Can You Recognize a Financial Aid Scam?

Melissa Maichle .

Financial literacy

You receive a phone call, and don’t recognize the number. Should you answer, or is it another relentless spam call; those annoying phone calls that claim you won a prize, make false promises about student loan forgiveness, or demand payment and threaten you?  Or, you receive an email that appears to come from a colleague and open it. After you’ve opened it, you realize it was a “phishing” email and may have infected your institution’s network. Even experienced professionals can fall prey to these scams, so it’s no wonder college students who will be beginning a new chapter in their lives, can get caught up in them too. They have new responsibilities, and the liberty to make independent decisions. Since these young adults are the focus of scams, it’s imperative that students and families be made aware of the need to be vigilant.

The announcement by the federal government to reinstate student loan payments has resulted in borrowers receiving an uptick in spam calls that make false promises on lowering their payment or loan forgiveness. The Federal Trade Commission (FTC) reports scammers have deceived borrowers into enrolling in their fraudulent student debt relief program by posing as the U.S. Department of Education and using the term “Biden Loan Forgiveness” or a name like it, which borrowers have come to recognize as the Biden-Harris Administration’s Student Loan Debt Relief Plan. According to the FTC, scammers received almost $8.8 million in fees last year in exchange for nonexistent student loan debt relief services. The fees were received from borrowers, along with their bank account, debit card, or credit card information.

The U.S. Department of Education reports that ransomware and other incidents affect three institutions of higher education every day. Determining if your institution is equipped to manage a potential breach is important. Entry points for cybersecurity breaches change daily. Therefore, recognizing cybersecurity weaknesses in virtual instruction and hybrid work schedules is critical. It’s important for institutions to identify potential entry points and develop processes to secure their networks. Common entry points for threats and potential fraud (official looking emails, unsecured Wi-Fi, etc.) can be minimized with routine updates to software, password changes, and preserving data daily to protect student information.

Incorporating a privacy awareness section in your student’s financial literacy course is important to inform your students of potential scams. A few tips you can include are to verify the request for information with the school before providing personally identifiable information if they are unsure of the source, complete financial aid forms and submit tuition payments on the correct website and to never release personal information to someone who contacts them unexpectedly. Emphasize that they should do the research and verify the source.

Educating your staff and students about how to protect themselves to combat fraud is vital. Collaborate with your IT team to develop a monthly newsletter to inform readers of potential cybersecurity entry points, scams and phishing emails. Working together to inform staff and students will keep you vigilant in the fight against cybercriminals. Together, we can stop them! Check out our interim staffing solutions at or email to speak with one of our regulatory experts.

Sources: Student Loan and Education Scams | Consumer Advice (, Cybersecurity Resources – Office of Educational Technology, Beware of Scams targeting College and Graduate Students – PA Office of Attorney General