Avoiding Financial Scams & Fraud

College students are often targeted by financial scammers. Students must be aware of current trends and stay on top of their finances to avoid scams.

College students are increasingly targeted by financial scams that exploit their limited experience and financial vulnerability. In fact, a recent Better Business Bureau study found that students who fell victim to a scam had a 42 percent chance of losing money compared with just 28 percent of nonstudents.

Common scams include fraudulent scholarship and financial aid offers, where scammers pose as legitimate organizations to steal personal information or charge fees for non-existent services. Housing scams have also surged, with reports indicating a 300% increase since May 2022. In these schemes, fake rental listings lure students into paying deposits for properties that don’t exist or are already occupied.

Additionally, identity theft remains a significant threat, as students often share personal information on social media and unsecured websites, making them susceptible to fraud. Hackers can also exploit public Wi-Fi networks commonly used on campuses to access sensitive data. To protect themselves, students should be cautious about sharing personal information, verify the legitimacy of offers and listings, use secure internet connections, and regularly monitor their financial accounts for suspicious activity.

Common scams targeting college students:

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Financial aid refund scams
Scammers exploit college students by stealing financial aid refunds through phishing scams, fake student portals, and identity theft. Since many students rely on financial aid to cover tuition, housing, and other expenses, fraudsters take advantage of this by tricking students into providing personal information or altering direct deposit details.
- Scammers send emails pretending to be from the college financial aid office, FAFSA, or a government agency. These emails often contain fake login links that look like the official student portal, tricking students into entering their credentials. Once the scammer gains access, they can redirect the refund to their own account.
- Scammers impersonate school staff over the phone, claiming there’s an issue with a student’s financial aid refund. They pressure the student into providing personal details, such as social security numbers, FAFSA login information, school portal login information, or banking details.
- Once scammers gain access to a student’s account, they modify direct deposit settings, rerouting financial aid refunds to fraudulent bank accounts or prepaid debit cards. The student only realizes the scam when their expected funds fail to arrive.
- Some scammers pretend to be financial aid consultants who claim they can help students “speed up” or “increase” their refund for a fee. In reality, these services are either unnecessary or outright fake, leaving students with financial loss.
Red flags and how to avoid financial aid refund scams:
- Unexpected emails or texts asking you to log in or confirm your financial aid information.
- Emails with urgent language like “immediate action required” or “your refund is on hold.”
- Fake website links that look similar to official university or FAFSA pages (e.g., “finaid-refund.com” instead of “studentaid. gov”).
- Requests for social security numbers, FAFSA credentials, or banking information via email or phone.
- Offers to “speed up” or “increase” your financial aid refund for a fee.
TIPS:
- Always access financial aid accounts through official websites like studentaid. gov or your college’s portal (never click email links).
- Verify any financial aid requests by contacting your university’s financial aid office directly.
- Set up multi-factor authentication (MFA) to protect student portal accounts from unauthorized logins.
- Monitor your student account and bank transactions for any unauthorized changes.
- Report phishing attempts to your school’s IT department and Federal Trace Commission (FTC) if you suspect fraud.
- Pay close attention to communications from your university’s financial aid or student financial services departments.
Unsolicited scholarships and grants
Scammers exploit college students by offering fake scholarships or grants to steal personal information or charge fraudulent fees. These scams often appear as emails, phone calls, social media messages, or even physical mail, claiming that the student has been "selected" for an exclusive financial award they never applied for. The urgency and promise of free money make these scams especially effective.
- The student receives an email, letter, or phone call stating they have won a scholarship or are eligible for a special grant – without applying. The message may include phrases like "Guaranteed to receive aid!" or "Act now before it's too late!" or "federal grant" to create legitimacy and/or urgency.
- The scammer may ask for an upfront payment (e.g., a "processing fee" or "application fee") before the scholarship can be awarded. Real scholarships never require payment.
- The scammer may ask for social security numbers, bank details, or student ID numbers, claiming it's needed to "process" the award. This is a tactic to commit identity theft or financial fraud.
- Once the student submits payment or personal information, the scammer vanishes, leaving the student with financial loss or compromised identity, and no scholarship.
TIPS:
- If you didn't apply, it's likely a scam. Be skeptical of scholarships you didn't seek out or apply for.
- Legitimate scholarships and grants do not charge fees or require upfront payments.
- Scammers use urgency ("Act now or lose your award!") to force quick decisions.
- Check if the scholarship is listed on reputable websites like Fastweb, scholarships. com, or your school's financial aid office
- Be cautious of scholarships promoted through random calls, social media messages, or sketchy websites.
- Never give out social security numbers or banking details to unverified sources.
Financial aid eligibility scams
Some companies claim they can make you eligible to get financial aid, including grants, loans, work-study programs, and other types of aid. For a processing fee, these companies say they’ll handle all the paperwork for the so-called program.

