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5 ways to protect against escalating tuition fraud

eCampus News – By Peter Butterfield

Tips for institutions and student on how to protect against higher ed cyber crime via international tuition fraud.

It’s college tuition payment season—a stressful time for families, students and institutions. This year, that process has been especially stressful for international students who have been the targets of some unfortunate financial scams.

Like any form of payment, tuition is subject to cyber-crime. And because of the large size of tuition payments, they can be appealing targets for hackers. Foreign students are popular targets because they might be making a cross-border international tuition payment for the first time and are dealing with lots of unknowns as they prepare to attend school in a new country, adjust to a different culture away from home (possibly for the first time), and possibly converse in a non-native language.

And the US, Europe and Australia are the leading destinations for international higher education. There are approximately 975,000 international students in the US alone paying over $14 billion in tuition. Another 600,000 + spend $9.5 billion in Europe and Australia. Most of these students pay full fare making them even more attractive to schools–and to scammers.

All-Too-Real Examples

A recent scam targeting Chinese students was revealed at the University of Washington in Seattle. According to authorities, between 80 to 90 students were defrauded of tuition funds with losses potentially totaling approximately $1 million. A similar scam targeting Asian students happened at Michigan State University around the same time.

Posing as payment company representatives, the scammers offer students a 5 percent discount on their tuition and get students to provide their school login credentials. The scammers then make the tuition payment to the student’s account using a stolen credit card number. When the student receives confirmation from the school that his or her tuition has been paid, the scammer requests reimbursement from the student for the discounted amount by check or wire transfer. By the time the fraudulent tuition payment gets rejected and reversed, the scammers are long gone with the student’s money.

Another ruse targeted at universities involves individuals posing as students with fake identification and making tuition payments with stolen credit cards. They then inform the school that they have decided to un-enroll and request a refund by check. This is a common ploy that has snagged many universities and staffers in recent years.

Another situation that has schools alarmed is shady operators positioning themselves as the “unofficial tuition payment processor” for a group of foreign students from the same country. These legal operators, working locally in the students’ home country, gather legitimate tuition payments from a group of students attending a specific university and approach the school promising to release the funds for a marked-up fee. The schools have little choice but to agree to the terms in the interest of their students and themselves.

5 Steps to Minimize Tuition Fraud Risk

All these situations are highly problematic for the students who lose money, the universities they put their trust in, as well as those companies like ours that promise swift and secure cross-border tuition payments. But there are some common-sense steps we can all take to minimize the risk for all involved.

For institutions:
• Be very clear and proactive about communicating to students, especially foreign students, about what official payment channels exist and how to access them. If you have a preferred channel, make it very obvious. That will eliminate some guesswork for students and their families and put them at ease when it comes time to make the tuition payment.
• Any business should be cautious when someone pays through one method and requests a refund through another. Especially if it’s within a very short timeframe. At Flywire, we advise our schools that if the payment was processed by us, it needs to be refunded through us as well.

For students:
• Students should only use school authorized payment methods. If that method is not clear, reach out to the university and ask them what their preferred method is. Typically this can be found and accessed on the school’s website.
• There are many companies advertising to help international students with school-related services, but if they do not have an official relationship with the institution, beware. If there is any doubt, check with the schools before engaging in any agreement or transaction.
• Be very wary of any person or organization offering a discount on tuition. Always check with the university before agreeing to process a payment through any third party that is not directly affiliated with the school, or not visible on the school’s payment website.

Where there is money, there is usually some level of fraud, but with some common sense, colleges and students can protect one another from being victims.

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