It’s not uncommon to think that most scams are directed at seniors, but this isn’t always the case. A study on millennials and fraud shows that millennials are 25% more likely to report losing money to some form of fraud than people over 40.
A different study on scammers conducted by the Better Business Bureau shows that it’s not just millennials who are highly susceptible to scams. Individuals ages 18 to 24 are the victims of 42.4% of reported scams, and individuals ages 24 to 34 are subject to 37.3% of reported scams.
These percentages are higher than those for any other age group in the study. The ages associated with the highest scam likelihood line up with the ages that most individuals go on to college. There are several reasons why scammers target college-age students, including:
These situations can be difficult to deal with on both a personal level and a financial level. The best way to avoid scams is to make sure that you and your finances are protected. When your personal information or your financial information is asked for, you should always proceed cautiously.
It’s a good idea to know what to look out for; below are some warning signs to be aware of:
Scammers are becoming more clever, and it is important to educate yourself about the different methods that are commonly reported, and what to look for to avoid them. The information below is meant to highlight some of the scams that commonly target college students in particular.
College is expensive, and students may not have saved up enough to pay for college without financial aid or scholarships. Financial aid and scholarship scams target college-age students because they are generally the ones who are seeking out scholarships, and financial aid.
The Federal Trade Commission (FTC) explains that scammers make guarantees of scholarships, grants, and financial aid packages in exchange for a fee. College students could be more susceptible to these scams because they are currently enrolled in — or applying to — higher education institutions, but also because financial aid and scholarships are potentially new topics to them.
If you are new to higher education funding and are unsure how the different options work, you may not have extensive knowledge that would help you weed through appealing scam offers. Watch out for the following generalized warning signs:
In order to avoid financial aid and scholarship scams, you need to understand how these two educational funding options work, and what scams are out there. Below are various examples of financial aid and scholarship scams that target college students.
Student financial services help provide future and current students with information like ways to pay for school and how to apply for financial aid. In student financial services fraud, the scammers contact students via telephone, mail, or email with some too-good-to-be-true offers like “help filling out financial aid documentation” or “special grant applications.” Once they have the student convinced, they ask you to provide personal information or to pay a fee upfront in order to secure the service.
Student financial services do not cost money. They are provided through a collegiate organization for both current students, prospective students, as well as past students. If you are asked to pay money or give information, you should automatically become hesitant. Look up the number for the college or university in question, and verify whether the offer is real or not.
With an unpaid tuition scam, scammers reach out to students directly, or they contact the students’ parents in order to convince them that there is a remaining balance on the student’s account that needs to be paid immediately so that the student’s enrollment isn’t affected.
The best way to discover whether this is true is to call your school’s billing or registrar department. They will ask several questions to verify your identity, then provide an overview of what your account looks like. You can also access this information online by using your student account.
You should be aware that most billing-related information will be sent to you via mail. Billing-related issues will be directed to the student, not the parents. If you have received this call as a parent, reach out to your child and have them determine whether or not the information was true or not.
The Free Application for Federal Student Aid (FAFSA) is a form that allows students to apply for financial aid to help pay for college. You provide a variety of information that helps determine whether you qualify. If you qualify, then you may be eligible for grants, work-study programs, and student loans.
There are four common FAFSA scams to be aware of:
To help avoid FAFSA scams, talk to an academic advisor if you are stuck. Remember that the FAFSA is always free and that they will never need your banking information. Avoid financial aid seminars unless they are advertised by your academic institution, and be wary of “exclusive” or “special” offers. Lastly, never give out your FAFSA ID, or account information.
The Internal Revenue Service (IRS) is warning consumers about the federal student tax scam going around. Scammers are impersonating IRS workers in order to demand a federal student tax that doesn’t exist. They are asking students or recent graduates to send money via wire transfer, MoneyGram, or other untraceable money transfer methods. If the individual hesitates or says they aren’t going to pay, the scammer claims that they will be reported to the police.
One of the best ways to avoid this scam — as well as any other tax scam — is to research taxation to gain insight into how taxes work and what we are taxed on. The IRS does not contact taxpayers via phone. They also do not request immediate payments of taxes or back taxes, nor do they threaten taxpayers if they don’t pay.
