University of Miami officials have confirmed they sent students' private data to lender Sallie Mae last summer, even though students said they never applied for a federal loan from the company.

In the school's view, students did apply for a loan when they filled out the standard form all students submit to establish eligibility, financial aid director James Bauer said.

But national experts scoffed at that interpretation of federal privacy and lending laws, saying receipt of the Free Application for Federal Student Aid FAFSA does not by itself allow schools to share student data with a private company. ...

Federal law prohibits schools from sharing private student information, such as Social Security numbers or birth dates, without their explicit consent. And lenders can't send unsolicited federal loan applications to students who haven't previously received loans.

About 14-million students submit the FAFSA each year, often sending it to multiple schools during the application process, according to the federal Department of Education. ...

There is no space to indicate a lender choice. Stephen Burd, senior fellow at the New America Foundation, said some students fill out the FAFSA form as a hedge, even though they're not sure they'll need a federal loan.

"I would imagine that families would be extremely unhappy to find out their data is being used in this way," he said. "Having the Master Promissory Note filled out for you is obviously an effort to deny students a choice of lenders." ...

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