Stay on Guard for School-Related Scams

With a new school year just around the corner, now’s a good time to familiarize yourself with common scams targeting students and recent grads. Given the significant costs associated with obtaining a degree, criminals often try to take advantage of those looking to make some extra cash or obtain relief from loans.

Unfortunately, college students are often targeted by scammers. Common schemes include too-good-to-be-true work offers, debt relief claims, and fake scholarships or other financial aid. Of course, anyone can be targeted by these frauds, but college towns and campuses are frequent hunting grounds.

Fake money-making opportunities

These can come in all shapes and sizes, but usually involve an employment offer that sounds too good to be true. One common version is a remote job where the candidate moves through the hiring process unusually fast, only to be told by the “employer” (actually a scammer) that they need to purchase equipment before they can start work. Another version is a multilevel marketing business that requires you to buy inventory upfront from other marketers in order to sell it. College campuses can be littered with posters advertising gigs to make quick cash, but they’ll probably leave you in the red.

Bogus debt relief

Bad actors sometimes pose as debt servicers, offering either more favorable terms or quick cancellation of the loans. Criminals may impersonate legitimate loan servicers, including federal agencies like the Department of Education. They often request a fee from their target without delivering the services promised. The harms from these scams can add up quickly. Victims may be manipulated into sending money directly to scammers, and they may also stop making payments to their real loan servicers because they believe their debt has already been canceled. This can lead to late fees, interest charges, and negative impacts on credit.

Financial aid imposters

Prospective and current college students may run into phony scholarship and grant offers. Similar to the two schemes above, the advertisers of these fake awards might try to take their target’s cash under the guise of taxes or paperwork fees. They may also ask for bank account or credit card information to “confirm eligibility.” While there are legitimate companies that sell access to databases of scholarships, genuine businesses should never guarantee the applicant will receive an award.

Keep the following tips in mind ahead of the new academic year:

• Take a pause and get a second opinion. Take a moment and ask someone you trust if an offer seems too good to be true before you send money or share personal information.
• Be wary of upfront fees or significant equipment costs. Genuine employment, debt relief, and financial aid offers should not ask for your money to begin.
• Legitimate debt relief takes a while. The genuine debt cancellation programs offered by the U.S. Department of Education require years of repayment before the cancellation can take effect, often a minimum of one decade.
• Avoid unsolicited awards. It is very unlikely you won a scholarship you did not apply for.
• Explore free resources offered by the Education Department. More information on available financial aid and debt relief options can be found at gov. Carefully inspect URLs to avoid imposters.
• Act quickly if you did pay a scammer. The Federal Trade Commission has outlined the next steps you can take depending on how the money was sent.

If you believe you have encountered a scam, please file a complaint on our website. Your report helps Fraud.org alert the public and share critical information with consumer protection agencies and law enforcement partners.