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Is Your Student Loan Lender Careful With Your Personal Data?

Oct 21, 2011 Jennifer Williamson, Distance Education.org Columnist | 0 Comments

Student lenders collect a lot of important data on their customers. If this data fell into the wrong hands, it could wreak havoc in your life—and some banks are more careful than others. It’s essential to keep an eye on your bank’s practices regarding your data—and make sure they’re protecting it. If you’re still in the process of choosing a private lender, be aware of how they treat your data and that of other customers—and be wary of those that are less careful. Here are a few ways you can judge how careful your bank is with its customers’ personal information.

What’s their privacy policy?

Your student loan lender should have a privacy policy that’s easy to access on their website and other materials. If you have a co-signer, chances are you’ll be allowed to see that person’s application information and vice versa; and they may be required to disclose certain information in order to comply with federal and state law. However, they should not be sharing your information with marketers, advertisers, sponsors or affiliates for profit.

Is the data on their site encrypted?

Confedential Stamp

Most banks are at least fairly conscientious with their customers’ personal information. However, it’s important to be vigilant—and be sure your bank is being as careful as you need them to be.

 

If you’re applying for your loan online, they’d better be protecting your privacy. Check to make sure there’s a yellow padlock icon somewhere in the screen, usually on the bottom right-hand side or in the address bar. Also, see if the URL address begins with “https.” This is an indication that your data will be encrypted when entered in the online form. If you see only “http,” your data may not be protected.

Are there any horror stories?
If there are, they shouldn’t be hard to find. Do a quick search on Google with the lender’s name along with the words “scam,” “data theft,” “security breach,” et cetera. It’s possible the company has had problems with customer data security in the past, and if they have, customers will probably have talked about it. A two-second Google search could save you a lot of grief in the future.

How do you access your customer account?

Your online account should be password-protected, and you should be able to change your password once you’ve established the account. In addition, it’s a good sign if your lender offers several layers of security checks. Asking you to answer a personalized security question, sending a verification text to your cell phone, and requiring you to verify your identity if accessing the account from an unexpected region are all good signs that they’re protecting your data.

Do they send you mailings?

Many lenders send mailings to their customers. Identity thieves can access your personal information by intercepting such mailings or going through your trash once you throw them out. How much personal information does your lender include in its mailings? Does it mail your information in an envelope with the company logo, or is the envelope plain and unmarked?

Most banks are at least fairly conscientious with their customers’ personal information. However, it’s important to be vigilant—and be sure your bank is being as careful as you need them to be. If they regularly send you mailings that could compromise your security, ask to be taken off their mailing list—most banks will also send key personal information via email. Be sure their site is encrypted and their online accounts are secure—and pick a strong password to protect your account. Check their privacy policy and make sure they don’t leave any wiggle room to share your information with inappropriate third parties. The more careful you are about the banks you choose to do business with, the less likely you’ll have to deal with breaches in security.

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