August is here and college students and their parents, are caught up in a frenzy of preparations making them more likely to fall victim to scams. Here at CTFCU, our biggest priority is the financial wellness of our members, and that includes keeping them and their money safe. To ensure member safety, we put together this series to help you recognize the signs of fraud and ways to protect yourself.
The tuition fee scam
Tuition scams are usually prevalent right before the start of the term. A caller claiming to be a secretary or administrator will say that there is an outstanding tuition balance, and the student will not be allowed to return to school for the upcoming semester unless the fees are paid. In other scenarios, the caller may claim that the student’s grant or scholarship was abruptly canceled and they are now being billed for the full tuition fee. The caller will insist on being paid the outstanding sum immediately or the student will lose their spot in the school and will provide the victim with detailed information for wiring money or dropping off the cash at a private address. Once the money is sent, it will never be seen again.
If you receive a call like the one described above, ask the caller detailed questions about the school, their position, and the money owed. If it’s a scam, the caller will not be able to answer well. You can also explain that you need to see the actual bill before making any payments and that you’d like to pick up the bill yourself from the school. Finally, you can insist on calling the school directly to make the payment.
The income tax scam
Similarly to income tax scams, someone allegedly representing the IRS calls a college student at a public university and claims they neglected to pay their income tax. The caller explains that failure to pay this tax can result in the inability to register for classes and possible imprisonment. They will insist on immediate payment via prepaid gift card or wire transfer.
Remember that the IRS will not ask to be paid through a gift card or wire transfer. If someone calls and requests payment for unpaid taxes, hang up immediately and call the IRS directly.
The scholarship scam
A scammer reaches out to a college student telling them they’ve received a scholarship or grant, but to receive these funds, the student must first pay a large fee. Once the fee has been paid, all communications cease, and the scholarship/grant disappears.
In a similar scam, a victim is instructed to pay a fee to a company that will “file” a Free Application for Federal Student Aid (FAFSA) form in their name. Of course, no FAFSA form will be filed, and the student will never see the money paid for this “service” again.
Student scholarships and grants are designed to help students and their parents pay for education and they don’t charge for eligibility. If an alleged scholarship claims to charge a fee before approving, it is most certainly a scam. Also, companies cannot guarantee approval for a scholarship or grant as qualifications must be met before eligibility is determined. Finally, filing your FAFSA is free; it can be completed easily online here. For additional help, college students can contact the financial aid office at their university.
Scams targeting college students and their parents tend to peak before the start of the school year. It is important to look for red flags when searching for scholarships and when receiving phone calls in regards to payments. If you are the target of a scam, report the incident to the Federal Trade Commission (FTC).