Scholarship scams target students by charging them to apply for a scholarship, or through other fraudulent guarantees. There are endless amounts of scholarships, so navigating what is real, and what is fake can prove difficult. Some of the phrases to watch out for include things like:
The more you know about scholarships and how they function, the better equipped you are to avoid scams. This could be as simple as knowing the difference between grants and scholarships, or as complex as knowing the specifics surrounding scholarships for undocumented students.
The best way to avoid scholarship scams is to work with your guidance counselor to find legitimate opportunities. You can even search for scholarships online, then research the scholarship prior to applying.
Student loan scams are so prevalent because today, around 70% of American students need to take out student loans to go to college. Additionally, student loan statistics show that young college graduates with student loans report financial struggles due to their student loans. Their financial struggle may make them more of a target for different scams or fraudulent activity.
Student loans can also be a prime breeding ground for all sorts of scams since many individuals are unsure just how student loans work or specifically how paying back student loans works. The best way to avoid student loan scams is to avoid taking out any loans, but this is not always possible for everyone. Student loan scams vary in their fraudulent attempts, but below are some generalized warning signs to watch out for:
The best way to avoid student loan scams is to understand what types are out there and what they entail. Below is a list of common student loan scams to become aware of.
Scammers will contact you saying that they are managing or servicing your loans. They claim that the service is necessary or mandatory in order to get better rates or terms, but they require some form of fee. The scammer may offer to reduce your interest rate, extend your loan term, consolidate your loans, or apply for loan forgiveness.
The best way to avoid this type of scam is to understand how your loans work, and what free services are available to you. The Department of Education, or a loan servicer, will never ask for any sort of fee outside of your monthly loan and interest payment, and if you are late, possibly a late fee.
You can navigate your borrower information, repayment plan options, and loan consolidation by contacting your student loan servicer. Student loan servicers are appointed to you, and common student loan servicers include FedLoan, Great Lakes, Navient, and Nelnet.
If you are unsure whether the student loan servicer you are communicating with is a scammer or your real servicer, research the servicer’s contact information online and compare it with the information of the person you are talking with.
As mentioned above, millions are struggling with student loan debt that puts them in uncomfortable financial situations. Debt relief is a real possibility for those with dangerous amounts of debt, but scammers are offering fake debt relief “opportunities” for a price.
Debt relief scams function by scammers offering to negotiate with creditors to lower or pay off the loans that are owed. They offer to provide this service for an upfront fee of some amount, and then they never follow through once they have received payment — leaving the debtor in an even poorer financial situation. Be wary of the following debt relief scam warning signs:
Although legitimate debt-relief programs will reach out from time to time, the best way to avoid these types of scams is to research programs yourself and gain insight into debt management. This should include how to budget, a variety of good methods for paying back debt, and even specific things like what to do about defaulting on a student loan.
Student loan debt consolidation involves combining all of your individual loans into one large loan. This is different from credit repair in that you aren’t negotiating your credit, rather, you are turning multiple monthly payments into one single, convenient payment with one interest rate.
Anyone is able to do this, even individuals with bad credit. This also creates another opportunity for impersonators to scam individuals out of their money with fake promises of loan consolidation. Below are some red flags to be aware of for loan consolidations scams:
You can avoid scams by doing your own research on how loan consolidation works. Research different loan servicing companies that offer loan consolidation, ask questions, and shop around to compare offers. It’s also a good idea to take a look at all of your individual loans and pay off any smaller, more manageable loans that may have a higher interest rate. Lastly, make sure you get everything in writing.
Student loan forgiveness — also called student loan cancellation or discharge — means that you are no longer responsible to repay a portion or all of your student loans. There are certain types of loan forgiveness to be aware of that only certain demographics qualify for — these include:
Additionally, some employers may offer student loan forgiveness as a part of your salary or benefits.
Those with large amounts of debt are always looking for ways to get rid of student loan debt, and this provides a viable space for loan forgiveness scams. Scammers will create unique offers to eliminate your debt for some reason such as attending a certain college or living in a certain area.
