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Call Kurtis Investigates: How Could I Take Out A Student Loan When I Was An Infant?

SACRAMENTO (CBS13) - Theresa Myles expected to be done with college now that she's in her late twenties.

"Everyone else is going in the right direction," she said. "I'm just stuck at a dead end."

She can't afford school because the U.S. Department of Education refuses to give her a student loan for something it claims she did when she was still in diapers.

"A 1-year-old can't be taking out a student loan. It's impossible," she said.

The Federal agency claimed she owed $20,000 for a student loan taken out in 1989 when she was just an infant. As absurd as it sounds, for six years, she somehow couldn't convince the government agency it made a mistake. She says she sent them copies of her birth certificate, driver's license, social security card and a police report saying her identity must have been stolen.

"There's nothing we can do for you," she says she was told. "It's your loan."

The blemish damaged her credit and she can't even get a car loan or credit card. This colossal mistake forced the communications major to take breaks from school and work three part-time jobs to save enough money for tuition and books.

"This is six years of going through the motions, frustration, anger, rage," she said. "Feeling hopeless."

To make matters worse, last year the Department of Education garnished her $1,140 tax refund to pay the debt. It was money she planned to use for school.

We showed her story to State Assemblyman Mike Gatto.

"That is really really sad," he said. "It's kind of hard to believe any government bureaucracy would try to argue this person took out a loan at age one."

The Democratic assemblyman from Los Angeles says he's equally concerned with the new focus of identity thieves, which we first exposed in 2013.

"They've stopped targeting adults. They've now focused on kids under the age of 18 because they're not checking their credit," Gatto said.

Gatto just introduced a state bill that would force the three credit bureaus to allow California parents to freeze their kids' credit. Several other states have adopted similar laws.

"We don't want anyone to be in the same situation, where they wake up at age 18, they want to get a credit card and they find out somebody has been using their credit for years."

Theresa describes what happened to her as the biggest roadblock she's ever had in her life.

"While everyone can go on and accomplish great things, and make moves, I'm just stuck here," she said.

We contacted the Department of Education to find out how they could give a toddler a student loan. They told us, "1989 pre-dates many of the processes now in place now to deter and detect student loan fraud." The agency tells us it started comparing social security numbers on loan applications with the Social Security database in 1994.

After we started investigating, the agency finally realized the hell it put Theresa through. "The Department sincerely apologizes for the unfortunate processing errors which clearly slipped through a number of control and oversight measures." The agency told CBS13 it would use this case for training.

Theresa got her garnished tax refund back. The agency has cleared the debt and opened the door for her to get a student loan and finish school. She can also now get a car loan and her first credit card.

"It just feels good. Weight's been lifted off my shoulders," she said. "Now I can live a normal life and able to do the things I want to do."

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