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Thursday, October 4, 2012

On Safeguarding Your Student Aid PIN

By ANN CARRNS

Loanlook, a Web site that aims to help students and families manage their educational loans, has added access to private student loans, as well as federal loans. That should, in theory, make the site more attractive to students and parents looking for a way to keep track of all of their student loans in one place.

But it appears the site may be operating counter to guidelines from the Department of Education's Office of Federal Student Aid, which warn student borrowers to safeguard their financial aid PINs and refrain from sharing them with anyone. That may be another reason for users to be wary of the site, which already faces skepticism because its parent company, the Ceannate Corporation, also is in the business of student loan debt collection.

As Bucks reported in August, Loanlook asks users to provide their four-digit federal PINs, which are assigned by the student aid office so students can gain access to information in the National Student Loan Data System. The PIN allows Loanlook to obtain information like loan totals and terms on behalf of the borrower so it can help suggest optimal repayment plans.

According to the Federal Student Aid PIN Web site, the PIN is used in combination with a birth date and Social Security number to allow access to federal student aid records online and to complete the Free Application for Federal Student Aid, or Fafsa, form.

“Your PIN can be used each year to electronically apply for federal student aid and to access your federal student aid records online,” the site says. “If you receive a PIN, you agree not to share it with anyone. Your PIN serves as your electronic signature and provides access to your personal records, so you should never give your PIN to anyone, including commercial services that offer to help you complete your Fafsa,” the student aid application. “Be sure to keep your PIN in a safe place.”

Given that warning, some readers, including a former student aid counselor, questioned whether it was acceptable for students to use their PINs to get access to loan information through Loanlook.

So I tried to ask the Department of Education this question: If I'm a student borrower who wants to use Loanlook's services, is it O.K. for me to enter my PIN on the site? I contacted the department's press office several times. Finally, after mulling the inquiry for more than five weeks, the office said it would not comment on Loanlook specifically - even though the site's parent, Ceannate, is a contractor with the department, providing services like student loan collections. But it e-mailed this response on Wednesday from Daren Briscoe, the department's deputy press secretary:

“As guidance posted for borrowers on the department's Web site advises - you should never give your PIN to anyone, including commercial services.”

Not exactly a ringing endorsement.

Loanlook officials maintain that the site complies with federal guidelines. Some students have access to Loanlook through their colleges and don't need to use their PINs. Students who come to the site individually do provide their PINs, but the site does not store them, to help guard against potential misuse, said Loanlook's chief executive, Balaji Rajan. Students must re-enter their PINs each time they want to update their loan information.

“Loanlook only uses the PIN as a one-time event to confirm the identity of the borrower and the borrower's right to access loan data,” he wrote in an e-mail. He added, “It is important to note that the PIN is provided only to facilitate Loanlook's services (as an agent and representative of the borrower) to access loan data, and for no other purpose.”

Further, he said, when registering on Loanlook, users give approval on a Department of Education disclosure form that allows release of their informa tion.

Still, Loanlook posted an update on its blog last week stating that the Department of Education now offers a feature, called “MyStudentData Download,” that provides an alternative to using the PIN. The feature provides a text version of a student's loan information that can be downloaded from the National Student Loan Data System site, and then transferred to third-party sites, like Loanlook. That sounds cumbersome, though it does get around the PIN problem.

“We expect that most of you will continue to retrieve your student loan data with your NSLDS PIN (generally the quickest way to refresh loan profiles on loanlook.com),” the Loanlook post said. “But you will soon have the option to upload the text file provided by NSLDS to your Loanlook account as well.”

What do you think? Would you feel comfortable using your financial aid PIN to use loan management sites like Loanlook? Or would you take the time to download your files?