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Learning life lessons at an early age is good, except when your bank account gets drained by a scammer and you learn the hard way. Many students are starting their college careers not knowing they are especially vulnerable to fraud.
One way fraudsters target students is through scholarship and financial aid scams. Many students jump at the opportunity to receive tuition financial aid, which is what scammers count on to take advantage of the situation.
Here are some common scholarship-related scams and advice to help college-bound students avoid them!
Fake Scholarship Sweepstakes
Fraudsters create official-looking scholarship sweepstakes requiring money up-front to participate. Legitimate scholarship providers don’t want – or need – your money. They want to help students attend school, not earn a profit.
If a scholarship is asking for any sort of fee to apply, it’s likely not a legitimate opportunity. In the end, victims usually write off the expense, thinking they simply didn’t win the scholarship.
Application Fee Scholarships
Fake scholarships are a fraud where the scammer promises to provide guaranteed college scholarships, even going as far as creating an official-looking scholarship program. Most seek to get students and their families to pay money to the scammer upfront as part of an application fee, but some scams also involve identity theft.
During a typical scam, 5,000 to 10,000 applications and fees of $5 to $35 are received, a lucrative profit for the bad guys. What makes this scam doubly bad is the student has also provided their personal information on the fake application, opening themselves up to identity fraud — in addition to money theft.
Student Tax Scams
Student tax scams generally involve a scammer reaching out via phone, text, or email in an attempt to get students to click on a link and provide personal information or pay money for a “university student fee.”
Scammers often spoof phone numbers from Washington, D.C. to impersonate the IRS. It’s important to note the IRS will never contact you or your student via email, text, social media, or phone. Official contact is through the mail.
Phishing emails are commonly used with subject lines like “tax refund payment” or “recalculation of your tax refund payment.” Scammers hope that students will click on these emails and enter personal information.
Falling for any scam is incredibly stressful, especially for young college students. However, there are steps victims can take to recover lost funds and protect themselves in the future.
Students who fall victim should start by reporting the incident to the FTC on their website. Additionally, they should contact their financial institution’s fraud department to work on getting their funds back and charges reversed.
A good rule of thumb is to be skeptical about any scholarship that requires money upfront. Just one phone call to the university can help prevent your student from falling victim to a scholarship award scam. Use common sense throughout the process. If something ever seems sketchy, stop giving information and start asking questions.
