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Education/Scholarship Scams

Scammers find ways to take advantage of those trying to further their education. Learn about the different scams out there that target students.

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The Basics of Education & Scholarship Scams

There are many scams out there that target people who are trying to get an education. Some of these scams involve promising free or low-cost scholarships, but then requiring the student to pay an upfront fee. Others may involve fake online schools that claim to be accredited but aren’t or promise degrees for little to no work. These education scams and scholarship scams can take many different forms, but they all have one goal in mind: to steal your money or personal information.

3 Common Tactics Used by Education and Scholarship Scammers

There are several common tactics that scammers use to trick people who are looking to further their education into giving them money or personal information, such as:

  • Posing as a legitimate organization. Scammers will create a fake website or email address that looks very similar to a legitimate organization, such as a scholarship provider or college. They may even use the same logo or branding.
  • Offering guaranteed scholarships for a fee. Scammers will contact students directly and try to convince them to pay an “application fee” or “processing fee” in order to receive the scholarship.
  • Claiming to be able to provide students with a legitimate diploma or degree, without the student having to actually attend any classes or do any coursework.
Common Types of Education Scams
  • Fake Scholarship Scams: Scammers will trick people into applying for the nonexistent scholarship. Other times, scammers will contact students directly and try to convince them to pay a fee to apply for the scholarship.
  • Student Loan Scams: Some scammers will set up fake websites that look like they’re from a legitimate lender, in order to get students to apply for a loan through them. Other times, scammers will contact students directly and try to convince them to pay an “advance fee” in order to apply for a loan.
  • Federal Loan Forgiveness Scams: These scams can promise to forgive all or part of your student loans, but they may end up leaving you in more debt than before. They may also require you to make payments to them, rather than to your loan servicer.
  • Diploma Mills: These companies claim to be able to provide students with a legitimate diploma or degree, without attending any classes or doing any coursework.

Step 1:Recognize

Red Flags of Education and Scholarship Scams

If you are contacted about a scholarship or educational opportunity, there are some red flags to look for that may indicate that you are being scammed, such as:

  • The scammer offers you a guaranteed or near-guaranteed scholarship for a fee.
  • You have to pay an upfront fee or buy something in order to enter for a scholarship.
  • They request unusual payment methods, such as gift cards or wire transfers.
  • You’re asked to provide sensitive personal information like your social security number or bank account information. Legitimate colleges or scholarships will not require this information up front.
  • They promise guaranteed results like getting a job or making a certain salary after completing their program.
  • The company claims to be able to provide you with a legitimate diploma or degree, without having to attend any classes or do any coursework.
  • They try to rush you into making a decision before you have time to think about it or do your research.
  • Their communication includes poor grammar and spelling errors.

Step 2:Immediate Actions

If you are the victim of an education scam, don’t despair. There are steps you can take to protect yourself and your finances. By taking action quickly and being proactive, you can minimize the damage caused by these scams. Here are some steps to take if you think you have been scammed:

  • Keep all documentation related to the scam, including any emails, letters, or receipts. This will be helpful if you file a police report or take legal action against the scammer.
  • If you provided financial information, like your credit card number or bank account information, contact your bank or credit card company. This will help stop the scammer from accessing your accounts and using your information to make additional purchases.
  • If you sent funds via gift card or money transfer, report the scam to the issuer. They might be able to help you stop the transaction. Find their contact information by visiting their legitimate website.
  • If you provided personal information, like your Social Security number, you may be at risk for identity theft. Contact the three major credit reporting agencies – Experian, TransUnion, and Equifax – and place a fraud alert on your credit reports. This will make it harder for the scammer to open new accounts in your name.
  • If you experienced a scam related to scholarships or financial aid, contact your loan servicer directly and let them know what happened.
  • Tell your friends and family about what happened so they can be on the lookout for similar scams.

Step 3:Report

Reporting any type of cybercrime, including education scams, is imperative to help others avoid being scammed. As a society, the more people that report online scams and fraud, the more national reporting data that is collected, and the better chance law enforcement has to catch the criminals and decrease cybercrime.

Report to FBI

Step 4:Recover

Learn the Three Golden Rules to Spot a Scam

Scammers often utilize tactics to encourage you to act quickly and will use false information to persuade you to send money or personally identifiable information (PII). When faced with a questionable situation online, always follow the three golden rules to spot a scam:

Slow it down — Scammers often create a sense of urgency, telling you that you need to act now or you will miss out on the opportunity. Take your time, ask questions and do your research to avoid being rushed into a bad situation.

Spot check — Do your research to double check that the organization contacting you is who they say they are. Conduct an internet search by looking up the organization who contacted you followed by words like “scam” or “complaint.”

Stop! Don’t send — Scammers will try to steal your money by rushing you into paying with unconventional payment methods like gift cards or wire transfers. If they insist you pay in the form of gift cards or by wire transfer, it’s a scam.

Take 5 Steps for Better Online Security

Along with making sure you follow the three golden rules to spot a scam, it’s important to strengthen your online security to help avoid all types of online scams. Take action to improve your digital posture by following these steps:

  1. Implement Multi Factor Authentication (MFA): Passwords are generally easy for scammers to crack, and even if you use strong passphrases, there’s still the possibility that a cybercriminal can obtain your passphrase in a data breach. Implementing MFA is a great way to maximize your security and ensure that you are the only one who can gain access to your accounts. MFA should be implemented on all accounts where it is available. Check your account’s security settings to see if it is something you can set up.
  2. Update Your Privacy Settings: Privacy settings allow you to control your personal information (name, address, phone number, date of birth, financial details, photos or videos, etc) and how that information is used. Review your privacy settings on all of your accounts including your social media accounts. Consider restricting who can see your friends list, contacts, photos and posts.
  3. Activate Automatic Updates: Automatic updates are a set of changes to an app, software or operating system that are automatically pushed by the developer to fix or improve it. Oftentimes, cybercriminals take advantage of security flaws to plant malicious software on your devices. By activating automatic updates, you will automatically patch security vulnerabilities to protect your data.
  4. Use a Password Manager or Create Strong Passphrases: A password manager is a software tool that securely stores all of your login credentials in one place, allowing you to create and manage strong, unique passwords for all of your accounts. If you are unable to afford a password manager, use strong passphrases. A passphrase is a combination of random words or a sentence that is much longer and more complex than a typical password. Using a passphrase instead of a password makes it much harder for hackers to guess or brute-force their way into your accounts.
  5. Learn the Elements of a Phishing Attempt: Familiarize yourself with the elements of a phishing email. Phishing emails tend to include a sense of urgency and multiple grammar and spelling errors. If they are asking you to reveal personal information, be suspicious. If you get a strange email, try contacting the company another way to confirm they sent that email. If the email is suspicious, mark it as spam.

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