students. The issue could affect as many as 5% of all federal student-loan borrowers.

According to Educational Credit Management Corp. (ECMC), a non-profit guarantor of federal student loans, during the weekend of March 20-21 the personal details of 3.3 millions borrowers were stolen from their St. Paul, Minn. headquarters.

The theft did not involve hackers. ECMC spokesman Paul Kelash told the Wall Street Journal that the stolen information was on a portable media device that was taken.

Affected Customers to be Notified This Week

The ECMC only released limited information about the theft since it posted a notice on its web site Friday. Affected customers will be notified in writing this week.

ECMC does not believe the data theft was connected with last week's enactment of the largest overhaul of federal student-loan rules in decades. ECMC is still evaluating how the new legislation would affect it and details are still being worked out as to how the new law will be implemented.

The ECMC data theft is the latest in a series of thefts of consumers' financial data. Earlier this month, a former employee of HSBC Holdings PLC allegedly stole data associated with about 24,000 Swiss private-bank accounts.

Forty million accounts serviced by payment processor CardSystems were compromised in 2005 and TJX Co., the owners of T.J. Maxx revealed that 45 million credit- and debit-card account numbers were breached in 2007. (Source: wsj.com)

More Than 347 Million Records Compromised

According to the Privacy Rights Clearinghouse, more than 347 million records containing sensitive personal information have been compromised since 2005.

The student-loan market is no stranger to data breaches. In 2006, 1.7 million computer records held by Texas Guaranteed Student Loan Corp. were breached, while a bug in the U.S. Department of Education's Web site compromised the data of 21,000 people.

An estimated 320 employees work at ECMC's St. Paul headquarters, which has key-card access. The company is currently reviewing its security.

U.S. Dept of Education to Help Protect Data

More than $11 billion in student loans are insured by ECMC services for the U.S. Department of Education. ECMC also owns Premiere Credit LLC, a federal student-loan collection agency, but no Premiere accounts were affected by the theft.

ECMC, USA Funds and American Student Assistance all have contracts with the federal government to insure student loans against default. ECMC guarantees loans in Oregon, Virginia and Connecticut, but borrowers from all states could be affected.

8.9 million loans are represented by the 3.3 million Social Security numbers that were stolen from ECMC. The U.S. Department of Education is working with ECMC to make sure affected individuals have the resources to protect their information and to provide them with identity-theft insurance. (Source: wsj.com)

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