A nonprofit publication of the Kentucky Center for Public Service Journalism

BBB Trends: College students should avoid these hard lessons — scammers are on the prowl

By Sandra Guile
Better Business Bureau

Whether it’s the first year or the final year of college, life before the beginning of the school year is busy for students. There’s setting up class schedules, making sure course credits are accounted for, and getting all of the course materials together before classes start. There is little time to deal with a scam but plenty of opportunities for a scammer to strike if a student is not paying attention.

There are three different schemes scammers will use, the Federal Student Tax scheme, the free government grant scheme, and the scholarship scheme. These scams are carried out by email or a phone call and all have the same motive – stealing money or personal information from college students.

Students Walking Outdoors On University Campus

Students Walking Outdoors On University Campus

The first scheme college students should be aware of is the Federal Student Tax. It works the same way the fake IRS calls work; a scammer calls the victim and claims that the victim is in trouble with the government and owes a considerable amount of debt. The only difference with this scam is the caller will try to convince the victim a Federal Student Tax is due immediately and payable with some form of prepayment. The reality is there isn’t a Federal Student Tax.

Another variation of this scam is the caller will claim to be with the FBI and threaten the student to pay up immediately on student debt, parking tickets, or delinquent taxes. The excuses are creative, but the intent behind the scam is the same – pressure the victim for money or some form of personal information.

The next scam college students should be aware of is the false government grant. They are told they’re the recipient of a grant to put toward education costs. To sweeten the deal, the scammer tells them they don’t have to pay it back. However, the only way the money can be claimed is if the student agrees to cover a processing fee or some other fines that are typically not associated with a grant. Unless a student actively pursues a grant application through an established institution, they won’t be contacted by a government agency claiming to give them a free grant. It just doesn’t happen.

The third scheme involves scholarship applications. College expenses increase each year and students are looking for the best possible way to manage costs. Unfortunately, scammers have found a way to create fraudulent forms, websites, and marketing materials making claims to have ways to finance the cost of higher education at a minimal or no cost. Sources such as finaid.org state many scams encourage applicants to send money upfront for the scholarship but provide little to nothing in exchange.

What typically happens when the applicant believes they didn’t get the grant, they’ll accept the loss of money and assume it’s something everyone goes through. What’s important to note, the fraudster behind the scholarship scheme now has the student’s information plus the cash that was paid to complete the bogus forms. Sending in money to apply for a scholarship is not typical, and any student asked to do so should be wary.

It’s a challenging environment to be a college student, and the last thing anyone needs between exams, labs, homework and classes is the stress that comes from losing money or recovering from identity theft. When in doubt, use bbb.org as a resource to check out scholarship opportunities, check out the origin of a grant or use BBB’s Scam Tracker to report scholarship scams.


Sandra Guile is the Community Outreach Specialist for BBB. She promotes BBB’s message of marketplace ethics through public speaking engagements, presentations, media relations, press releases, web content, and other written materials. Contact her at (513) 639-9126 or sguile@cincinnati.bbb.org. Your BBB is located at 1 East 4th Street Suite 600 Cincinnati, Ohio 45202 – to reach the office, call (513) 421-3015.

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