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Data Breach Puts 3.3 Million Student-Loan Borrowers At Risk

A company that guarantees federal student loans said Friday that personal data on about 3.3 million people nationwide has been stolen from its headquarters in Minnesota.

Educational Credit Management Corporation (ECMC), a student-loan guarantee agency in Minnesota, acknowledged on Friday that a data breach in which the personal information of 3.3 million borrowers, including their Social Security numbers, was compromised. The theft involved burglars who apparently broke in and walked away with an electronic storage device containing the personal data of borrowers. The theft was discovered by the company this past Sunday.

Company spokesman Paul Kelash wouldn't specify what was taken, citing the ongoing investigation, but said there were no indications of any misuse of the data. ECMC told reporters that it discovered the theft last Sunday and immediately contacted law enforcement, and made the theft public when it received permission from authorities. The Minnesota Bureau of Criminal Apprehension is leading the investigation.

The company stated that the stolen data included names, addresses, Social Security numbers and dates of birth of borrowers, but no financial or bank account information. A written statement by the company indicated that student loan borrowers affected by the theft would be notified and given free credit protection and monitoring services. "We deeply regret that this incident occurred and the stress it has caused our borrowers," ECMC's president and chief executive, Richard J. Boyle, said in a statement released to the media.

ECMC's admission of the data theft came one day after Congress voted to shut down the bank-based system of student lending in favor of direct lending by the Education Department, partly due to the cost and complexity of the bank-based system, as well as its potential for identity fraud.

Published Mar 28 2010, 05:37 AM by IdentityTheft
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