Kathy L. Hardy, her two daughters and two other associates are being charged for having allegedly taken out numerous fraudulent private student loans since 2005. The five women were accused of having received a combined sum of more than $690,000 by filling out over 70 student loan applications, reported U.S. News.
Though many of the loan applications were denied, a number of lenders, including Sallie Mae, the biggest student lender in the business, lent tens of thousands to the applicants. By using stolen Social Security numbers and the information of victims whose names resembled their own, the five women were able to slip by lender verifications.
The FBI's investigation into the matter began when one of the victims complained that someone had taken out a loan under her name. Upon further investigation, it was found that the women alleged to have been at fault had stolen numerous identities—including one that belong to a deceased person—to collect money.
The case raised concerns that the stealing of identities to obtain private student loans may be too simple. Because private student loans are easier to obtain than Federal Stafford and Perkins Loans, and because private student loans are not sent directly to colleges and universities, the potential for fraud may be considerable.
To minimize the chance that similar problems will arise in the future, a congressional provision that would force student lenders to forward loans directly to schools is being considered. The suggestion has received mixed reviews from lenders who, one hand, would like to eliminate the possibility of fraud, and, on the other, want to facilitate the borrowing process for potential customers.
College is expensive, Scholarships.com is completely free. Pay for your college education with as much free college scholarship money as possible. By applying to all the awards you qualify for, you can be sure to not miss a single opportunity in paying for your college expenses - including tuition, fees, room and board. Get matched to college scholarships instantly and start applying today by conducting a free college scholarship search at Scholarships.com.