College scam alert: Student loan scams and other common student scams to be aware of

College is a thrilling adventure — but managing a tight budget while pursuing a degree can leave students vulnerable to scams. Discover how to spot them and safeguard your money and identity

You start college ready to embrace all the possibilities and challenges that come with it. You likely secure student loans and arm your trusty smartphone with any apps that could help you on your journey. You increase your social media presence. You meet people. You’re in charge of your life. But unfortunately, there are scammers out there who are looking for opportunities to take advantage of students just like you.

Their actions appear in many forms: You may be approached in public or contacted by email, phone, mail or social media. Whatever the chosen method, reviewing these common scams can help you recognize the stunts and protect yourself accordingly.

It’s no secret that getting a college degree can be expensive. For many, paying for it will involve a mix of loans, scholarships and grants, which can require completing a mountain of paperwork. As college students go through these various application processes, they need to be on the lookout for student aid scams.

Applying for and managing financial aid and loans can be confusing, emotional and downright overwhelming. “This leaves the door open for scammers to jump in and say they can solve your problems, even when they can’t,” says Mark Kantrowitz, a nationally recognized student loan expert, author of five bestselling books and editorial board member of the Journal of Student Financial Aid.

The legal issues surrounding the federal government’s plan for student loan forgiveness offer another opportunity for scammers to target students and their families. “Borrowers hear about forgiveness in the news, but they haven’t been able to access it,” Kantrowitz says. This makes people more susceptible to scammers offering to help. 

Two of the most common scams related to financial aid and student loans include:

• Scholarship and grant scams. For these types of scams, you may receive a phone call, email, letter or text from someone claiming to be from the Department of Education, a university or a charitable organization. They happily reveal you’ve received a scholarship or grant, even if you didn’t apply for one, and ask you to pay a “processing fee.” In another version of this scam, a fraudster contacts you and pressures you to apply for a guaranteed scholarship or grant — all you have to do is pay an application fee.
• Payment relief scams. In these cases, “scam companies promise students loan forgiveness, reduced loan payments or other forms of financial relief in exchange for some kind of up-front payment,” Kantrowitz says. Many just take the money and run, but others insist that you send the “debt relief company” monthly payments — assuring you they’ll give that money to your servicers each month when your bill is due. 

If you’re in need of help or official information when it comes to student aid, go to the Department of Education’s Federal Student Aid website. You may also want to reach out to your loan servicer to verify whether a communication you receive is legitimate or not. 

In 2023 alone, the Federal Trade Commission (FTC) recorded nearly 110,000 business and job scams, which cost victims more than $500 million. And 2024 has already been even more expensive, with a total loss of $514 million as of September. 

These scams often promise a job with high pay, remote work options and/or flexible hours. But the job offer isn’t real, and the job being promoted probably doesn’t exist. The scammer simply wants the candidate to complete and return forms that require personal information, which could then lead to identity theft. The scammer may also ask the candidate (as a prerequisite for the job) to purchase job-related equipment with money from a fake check sent by the fraudulent company. Once that check is deposited, the con artist asks you to return part of the funds — thereby stealing your money and gaining your bank account information from the transfer.

This kind of scam crops up in a variety of situations, not just employment-related schemes. Generally, the fraudster will send you a bogus check, claiming that it’s a partial refund for a purchase you made, a sweepstakes prize, a bonus for a job you did, a salary advance or something else entirely. 

In every case, the goal is the same. The scammer will follow up saying either that the check they sent you is a mistake, that they gave you too much money or that you need to pay taxes on the funds. Therefore, you need to reimburse them. To do this, they’ll tell you to deposit the check in your bank account and wire them the money. Alternatively, they may request that you return the money via a gift card.

The check appears real and clears, so you do what you’re told. But weeks later, the bank discovers the check is phony, and now you owe the bank the funds you transferred to the scammer. 

This scam — in which young adults tend to be targeted the most — starts with a promise of easy money. All you have to do? Give the person your debit card number, PIN and online credentials. They will deposit a check in your account (it’s fraudulent, of course, but you don’t know this) and then withdraw that money and give you a portion. Bonus: They explain you can call your bank, report an ATM “breach” and be reimbursed for the stolen funds.

Once the bank discovers the check is fake, you’re on the hook for the full withdrawal. Oh, and the entire scheme is illegal, so you may be criminally liable. 

Online shopping fraud is the second most common type of scam reported to the FTC. This occurs when you make a purchase online from an individual seller or unfamiliar company, but the item never arrives or you receive the wrong item. Social media plays a big role, as fake brands and businesses can use platforms like Facebook, Instagram, TikTok and Pinterest to advertise their “products” and promote mock websites. AI-generated images of products for sale are also becoming more common — making it harder to know the difference between what’s real and what’s fake. 

Crooks will sometimes create QR codes that link to harmful websites or install malware on your devices. A common method for tricking students is to cover up legitimate codes at places you’d expect to find them (think parking meters, public transportation ticket machines and stores) with fake ones. QR codes can also be distributed digitally, so keep an eye out for anyone who says they need you to confirm information or reschedule a delivery via a QR code.  

How do you recognize false codes? For one, be suspicious of unsolicited QR codes, especially from people you don’t know. And review the URL that pops up on your phone before clicking on the link. 

In a nationwide survey of college students, 15 percent of respondents reported encountering an online rental scam, and 98 percent of them lost money as a result. Any time you come across a perfect, affordable apartment close to campus, proceed with caution. It could be that the apartment doesn’t exist or that the person posing as the landlord doesn’t own the place that’s listed. If the scammer rushes you to pay an application fee, make a deposit or pay the first month’s rent — often without even seeing the property — that’s a red flag.  

In 2023, consumers lost a total of $1.18 billion to romance scams, according to the FTC, with a median loss of $1,928 per person. With a romance scam, the fraudster connects with a student through a dating app or social media platform and tricks them into believing that a romantic relationship is developing. Once a so-called bond has been formed, the scammer asks their new “friend” or “lover” to lend them money or share personal account information — often playing on their victim’s emotions and desire for a true connection.

In addition to these typical romance scams, LGBTQ+ students should also be aware of potential extortion scams on dating apps, where the scammer threatens to share information about their orientation or romantic life with friends, colleagues, teachers and family.