This is correct. I know very well. You will be caught in your college. you will lose your studies permanently. If you don't care about your studies and want to spend your life in jail you can go ahead with this suggestion. Good suggestion. You may get few $$ from the user for telling them the truth. Yes. even one mistake will put you in jail for life. do not ignore. somebody may be in trouble. it may be the original account holder or the guy/gal who bought the account. So, either report it to the user or PayPal.
Just inform paypal and leave it for them to deal with the problem. Don't want to have anything to do with non legitimate funds or money.