Financial Aid Phishing Scams Continue to Proliferate

Phishing scams continue to occur at an elevated level in 2026. According to data published by the Anti-Phishing Working Group (APWG), phishing attacks rose 13.8% in early 2026. Threats abound on social media platforms. Scams and impersonations account for nearly 44% of all threats people face.

On April 30, Microsoft Threat Intelligence published a detailed blog addressing some of the most common email threats users face daily. QR code phishing represents the most rapid escalation of phishing threats to the public. In Q1 2026, QR code phishing attack volume rose from 7.6 million in January to 18.7 million in March, signifying a 146% increase over the quarter.

Despite companies’ enhanced training for employees and customers they serve, phishing attacks remain a significant cybersecurity concern. In the financial aid arena, phishing attacks continue to run unabated against unsuspecting students. There are four types of phishing attacks financial aid recipients should be aware of as 2026 progresses in the second half of the year: Account Takeovers, FSA ID Harvesting, Fake Scholarships and Grants Scam, and Ghost Student Fraud.

Account Takeovers

Students and college employees should be well-protected against this phishing scam, which can have catastrophic consequences for all parties involved. An account takeover phishing scam works like this: Scammers attempt to access a student’s direct deposit information by claiming they are either their school’s financial aid representative or a financial aid disbursement servicer. Once the scammer gains the student’s trust, they feign a crisis with the student’s financial aid disbursement, claiming their direct deposit information is incorrect in the system and that funds will not be transferred to the student’s bank account. Students then complete a form detailing their financial institution information, including the most sensitive data points: the student’s name, routing number, and bank account number.

The scammer will typically send a student to a fictitious portal where they can enter all this information and other details related to their student accounts at the college. Once the scammer has all your information, they quickly access your student account and update your direct deposit information to the scammer’s financial institution.

Students who fall prey to this scam don’t realize they’re a victim until their financial aid disbursement has passed and it hasn’t appeared in their bank account. By the time the school realizes the error, along with the student, the scammer is long gone with the absconded funds.

To avoid becoming a victim of this simple yet malicious scam, students should never click any suspicious links that ask them to submit their college account information. Students should never share their bank account information with anyone. If you receive a request about updating your bank account information for your financial aid disbursement direct deposit, stop communicating with that individual and call your school’s bursar’s office to confirm if the request is valid. Institutions of higher education follow red flag laws to prevent unscrupulous individuals from engaging in money laundering. Remember: schools typically have a secure process in place to prevent this unfortunate scenario. It is your responsibility not to provide personally identifiable information to unknown entities.

FSA ID Credential Harvesting

Regular people tend to view the term ‘harvesting’ in a positive light. Our first thoughts are likely to be about the fall, when farmers reap the rewards of a long growing season. On the internet, however, harvesting is a real threat to the security of your financial aid accounts.

The next phishing scam involves your Federal Student Aid (FSA) ID on www.studentaid.gov. Your FSA ID is one of the most important financial aid accounts throughout your tenure as a student. Here is how this scam operates: Swindlers pretend to be representatives of the Department of Education and pose as expert “FAFSA helpers.” Their claim to fame? “We can help you expedite your FAFSA application or get you better FAFSA results.” Students should immediately view these dubious claims as red flags.

To facilitate the sophisticated scam, scammers will need your FSA ID credentials to access your FAFSA form. Students who falsely believe the scammers give this information to the swindlers, who immediately lock the student out of their FSA accounts by changing the emails, passwords, and phone numbers associated with the account. Once this happens, the scammer will use the FSA ID to submit falsified FAFSAs to target schools to obtain fraudulent financial aid refunds. Another area of concern in this scam is the amount of personally identifiable information scammers obtain in this phishing episode, including your full legal name, date of birth, and Social Security number.

To combat this phishing scam, students should never engage with outside entities for FAFSA assistance. All colleges and universities offer free FAFSA assistance to prospective students. In addition, the federal government offers FAFSA assistance through its www.studentaid.gov website and its call center. As a friendly reminder, federal law prohibits anyone from charging another person for assisting with completing their FAFSA form. Like the first scam, remember this guiding principle: never, and I mean never, give out your FSA ID credentials to anyone.

Fake Scholarship and Grants Scam

The Financial Aid Office Newsletter previously highlighted this scam late last year. The premise of this scam is simple (like most scams): Students receive a random text, email, or social media post congratulating them on winning a scholarship they never heard of or never applied to. The scammer alerts the student that they need to complete a “few forms” before the funding is released to their personal bank account.

To receive the funding, students must pay the defrauder an “upfront fee” to release the scholarship or grant funds. Fraudsters prefer untraceable payment methods, such as gift cards, cash, wire transfers, or even cryptocurrency. After receiving payment from the individual, the scammer disappears before the student realizes they are a victim of this predatory scheme.

Students should note three things about this scam. First, when in doubt about the veracity of a scholarship opportunity, consult with your school’s financial aid office to determine if the entity is a reputable organization. Second, no legitimate scholarship or grant organization requires you to make an upfront fee. If they do, run away and cut off all communications with the entity. Finally, avoid giving away personally identifiable information to scammers, who may attempt to target you with more intricate scams involving your personal finances.

Ghost Student Fraud

Perhaps the biggest financial aid fraud in 2026 involves real students who are fictitious. Ghost student fraud is one of the more challenging phishing scams affecting students, schools, and the federal government. Unlike the other scams outlined in this article, which are typically carried out by a few individuals, ghost student fraud is a systemic, highly coordinated fraud ring targeting students across the United States.

Using stolen identities from previous phishing attacks or the dark web, highly organized cybercriminals apply to colleges and universities with the intent of using the victim’s stolen information to receive an illegitimate (and unauthorized) financial aid disbursement. Before the school or the actual student realizes they were victims of this scam, the culprits are long gone with the money. Community colleges and smaller schools are more susceptible to this scam, according to the Department of Education.

To combat this growing fraud ring, the Department of Education enacted several measures to deter ghost students. The FAFSA was recently updated to include real-time fraud detection tools to identify suspicious applications. Title IV institutions are noticing an uptick in financial aid applicants who need to complete identity verification before finalizing financial aid packaging. Schools are cautiously reviewing financial aid applicants for tell-tale signs of suspected financial aid fraud.

While the Department of Education and Title IV institutions are working concurrently to stop this trend from spreading further, students can play an outsized role by periodically reviewing their FSA ID accounts for suspicious activity. Students who suspect a data breach with their FSA ID should immediately alert FSA and their school.

While phishing threats abound, we all can play a role in stopping cybercriminals. Safeguard your credentials and do not share them with unauthorized individuals. If an email or social media post appears too good to be true, then it’s likely to be a sort of scam. Never pay anyone for FAFSA assistance or for releasing gift aid to your bank account. Following these simple steps can save you from a whirlwind of emotional and financial pain.