An unfamiliar federal student loan can be a sign of identity theft, even if you never went to college. In its October 29 announcement of Operation Ghostbusters, the Justice Department said investigators had identified people whose identities were used to enroll at institutions they had never attended.

The department announced charges against five defendants and a seizure of more than $750,000 in cryptocurrency. Prosecutors allege that stolen identities were used to obtain student aid, with refunds diverted through bank accounts to overseas participants. The defendants are presumed innocent. The DOJ announcement directs suspected victims to the Education Department's inspector general.

Colleges have weighed new fees and other measures to curb fraudulent applicants, Inside Higher Ed reported. Identity-theft victims also face the task of disputing aid obtained in their names.

Identify the loan and its servicer

The Student Placement and Financial Aid office at the University of Texas at Arlington in an archival black-and-white photograph.
An undated archival view of the University of Texas at Arlington's Student Placement and Financial Aid office. The image is context, not documentation of the cases.Photo: University of Texas at Arlington Photograph Collection / Wikimedia Commons, CC BY 4.0.

Federal Student Aid's servicer guidance says borrowers can find their servicer through the My Aid section of their StudentAid.gov account, then select View loan servicer details. A servicer handles billing and other federal loan services for the Education Department. Its help with federal student loans is free.

If a loan appears that you did not authorize, tell that servicer that you suspect identity theft. The federal identity-theft discharge form asks for each disputed loan's amount, date, school name and school address. Its instructions direct people who need loan information to StudentAid.gov/login or 1-800-4-FED-AID. Record the specific disputed loans rather than assuming every account under your name has the same problem.

Report the identity theft

The Education Department OIG's guidance calls for contacting the loan servicer, reporting the matter to OIG and filing an FTC report at IdentityTheft.gov. OIG handles matters involving Education Department programs, including federal student aid.

The FTC's official recovery video explains how IdentityTheft.gov creates an identity-theft report and a personal recovery plan, including letters and forms. That report can help document what happened; a loan discharge still requires its own review.

DOJ says the FBI has sent letters to many identified victims. People with questions about those letters can contact their local FBI field office. DOJ advises recipients to follow the instructions in those letters.

Ask which discharge application fits

A fountain pen rests on an addressed envelope on a desk.
A fountain pen and envelope in a February 25, 2012 photograph. The federal discharge application requires supporting documentation to accompany the request.Photo: Petar Milošević / Wikimedia Commons, CC BY-SA 3.0.

Federal Student Aid lists both false-certification and forgery discharge options for certain fraudulent federal loans. Eligibility depends on the circumstances and loan program. Ask the servicer which process applies to the loan you are disputing.

The False Certification (Identity Theft) application covers Direct and FFEL loans falsely certified because of identity theft. It asks whether you applied for the loan, signed a promissory note or received any benefit from the money. It also asks how you discovered the loan and how your identity was used without authorization.

Supporting evidence listed on the form includes a court determination, an FTC identity-theft affidavit, a police report, credit-bureau disputes or other evidence. Examples of other evidence include records showing your signature or where you lived when the loan was made. Attach copies of the evidence you identify and return the application to the address specified on the form or, if none is shown, your loan holder.

A criminal investigation does not automatically cancel a loan. FSA's discharge guidance says payment requirements during review depend on the type of application. Check with the servicer about whether payments must continue while it is reviewed.

Freeze credit and distinguish a fraud alert

A credit freeze restricts prospective creditors' access to your credit file and can help prevent new accounts. The Consumer Financial Protection Bureau says freezes and temporary lifts are free. Contact Equifax, Experian and TransUnion separately. A freeze does not affect your credit score, and you can still review your own file.

A fraud alert works differently: it tells businesses to verify your identity before opening new credit. The FTC says an initial alert lasts one year, and contacting one nationwide bureau triggers notification to the other two. A freeze lasts until you remove it. Neither request is an application to discharge an existing student loan.