Student loan scam: what to check before the next payment lands

According to Birmingham Live, students are being warned about loan scams as the new academic year starts and the first of three maintenance payments goes out this month. About £2.6bn is being paid to 1.1 million students in England and Wales. Anyone expecting a loan payment this month should check their account details are correct before the money is due, not after.

The action is simple. Log into the genuine Student Loans Company account directly, rather than through any link in a text or email, and confirm the bank details on file are the ones a student actually gave. If a change was not requested, that account should not show a different bank detail waiting to take effect.

What happened last year

In the last academic year, £519,000 was lost to scammers who defrauded 168 students, according to the SLC. More than 1,100 people had their account details changed by criminals, but in most cases the fraud was stopped before money left the account. That gap between 1,100 and 168 is the point worth sitting with: detail changes happen often, and most get caught, which means the window to catch one is real and worth using.

Alan Balanowski, risk director at SLC, described the mechanics plainly: "It's a race against time because the criminals then use those details to log into our genuine site to change the bank account on the genuine student account to divert the maintenance loan payment before we spot it." The scam does not need to trick a bank. It needs a student's login details, and it uses the real SLC site to do the rest.

Two checks that cost nothing

SLC says it will never ask for personal or financial information by email or text. It will also never send a message with an urgent deadline, the kind that says an account will be closed if someone does not respond within 24 hours. A message doing either of those things is not from SLC, whatever it claims.

If a change to bank details has genuinely been requested, SLC will send a text to confirm it. That confirmation text is the only kind worth trusting. If a text arrives about a bank detail change that was never requested, the account should be checked directly, by logging in through the normal route rather than any link in the message.

Lord Hanson, the Fraud Minister, said criminals look to cash in on students managing their finances for the first time, and pointed to Stop! Think Fraud as the government's advice for anyone getting an unexpected or suspicious message about their loan. The government says it is running targeted campaigns on university campuses this term to help students spot the warning signs before a payment is diverted rather than after.

The first loan payment lands this month. Checking the bank details on a student loan account now takes a few minutes; recovering a diverted payment does not.