Sunday, February 5, 2023

FAFSA Security Breach Leads to Data Stolen From 100,000 Students, $30M in Fraudulent Tax Returns

FAFSA Security Breach Leads to Data Stolen From 100,000 Students, $30M in Fraudulent Tax Returns

If you’ve recently filled out an application for financial aid through the Free Application for Federal Student Aid (FAFSA), you may be one of the 100,000 people who have had their personal data compromised by an IRS security breach.

Also read: How to Protect your Privacy Under the Trump Administration

FAFSA Breach Led to $30M Worth of Fraudulent Tax Returns

According to The Chronicle of Higher Education, a data breach compromised an online tool provided by the IRS that makes it easier for students to fill out their FAFSA forms. IRS commissioner John Koskinen revealed this information to the public on Thursday, April 6 when he testified at a Senate Finance Committee hearing.

The IRS suspended this tool in early March, when it suspected that it may become a target for hackers. This tool should come back online in October, The Chronicle reports.

The tool’s removal raised alarm among students and their families, with various reports noting that it had gone offline without prior notice from the IRS or the Department of Education. Addressing these concerns, The Chronicle reports, the two agencies notified the public that the tool would stay offline “for several weeks,” but that it would not affect students’ abilities to apply for financial aid.

Koskinen informed the Senate Finance Committee that before the IRS took the tool offline, approximately 8,000 fraudulent tax returns had been filed using data stolen from the tool, with a total of US $30 million issued in tax refunds as a result.

According to Koskinen’s testimony, the IRS has sent out 35,000 letters to people affected by the breach.

The Department of Education and FAFSA: The American Debt Machine

American college students rely heavily on government spending for their educations. According to the National Center for Education Statistics, the Department of Education spent $33,673 million in 2010 on postsecondary institutions alone.

Furthermore, combine that with the average 2016 college graduate’s debt burden of $37,172, and it becomes clear how much students rely on FAFSA to get their degrees.

That kind of money makes students and their financial aid programs big targets for scammers and hackers. Each year, new college graduates fall victim to student loan scams, resulting in a worsened situation for graduates just looking for a way to alleviate their debt burdens.

Because of this growing predatory debt culture in America, activists and politicians have called for massive financial reform targeting student loans.

Now, as evidenced by the FAFSA breach, not even the US government itself is safe, becoming a target for tax fraudsters looking to get free money.

What should the US government do to avoid falling victim to attacks like these? Let us know your thoughts down below.

Image via Pixabay

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