What they’re really doing is filling out the Free Application for Federal Student Aid (FAFSA), which is the free form that determines if you’re eligible for federal aid. Sometimes, scammers will use false information about your family’s income, assets, and benefits to qualify you for more financial aid than you would get if they told the truth.

In addition to losing money to these scammers, you can also get in trouble – including fines up to $20,000 and/or jail time – for any false information on your FAFSA.

TIPS:
- Only you and your family can complete your FAFSA – which is always free to fill out and submit.
- Never share your FSA ID (the username and password that you use to apply for the FAFSA) with anyone – including companies or consultants.
Financial aid seminars
Companies like to promote seminars where you can learn how to get scholarships and financial aid. While some are legit, others are scams. These events are usually high-pressure sales pitches where they tell you to pay immediately or risk losing out on the so-called “opportunity.”

If you go to a financial aid or scholarship seminar, follow these tips:
- Don’t pay any money at the seminar. Only scammers will tell you to pay now or risk losing out on the opportunity. Solid opportunities aren’t sold through nerve-racking tactics like rushing and high pressure.
- Investigate the organization and other options before you pay anything. Search online for the organization’s name plus the words “complaint” and “scam.” See what others say about them. You may find that you can get the same help for free from a school guidance counselor or financial aid advisor.
- Don’t blindly trust “success” stories. The seminar operator may have paid people to give glowing stories. Instead, ask for a list of at least three local families who’ve used the company’s services in the last year. Follow up with the families and ask if they’re satisfied with the products and services they received.
- Don’t do business with anyone who’s reluctant to answer questions or give details. Legitimate business people are more than willing to provide you with information about their service.
- Ask how much money you’ll have to pay and what the company’s refund policy is. Get information on the total cost and get it in writing. Keep in mind that scammers might make it hard or impossible to get your money back, no matter what their refund policy says.
Fake university emails or calls
Scammers posing as college staff use phishing emails, phone calls, or fake websites to trick students into making fraudulent payments. These scams often appear urgent and official, pressuring students into providing sensitive information or sending money for tuition, housing, or other school-related expenses.
- Scammers impersonate university staff, such as financial aid officers, housing administrators, or billing departments. They may contact students via email, phone, or even text, claiming there is an issue with tuition payments, housing deposits, or student accounts.
- The scammer tells the student they must pay an outstanding balance immediately to avoid penalties like late fees, dropped classes, or eviction. The message may include a link to a fake payment portal or instructions to wire money, send gift cards, or pay via a peer-to-peer app.
- If the student clicks a link, they are directed to a website that looks identical to the school’s official site, where they enter login credentials or banking information. This allows scammers to steal money and personal data.
- Once the student submits the payment, the scammer disappears. The student later realizes the university never requested a payment, and the money is unrecoverable. If login credentials were shared, scammers might also gain access to financial aid accounts or other sensitive school information.
TIPS:
- Verify payment requests – contact the official university billing office directly to confirm if a payment is due.
- Check email addresses and URLs – Scammers use email addresses and website links that look similar to the real ones but may have slight misspellings (e.g., “university-billing.com” instead of “university.edu”).
- Never pay through unofficial methods – Universities never ask for payments via wire transfer, cryptocurrency, or gift cards. Only use the school’s official payment portal.
- Enable Multi-Factor Authentication (MFA) – Protect student accounts using two-factor authentication to prevent scammers from accessing personal information.
Check-cashing scam
The scam works by tricking students into depositing a fraudulent check and sending money to the scammer before the check bounces. These scams often appear in the form of fake job offers, scholarships, or even random “overpayments” from someone pretending to buy an item online.
- The scammer contacts a student with an enticing offer, such as a job (e.g., mystery shopper, personal assistant), a scholarship, or a prize. They send a check that appears real, often for an amount greater than expected.
- The student is instructed to deposit the check into their bank account. Since banks initially make funds available quickly, the money may appear to have successfully cleared.
