The personal financial details of as many as 5,000 college students were temporarily laid bare for other students to view on the Education Department's direct loan website earlier this month, an education official testified Tuesday.
The students' information was available during a six or seven minute window as officials were making a reconfiguration involving 11.5 million borrowers, said James Runcie, the Education Department's federal student aid chief operating officer. The change was designed to improve the website's performance times.
Runcie said students who logged on during the trouble period saw the personal details of other students.
Those whose information was exposed have been notified and offered credit monitoring services, Runcie said. The department shut down the website while the problem was resolved. "We responded as quickly as we could," he said.
Runcie's testimony came before a House Education and the Workforce subcommittee, which has been reviewing the Education Department's transition to directly issuing all student loans.
Rep. Virginia Foxx, R-N.C., the subcommittee chairwoman, said the transition has meant more customer service problems and mistakes, including the recent security problem with the website.
"The implications of this kind of website malfunction are severe, particularly when it affects millions of borrows nationwide," Foxx said.
In a statement released after the hearing, Justin Hamilton, an Education Department spokesman, said the problem occurred on Oct. 12 and the department has no reason to believe students' information was misused or accessed by anyone with "malicious intent."
Congress changed the way student loans are issued last year as part of the law overhauling the nation's health care system. It essentially stripped banks of their role as middlemen in issuing the loans. All loans are now directly issued by the government. The expectation at the time was that the measure would result in $61 billion in savings over a decade. The billions saved are to pay for Pell Grants, provide resources to community and historically black colleges, help reduce the deficit and offset expenses from the health care legislation.
Runcie said the department uses rigorous security standards but is looking to soon roll out an additional safeguard. He also said the department appreciates suggestions on ways to make its website more user friendly, and plans to make changes.
Overall, Runcie said the transition to the direct loan program has been a success.
Online: Student loan website: http://myedaccount.com
Kimberly Hefling can be followed at http://twitter.com/khefling
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