23 Oct

5 Ways Scammers Target College Students, and How to Protect Your Student!

If you thought your college student was too new to the “adult world” to be the target of a scam, recent news reports may convince you otherwise. They may not have credit to steal, but–like many credit card companies–scammers are targeting teens and college students and counting on their naivety.

New and Improved Scams

We’ve seen several types of college scams over the years (I’ll cover some of them below), but the latest wave is even more creative. According to the Chronicle of Higher Education’s tech blog, one clever scam tried to use college students’ guilt–and fear of their parents–against them.

In September, hundreds of University of Bucknell students received letters from a legitimate collections agency, through which a scam artist had sent correspondence. The letters claimed that each of the 300 students had illegally downloaded material and requested credit card numbers to pay $500 that would allegedly settle their accounts.

The scammer, it seems, was hoping that students guilty of downloading illegal music, media and textbooks would cough up the money before the news got to their parents.  Luckily many students became suspicious. Further investigation by the collections agency itself revealed that the company demanding payment was “out of business” and could provide no proof that any of the students had downloaded illegal content!

Oldies but Goodies

Even as new scams come on the radar, the old ones are still widely circulated. A few of the most popular college-student scams are as follows:

  • Scholarship Scams. Fake scholarships pop up all the time, asking students for a small fee to process their application. Students willingly pay, hoping to get a great award.  The scammers cash out and don’t award money to anyone.
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  • Fake Seminars. Families get invited to a “seminar” that promises to help them figure out their college funding options. Instead they end up with an hour long sales pitch–and high pressure to purchase an expensive service that many times falls short of delivering what’s promised.
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  • “Free” Grants. Students get a “free check” for a grant they never applied for–with instructions to cash it and send part of the money back as a “processing fee.” Needless to say, the scammer gets away with the “fees” students pay back, and the students lose their fake grants to check fraud.
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  • Fake “Federal” Loans. This type of scam continues to make the rounds–private student loan lenders send out letters with official government-looking seals and official sounding company names that offer loans to students. Students enter into a loan agreement with the lender, thinking they are getting the low rate and terms of a federal loan, but instead end up with a less-competitive non-federal private loan.

Protecting Your Student

Education is the first step to protecting your child; here is what else you need to know.

  1. Don’t Pay for Scholarships and Grants. Scholarships and grants are meant to help students pay for college with free funds that don’t need to be paid back. Steer clear of any scholarship or grant that asks for a “processing fee” or “holding fee”–even if they are legitimate, you can find dozens (or more) of scholarships that won’t cost a penny to apply.
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  2. Be a Savvy Borrower. Federal student loans are available all year, and the Department of Education will never send you a letter pressuring you to borrow. If you need to borrow student loans, do your research first. Understand the types of loans available, and where to get them. Your student’s financial aid office is a great place to start if you have questions.
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  3. Teach Your Child Identity Protection. It’s hard to know who to trust these days, especially online. Teach your student to be careful of giving out credit card information, drivers license numbers, social security information or any other information that would be personally identifiable. Talk about when this information might be required (getting a cell phone, signing a car loan, renting an apartment, etc.) and explain that your student should be wary if asked for this information in other situations.

All the best,
Deborah Fox

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