- The scammer then claims that an “accidental overpayment” was made and asks the student to return part of the funds via wire transfer, gift cards, or another irreversible payment method.
- After a few days, the bank realizes the check is fake and reverses the deposit, leaving the student responsible for the entire amount. Since the student has already sent money to the scammer, they suffer a financial loss.
TIPS:
- Never deposit a check from someone you don’t know or trust.
- If someone asks you to send money after depositing a check, it’s a scam.
- Never share your bank account information with others – online or in person.
- Never share your login information with others – banking or social media.
- Verify checks with your bank before using the funds.
- Avoid jobs or offers that require handling money on behalf of someone else.
Textbook scams
College students looking to save money on expensive textbooks are often targeted by scammers offering discounted, free, or secondhand books through fraudulent websites, social media ads, or fake sellers on online marketplaces. These scams trick students into paying for books that never arrive or downloading fake digital copies that contain malware.
- Scammers create phony textbook websites, online adds, or marketplace listings offering brand-new or used textbooks at extremely low prices. The listings often appear on Craigslist, Facebook Marketplace, eBay, or unverified websites.
- Victims are asked to pay through non-refundable methods such as gift cards, Venmo, Zelle, or cryptocurrency instead of using secure payment platforms.
- After making the payment, the scammer disappears, and the book never arrives. Attempts to contact the seller go unanswered.
- Some scams promise an instant digital copy of a textbook in PDF format but instead, provide a corrupted file or malware that can steal personal information or infect a device.
- In some cases, students receive low-quality counterfeit books or an entirely different textbook, making the purchase useless.
TIPS:
- If a book is significantly cheaper than other retailers, it’s likely a scam.
- Avoid buying from unknown sellers without reviews or a track record.
- Scammers often request gift cards, wire transfers, or peer-to-peer payment apps instead of secure transactions like PayPal with buyer protection.
- Legitimate sellers provide refund guarantees and customer support.
- Poor grammar, vague responses, or high-pressure tactics can indicate a scam.
- Check ISBN numbers to ensure you are buying the correct edition.
- Look for free alternatives through your college library, rental services, or open education resources (OER).
Student loan debt relief scams
Scammers exploit college students and graduates by offering fake student loan debt-relief programs that promise quick loan forgiveness, lower payments, or special repayment plans. These scams often use high-pressure tactics, fake government branding, and fraudulent fees to trick borrowers into handing over personal information or money.
- Scammers pose as government agencies or loan services (such as the U. S. Department of Education or a well-known loan servicer like Nelnet or FedLoan) and claim that a borrower qualifies for immediate loan forgiveness or reduced payments.
- Victims are told they must pay a processing fee, enrollment fee, or monthly subscription for debt relief services. In reality, federal loan forgiveness programs never charge fees to apply.
- Scammers ask for social security numbers, FSA ID Login credentials, or banking details under the guise of processing a relief application. This can lead to identity theft or stolen loan funds.
- Some fraudsters convince students to stop making payments to their real loan servicer and instead send payments directly to them. This can result in loan defaults, damaged credit, and financial loss.
- Scammers use phrases like “Limited-time forgiveness program” or “Act now before your eligibility expires” to pressure borrowers into making rushed decisions.
Red Flags & how to avoid student loan debt relief scams:
- If you receive an unexpected offer for immediate loan forgiveness, it's likely a scam.
- Legitimate federal relief programs never charge fees for applications or enrollment.
- Scammers use urgent language to prevent borrowers from verifying information.
- Never share your FSA ID (Federal Student Aid login) or financial details with third parties
- Scammers use logos or fake websites that mimic official government loan services. Always verify directly through
TIPS:
- Check your loan status directly through the U. S. Department of Education’s official website:
- Contact your loan servicer directly to discuss repayment options or forgiveness programs.
- Never pay for federal student loan relief – legitimate programs, like Income-Driven Repayment (IDR) and Public Service Loan Forgiveness (PSLF), are free to apply for.
- Report scams to the FTC at if you suspect fraud.
Avoiding financial scams & fraud resources

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Avoiding Financial Scams & Fraud

Common scams targeting college students: