I want to make donations to people with student loan debt. The method by which these people are chosen does not enable me to get to know each person on a personal level.

How do I verify someone's student loan debt?

I'm trying to find a simple way to verify that someone has student loan debt and how much student loan debt they have. Ideally the method wouldn't require great effort, expense, or a dangerous amount of information to be given out.

closed as off-topic by Pete B., JTP - Apologise to Monica Sep 17 at 21:59

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    Can they send you a picture of their statement? I feel like this is a phishing attempt. – Pete B. Sep 17 at 19:08
  • @PeteB. It's not a phishing attempt? I wish I had some way to prove that. Perhaps I could ease your concern by telling you that it's for a community of donators, not specifically me. I've also specifically noted that I would like the amount of information to not be dangerous. – RylonMcnz Sep 17 at 19:18
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    @PeteB. Could a statement not easily be fabricated? – RylonMcnz Sep 17 at 19:19
  • Any data you receive directly from the consumer can be fabricated. The incentive for people to lie to get money from your charity will be an obstacle to using any consumer-provided data to do this verification. – dwizum Sep 17 at 19:42
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    Is the intention of this community to make a donation with the intention that the recipient pays off/ pays down their student loan debt? If so, could you simply make a payment on behalf of the recipient rather than having them prove that they have a debt and sending them a check hoping they do what you want with it? If you're giving to people who are struggling with student loan debt, you can buy delinquent debt, including student loan debt, for pennies on the dollar and just write it off. – Justin Cave Sep 17 at 20:18

The typical way of verifying someone's debt is to pull a credit report. Given the nature of your request, the pull would be "soft" in the sense that it would not harm their credit score.

The advantage of using a credit report for debt verification is that you're involving an independent third party. By pulling the report (or using a credit verification service to do so), you eliminate the chance that the consumer can fabricate data (i.e. someone may show you a false statement). You also get access to the entire debt load a consumer is carrying, which would include both private and Federal student loans. Because it sounds like you intend to operate a charity to give people money if they can prove they have a student loan, there may be a very high incentive for people to fake the proof, which makes using a credit report very attractive.

Credit bureaus also provide electronic interfaces to facilitate this, which may help given you have stated this will be done for a large number of people.

Pulling someone's credit report requires you to get their permission, and to handle sensitive data about their identity. However, third-party services can mitigate the risk by handling the consent and sensitive PII on your behalf, and even potentially filter the report itself to just the lenders or products you're interested in.

With respect to the specific case of validating Federal student loans, the National Student Loan Data System exists as a clearinghouse of information available to validate loan details. However, this system is intended to support consumers (borrowers), not vendors or charities. There may be restrictions on it's use for the purpose you are proposing.

  • This is perfect. I knew that I wasn't experienced enough to determine the straight forward solution. Thank you! – RylonMcnz Sep 18 at 12:48
  • Upon reaching out to a company which performs soft pull credit reports as a service, they've told me that the charitable nature of what I'm doing does not have "permissible purpose". They said that based on the Fair Credit Reporting Act, I would need to be a lender, broker, or something of that nature. The person I talked to did not seem confident in their understanding of the situation though, so I'm going to approach other companies of this nature. Do you happen to know about this "permissible purpose"? Perhaps this solution is not appropriate for my situation? – RylonMcnz Sep 18 at 18:01
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    @RylonMcnz Permissible purpose is intended to prevent people from obtaining credit reports for illegitimate reasons. There's a list of approved reasons, but there are giant loopholes. Look on pages 6 and 7 of this pdf: cfpaguide.com/portalresource/… Your use case could fall under points 2, 3e, or 3f. – dwizum Sep 18 at 18:05
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    I should add, at the risk of sounding critical - you're asking some very basic questions. If you do intend to follow through with this charity concept, you should make sure you're working with legal and other resources as appropriate. Giving money to people with loan debt sounds great but it strikes me as fraught with risk. – dwizum Sep 18 at 18:07
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    Thank you for being so helpful. Rest assured that I'm only getting a sense of possibilities, and do not intend to execute any financial actions until seeking legal advice. – RylonMcnz Sep 18 at 21:01

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