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It’s soon to be a new year, which means new (and tried and true) higher education payment scams will be targeting institutions. The industry has experienced an uptick in fraud over the past several years. In 2021, for example, California received more than 65,000 fake financial aid applications within the community college system. One college managed to identify and block roughly $1.7 million worth of student aid fraud

Addressing higher education payment scams is a necessity, but where do you start? The types of scams and fraud run the gamut and often include some element of impersonation. Fraudsters may pose as university officials or even students. And fraud is perpetrated across channels, including email, social media, phone, and more. 

We’ll explore some types of higher education payment scams centered around card fraud so you know what to look for. 

Types of Higher Education Payment Scams


Phishing occurs when a bad actor sends communications in an attempt to steal sensitive information. This could happen over text, email, or even instant messaging and often appears like a legitimate request. 

Identifying phishing scams requires a keen eye. Look out for emails with odd-looking sender email addresses or impersonal attributes in the copy (e.g. “Dear Student” rather than “Dear {First Name}”). Do some digging to verify that the communication is real and any domains match up with what should be expected. 

Card Payment Fraud

As far as higher education payment scams go, card payment fraud is prevalent. This happens when stolen or compromised card details (often attained via phishing scams) are used to make unauthorized online purchases. 

Once fraudsters can attain sensitive card data, they may attempt to use it in a non-in-person setting, usually online or sometimes over the phone. Since they don’t need to present the physical card, they can easily submit stolen data to make purchases. 

Impersonation Fraud

Impersonation fraud is gaining momentum as digital tools make it easier than ever to replicate letterhead and other “official” signifiers. With this scam, bad actors may pose as vendors of a university and request updates to banking details or payment methods. If successful, they can funnel money into unauthorized accounts. 

Another type of impersonation fraud happens when bad actors use ill-gotten sensitive information to apply for financial products or loans. Again, sensitive information is often obtained from phishing or other social engineering scams. 

Tips for Avoiding Higher Education Payment Scams 

What is a college or university to do? There are several ways to avoid falling victim to (and to protect your students, staff, and partners from) scams that target higher education institutions. 

Offer a streamlined tuition payment experience: Offering a clean, seamless payment experience for students should be a priority, but this goes further than a simple matter of convenience. Offering a well-designed, UX-friendly payment portal that uses encryption and MFA can instill confidence in students and parents when making payments. 

Train and educate students, faculty, and staff: Keeping everyone apprised of the latest scams is not just helpful to them, it’s helpful to the institution. All it takes is one wrong click to compromise an entire network. Offer free training for students and mandatory training for staff to educate people on common fraud tactics and what steps they should take. 

Pay attention: Be on the lookout for suspicious cues that something is awry. Urge staff to use caution when clicking on links and opening emails from unknown sources. A sense of urgency in communications can be another red flag that a fraud attempt may be occurring. 

Higher education payment scams come in all shapes and sizes. The best defense is a good offense, so work with IT and risk management teams to have security frameworks and protocols in place. 

If you’d like to work with a team of payments security experts, contact Arrow Payments today. We’ve worked with many higher education institutions to help them create safer, more secure payments experiences across departments and campuses.

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