Student loan scammers: University students urged to be vigilant - after millions almost lost to 'smishing'

• Scammers often target university students this time of year, to try and steal their first maintenance loan payment.
• Text-based scams are the most common type now - a practice known as ‘smishing’.
• Last year the Student Loans Company was able to stop nearly £3 million ending up in the hands of scammers.

Millions of pounds worth of student loan payments were saved from scammers last year, with providers urging students to be on the lookout for text-based ‘smishing’ scams.

This year’s brand new ‘freshers’ will be heading off to join their university counterparts on campuses across the UK over the next couple of weeks, for orientation week events ahead of the 2024/25 academic year. Many who are receiving a maintenance loan - which helps with living expenses and course-related costs - will also be getting their first big instalment paid out by the Student Loans Company (SLC).

SLC is expecting to send some £2 billion out to students over the autumn term this year. But the company is warning these newly-flush students to be extra vigilant, with scammers known to target students at this time of year to try and part them with their pay-out.

Last year, SLC says it stopped £2.9 million of maintenance loan payments from being stolen in ‘smishing’ and phishing scams, after students received and acted on false communications. Similar to its better-known cousin, smishing is fraud involving text messages, and is currently the most popular form of scam students seem to be encountering, the company says.

Targets are usually asked to click a link to complete a task - sometimes by what appears to be the Student Loans Company - like verifying their bank details or confirming their personal information. This provided an opportunity for a payment to be diverted to a scammer’s bank account.

SLC’s risk director, Alan Balanowski, says neither SLC or Student Finance England (SFE) will ever ask students to provide or verify their personal or financial information via email or text message.

“Starting or returning to university is an exciting time, but it’s also busy, with students getting organised and set-up for the academic year, which includes dealing with information from different organisations, including ourselves,” he said. “We aim to ensure our payment process is simple for students, but we do experience a rise in smishing scams at this time of year. This means students need to be alert to any potential attempt to intercept their maintenance loan instalment.”

SLC had a range of methods it used to prevent scams, he continued, but their most effective tool was working together with students to stop them. “If a student receives a suspicious message, they should delete it and report it immediately, but if a scammer does succeed in obtaining personal details, then we must collectively act quickly to spot and block the action.”

Mr Balanowski said their message to students was simple. “Think before you click.”

SLC’s top tips for keeping student money safe from scammers

Where did it come from? Neither SLC nor SFE provide any services through WhatsApp and will never initiate contact with a student through social media channels - including Facebook, X (formerly known as Twitter), Instagram or TikTok - to discuss their application or student finance entitlement. If you receive a message from SLC you are unsure of, log into your online account to verify it.

How does it look? SLC says students should check the quality of the communication - with misspelling, poor punctuation and bad grammar often signs of phishing. Suspicious looking emails, phone calls or text messages, will often arrive around the time of an expected payment, and because they are often sent in bulk, they are unlikely to contain both a first and last name. They commonly start - ‘Dear Student’.

Think before you click. If an email or text message contains a link, hover over it to check where it goes. If in any doubt don’t risk it, always go direct to the source rather than clicking on a potentially dangerous link. Messages that convey a sense of urgency are also unlikely to be genuine – for example ‘failure to respond in 24 hours will result in the account being closed’.

Double-check the right way. Scammers can use a variety of methods to try and get students to pay money or share personal details, including the use of fraudulent phone calls, social posts and direct messaging on digital platforms. Always use an official phone number, online account or official communication channel to verify the message you’ve received is genuine. SLC and SFE will send a text message to students if a change has been made to their bank details. If you haven’t changed your bank details and receive a message, contact us immediately.

Don’t give scammers material to work with. SLC urges students to be mindful of the information they share on social media, and elsewhere online, to help guard against identity theft. Identity theft happens when fraudsters access enough information about a person’s identity, such as their name, date of birth, customer reference number, course information or their current or previous addresses to impersonate them online and over the phone.

Students who receive any suspicious messages can report it by emailing [email protected] . They can also contact SLC for verification by calling its dedicated hotline on 0300 100 0059. For more advice and information on recognising and avoiding scams, check out Action Fraud, a UK-wide reporting centre for fraud and cybercrime.