Starting college usually involves a lot of requirements—all those 101 classes in math and science and literature. But one of the things that colleges won’t teach is the financial literacy that your student needs to be safe and successful in adult life. For many kids, heading off to college involves a first checking account, perhaps a first credit card, and taking out student loans that cause them to have credit reports and credit ratings for the first time. All these things plus their financial inexperience make them prime targets for criminals looking to steal their money or, worse yet, to steal their identities for financial gain.
The college won’t teach them how to protect themselves from financial fraud, so it’s up to you to give your child a crash course in smart, defensive financial management.
Here are some habits they should establish now:
- Review bank and credit card statements every month and report any errors immediately. (Also, don’t leave financial documents lying around a dorm room, and use a shredder to dispose of old paper statements safely.)
- Students are often besieged with credit card offers in the mail, email, or in person, and some of those are scams to steal their personal information. They should shred any credit card offers they receive in the mail, to prevent someone else applying for a credit card in their name, never respond to an online solicitation, and they should never give personal info to people offering free gifts in exchange for filling out a credit card application.
- Check credit reports regularly. Anyone old enough to have a credit report needs to be watching those reports for signs that someone else is using their identity. We recommend using annualcreditreport.com. The FTC has online information about how to request these free annual credit reports.
- Beware of student loan scams. For example, the U.S. Department of Education (DOE) has reported scams where telemarketers charge money to process financial aid applications. (The DOE never charges to process applications.) Other scams offer to erase student debt for a fee or use promises of scholarships or grants to get students to hand over personal information. If the offer involves up-front fees, offers to instantly wipe out debt, or doesn’t come directly from a college or bank, it’s probably a scam.
- Student loan payments can also be stolen, so don’t check student loan accounts over public wi-fi networks, never leave student loan information in view in a dorm room, nor share student loan passwords with anyone.
A college degree can be a ticket to a bright future, but a stolen identity can be a ticket to a tough start in life, adding fraudulent debts and bad credit ratings to the burden of student loans. To keep their future bright, make sure your kid is as smart about finances as they are about tests and term papers.