NY: SUNY mistake shows ex-students as defaulters on loans--software date error By Associated Press, 9/27/2000 09:47

BUFFALO, N.Y. (AP) The State University of New York has put an undeserved blight on the credit ratings of untold former students by erroneously reporting outdated student loan defaults.

State officials confirmed an error at SUNY's Student Loan Service Center in Rensselaer caused old information, some dating to the 1970s, to be reported as current, according to The Buffalo News.

State university officials said they do not know how many consumers were labeled as delinquent debtors after the seven-year limit on such disclosures had passed.

''Basically, what happened is the software the student loan center uses put a date in the wrong place,'' said SUNY spokesman Dave Henahan. He described the problem as confined to ''a very small percentage'' of its accounts.

However, the bad data emanating from the state office was widespread enough to earn a vote of no confidence from one of the big three credit agencies.

Atlanta-based Equifax recently purged data from SUNY's loan office from all its files, representing more than 100,000 accounts, said Equifax spokesman Dave Mooney. The decision does not mean bad information was found in every account, Mooney said. The bureau checked a handful of credit reports with information from SUNY and found enough mistakes to prompt Equifax to err on the side of caution and wipe the data clean, he said. ''Basically, they couldn't be sure of their dates, so we couldn't be sure of their dates,'' Mooney said.

Credit agency TransUnion is checking into information submitted by SUNY, according to a company official. Experian has also launched an investigation into the SUNY data.

The student loan center in Rensselaer serves as the central billing and collection office for SUNY campuses, serving all students who have left campus through graduation, transfer or withdrawal.

SUNY will resubmit all its account information to Equifax next month under a new, simplified credit reporting system, Mooney said. The state office was already scheduled to switch to the new reporting system this fall, before the problem was uncovered, he said.

A consumer watchdog said the state error is no small problem for any former students involved.

''Essentially, they've labeled you a deadbeat,'' said Russ Haven, legislative counsel for the New York Public Interest Research Group. ''You've become a financial pariah. Particularly, bankruptcies can be devastating to a person's credit.''

Haven said a similar problem in Massachusetts happened in the 1990s and that led to a state law entitling consumers to a free copy of their credit reports each year.

http://www.boston.com/dailynews/271/region/SUNY_mistake_shows_ex_students:.shtml

-- Carl Jenkins (Somewherepress@aol.com), September 27, 2000