Student Loan Fraud: How to Spot Scams and Protect Yourself

Student loan fraud is when someone lies, steals information, or uses fake offers to take money or loans meant for students. It can be identity theft, fake lenders, scholarship scams, or bogus loan forgiveness schemes. Scammers target students because many are new to loans and pressed for money. Knowing the signs and steps to act fast can stop a small problem from becoming a big one.

How can you tell a scam? Real lenders do not ask for payments before a loan is approved. They use clear contracts, official emails, and verifiable phone numbers. Red flags include urgent requests, promises of guaranteed approval, poor grammar in messages, and unknown payment portals. If someone asks for your bank PIN, full password, or to pay via a gift card or cryptocurrency, hang up and block them.

Practical steps to protect your info

Before applying for any loan, check the lender. Use government or university lists of approved lenders and read reviews. Use secure Wi‑Fi and avoid public networks when sharing personal documents. Create strong passwords, enable two‑factor authentication, and never share verification codes. If an offer sounds too good, it probably is.

What to do if you’re targeted or scammed

Act quickly. Contact your loan servicer or the university financial aid office to confirm any accounts or offers. Freeze your bank card and report suspicious charges to your bank. Change passwords on email and financial accounts. File a police report and get a copy for proof. In South Africa, report NSFAS fraud to NSFAS and file complaints with the National Prosecuting Authority or the South African Police Service. You can also report to the National Credit Regulator and credit bureaus like TransUnion or Experian if your credit is affected.

For other African countries, contact your education ministry, anti‑corruption agency, or central bank. Many universities have fraud hotlines and student support services that help with paperwork and recovery steps. Keep all emails, screenshots, and transaction receipts. These records matter when banks, universities, or law enforcement investigate.

How to check your loan status and credit record? Ask your loan servicer for a full statement of any loans in your name. Request your credit report from local credit bureaus. Look for unknown accounts, missed payments you didn’t make, or loans you never applied for. If you find errors, file a dispute with the credit bureau and follow up in writing.

Staying aware is your best defense. Teach friends and family what scams look like and share trusted resources from your school. If you ever feel unsure, call your university’s financial aid office first. A quick check can save months of stress and protect your future.

If you're a parent or guardian, monitor applications, set alerts, and teach young adults to never sign documents without reading them. Schools and loan officers should provide contact points. If a large number of students are affected, organise a group complaint to speed up investigations and force institutions to act.