You should watch out for the following:
Again, the best way to avoid these scams is to educate yourself on how student loans work, and who/what qualifies for student loan forgiveness. Applications to receive student loan forgiveness should never cost money, and not everyone qualifies for loan forgiveness — regardless of financial situation.
According to the FTC Consumer Sentinel Network, there were 54,150 reports of credit card fraud in 2019 — nearly 2% of all of the fraud reported that year. As mentioned earlier, college-age individuals make up the biggest percentage of individuals affected by scams and this could be due to their lack of financial knowledge and experience with credit cards.
The FBI provides the following generalized tips for avoiding credit card fraud:
It is important to note that learning about credit cards, proper usage, favorable versus unfavorable terms, and common credit card fraud can better prepare individuals to avoid credit card scams. Even simply learning about good secured credit cards for students can aid in keeping your credit card secure by providing a safe, simple introduction to credit. The information below is meant to provide college students insight into different credit card scams.
Predatory lending is an attempt made by lenders to take advantage of borrowers. In this scam, the lender convinces the borrower to enter into an agreement that benefits the lender and is a misfortune for the borrower. Examples of this could include high interest rates, unreasonably long terms with early payoff fees. Below are some examples of predatory lending practices to be aware of if you receive a predatory credit card or loan:
The best way to avoid this is to understand what to look for when choosing a credit card, and to research consumer rights and credit laws.
If you have bad credit, you may be more at risk for credit repair scams. College students are popular targets because they may be looking for credit repair options after defaulting on student loans. Below are some examples of credit repair scams:
One of the easiest ways to avoid and identify credit repair scams is to research the best credit repair companies that are legitimate or study up on how to repair credit on your own.
Working a job during college can be stressful enough for any student to balance with school, let alone trying to find legitimate work and avoiding all of the fake offers. Employment scammers try to take advantage of job seekers by creating a fake job and company with a plan to receive money upfront from the job seeker or, they’ll try to get you to provide sensitive personal information like your Social Security number, banking number, and other information for identity theft.
Below are examples of some job scams to watch out for and different ways to identify a fake job offer:
With the rise of the internet changing how the world is, there are more and more ways to earn money online every day. Remote work is becoming more popular and this creates another opportunity for scammers to take advantage of desperate job-seekers.
Be careful when searching for online jobs and use the warning signs above to analyze jobs that may seem a little peculiar to protect yourself from identity theft or losses. Remember to research the company. Look for a physical address, and make sure the contact information online matches the email or phone number that you are communicating through. If you can’t find anything, search the business for their Better Business Bureau (BBB) rating.
There are a variety of housing-related scams to become aware of; 5.2 million U.S. renters have lost money from some form of rental fraud. College students who are at risk often need help finding housing and moving into a house. Additionally, it can be hard to live independently while going to school, so you may also need help finding roommates. These three aspects create the perfect zone for scams. If you are moving to a new area for college, you may be even more at-risk.
Below are some examples of the different housing-related scams to make yourself aware of.
Scammers will create a fake home or rental opportunity on a housing platform (e.g. Craigslist, Facebook Marketplace). In some cases, they advertise a property that they do not own or have the rights to rent, and sometimes the housing itself may not even exist. Some red flags to be aware of when finding housing or a roommate online are:
Some of the best ways to avoid fake housing or roommate scams are to avoid sending any money until you have seen the house or the roommate. Avoid trusting your roommate as an authorized user on your card. Use reputable housing apps. Lastly, get everything in writing. Don’t make hand-shake deals, or sign contracts with any blank spaces.
Moving scams involve fake moving companies that make appealing offers with no intent to actually move. College students — especially those going to a college in a new area — need movers, and this creates a perfect opportunity for a scam. The specifics of the movers’ scam will vary, but below are examples of common moving scams to watch out for:
Take the tips into consideration above, but the best ways to avoid moving scams include:
There are scams that target individuals looking for books — whether they’re teachers, individuals reading for pleasure, or college students looking for textbooks. Scammers will send invoices for books that they do not even have in order to swindle consumers into sending them money. They may offer better pricing, free shipping, or some other aspect that makes their offering seem appealing, then never deliver the products.
