How Scammers are Making Money Off of College Financial Aid Schemes

FAFSA screenshot using camera 150x150 How Scammers are Making Money Off of College Financial Aid Schemes

The cost of attending college rises every year, so it is no shock that students and their families are searching more fervently for ways to try to lessen the financial burden that accompanies a college education. Unfortunately, students in their search for scholarships and outside financial aid are falling prey to unscrupulous scammers and losing their hard-earned college savings.

This is a difficult scenario because for several reasons financial aid might seem like one of those “too-good-to0-be-true” type offers. Many legitimate scholarship funds and programs will help foot the bill without asking too much of the student. Because scholarships and other types of financial aid are incredible offers of basically free money, it can be hard to distinguish the what’s real and what’s phony.

There are more and more fake financial aid offers out there, so it is crucial that students and families be aware of what these fake offers typically look like. The majority guarantee that they can provide students with scholarships in exchange for an advance fee to ensure that they do not miss out on this limited “opportunity.” Others will ask for checking account information to confirm eligibility and then charge the account without prior consent from the student. Several claim to have programs that handle a student’s financial aid paperwork and make them eligible for financial aid, only for a processing fee. However, remember that the only application that officially determines a student’s eligibility for all aid programs and offers is the Free Application for Federal Student Aid (FAFSA), which can be completed online and submitted for free.

When applying for scholarships and financial aid programs, beware of any offer that is asking for advance fees or secure financial information because that will signal that whoever is behind the offer is out to get your money. Look out for these tell-tale lines:

  • “The scholarship is guaranteed or your money back”
  • “You can’t get this information anywhere else”
  • “We just need your credit card or bank account number to hold this scholarship”
  • “We’ll do all the work. You just pay a processing fee”
  • “The scholarship will cost some money”
  • “You’ve been selected by a national foundation” you haven’t heard of
  • “You’re a finalist” in a contest you never entered

Lastly, following these tips can help you and your family find offers that add to your savings, instead of stealing your money away:

-Don’t be rushed into paying and avoid high-pressure, limited-time offers

-Do some research, don’t just take their word for granted

-Ask a lot of questions and watch out for evasive answers

-Don’t believe a guarantee or promise of a scholarship or grant

-Use these legitimate college financial aid resources: StudentAid.govwww.fafsa.govwww.collegeparents.org, and www.collegeboard.org

If you believe you have been targeted or fooled by a scam, file a complaint with the FTC.

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About Hannah Sassi

Hi, my name is Hannah Sassi and I am the Communications Intern for the Council of Better Business Bureaus in Arlington, VA. My hometown is Hatfield, Massachusetts and I am currently a freshman at The George Washington University majoring in Business with a specialization in Economics and Public Policy.