Avoid these types of scams by practicing safe online shopping, researching who you purchase your books through, avoiding third-party payment methods such as Venmo, renting books through the library, and purchasing your books through your school’s bookstore.
Technology is important throughout daily life, and with such a prominent role in everyday life, there are also a variety of new opportunities for technology scams that arise. Since technology is a large part of the lives of college students (e.g. studying, online classes, communication) they are potentially at risk for such scams.
These scams can be conducted via phone, internet, or specifically through social media, so be aware of all types of technology. Most of these types of scams are imposter scams like tech-support scams, romance scams, identity-theft cyber scams, family emergency scams, IRS imposter scams, and swindles related to current events such as coronavirus scams.
The information below is meant to provide information on phone, internet, and social media scams that may target college students.
A federal grant scam will begin with an individual reaching out to you via phone to let you know that you have been awarded, or chosen to receive, federal grant money. The scammer will either ask for payment for their services, or they will try to obtain various personal information. Here are some tips and things to keep in mind to help try and avoid this type of scam:
Scammers are posing as FBI employees making a claim to their victims that they owe the government a large sum of money. They may claim they owe the money for a variety of reasons like missing jury duty, unpaid tickets, outstanding utility balances, or that they have a warrant out for their arrest.
Another FBI phone scam impersonates government officials and claims that their Social Security number has been compromised, or their SSN has been used to open bank accounts. The FBI warns of scammers and reminds the public that the FBI never calls private citizens to request money, or threaten arrest. According to the FBI, you should attend to the following to avoid becoming the victim of a scam:
Public Wi-Fi scams target individuals using free Wi-Fi on an unsecured, shared network. These are often offered in public areas like libraries, coffee shops, and restaurants for customer use, but unfortunately, hackers can steal information from individuals on these networks by cracking into the network and accessing user data.
College students are using technology and Wi-Fi constantly, putting them at risk for such a scam. Use the following tips to help you avoid this type of scam:
College degree scams take advantage of individuals looking to earn a degree. The state of online education and its growth creates an ideal breeding ground for scammers. Most of these scams offer some sort of degree for a flat fee that requires minimal or no course work or time. This is called a diploma mill. The following are considered signs of college degree scams, or diploma mills:
The best way to avoid these types of scams is to do your research. If you are looking to earn a degree, find the school yourself and be sure that the program is accredited.
High school diploma scams target individuals looking to obtain their diploma. These types of scams function by tricking consumers into purchasing a diploma that is not real. Diploma requirements vary from state to state, so this nuance provides an ideal opportunity for scammers to take advantage of students — especially those who need their diploma to apply to college. Below are signs of this type of scam:
Phishing scams use a variety of techniques to trick individuals into offering personal information up to scammers. Phishing emails are common, but you may also experience phishing attempts via text message, social media, and other forms.
Phishing attempts look like they are coming from a company that you know and trust. According to the FTC, scammers make bold claims, or concerning messages that draw individuals in — like:
The best way to avoid phishing scams is to use security software, keep your phone up to date, use multi-factor authentication, back up your data, and analyze unsolicited emails.
College students struggle with a variety of financial crises, so free offerings sound appealing. Many scammers are using “freebie” offerings that end up being costly. These scams are often advertisements on the internet, or sometimes you might be contacted via phone or email. Below are some signs of freebie scams:
In order to prevent yourself from falling for one of these scams, avoid clicking on “free” advertisement popups, research the company who is offering the “freebie,” and never pay for something advertised as a “freebie.”
Some scammers may find personal information online and use that information to their benefit. How it functions is that scammers take the information and approach the individual, threatening to expose potentially harmful or embarrassing information to people they know. In an attempt to keep that information private, individuals are often willing to pay scammers what they ask for.
Below are tips for avoiding this type of scam:
If you have fallen victim to a scam, there are certain things that you should do. It may feel embarrassing to admit, but you shouldn’t feel bad for falling for a scam. The resources below are places to report scams, sources for information on scams, and organizations designed to protect individuals from scams.