August and September are “back to school” months for students of all ages and their families. And while this is an exciting time, it can also be a highly stressful time, especially for those headed to college and trade school programs they are expected to finance. This stress can lead students and their parents, grandparents, and other guardians to let their guard down against instances of financial aid fraud.
Financial aid scammers run their scams for the same reasons most other scammers work. They either want money they didn’t perform any legitimate, truly helpful tasks to earn, or they want to gain unauthorized access to your personal information in order to commit identity theft. While there are some scammers out there who run their scams just to see what they can get away with, financial aid scammers are not among them. These people are always after your money or your personal information.
The best way to protect yourself and your family from this potentially devastating experience is to ask yourself the following five questions before having any interactions with anyone claiming to want to help you finance an education.
Was the offer surprising or unexpected in any way?
Surprise grants, scholarships, student loan forgiveness programs, and student loan repayment deals simply do not exist. There may be more financial aid available through your school, or through your current workplace, than you were aware of before talking to your admissions representative, guidance counselor, or student advisor. You may certainly be surprised at some of the organizations that offer aid, and some of the criteria they have for aid recipients, but legitimate scholarships, grants, and paths to ease the burden of your student loans do not pop up in ads on social media, appear in your mailbox unexpectedly, or result from a strange phone call. In order to receive any type of financial aid, you have to seek it out and apply for it.
Were you asked to pay a fee or perform a task in order to obtain the scholarship, enter the loan forgiveness program, or gain access to information about financial aid?
Legitimate loan forgiveness or easy repayment options do not charge you anything to take advantage of them. Real scholarships and grants do not cost anything to apply for or to accept. Organizations offering to sell you access to their database of scholarships or grants for a membership fee are not technically scams as long as they really do give you a list after you pay the fee. But they are still ripping you off. The same information is available for free, with just a little additional searching. And anyone who asks you to perform tasks in order to get your money, such as depositing or cashing a check and sending a portion of the money back, is doing nothing more than using you in a money mule scam.
Is the representative of the organization or program asking you for excessive or strange information?
For need-based aid, you will file a FAFSA (free application for federal student aid). As the name suggests, this form is completely free to fill out. Nobody honest will ever ask you for a fee to fill this out for you. This is also the one and only place you should be entering your financial information. If a scholarship is described as “merit based,” this means the funds are awarded based on some characteristic or group of characteristics or skills the organization deems worthy of financial support for college or trade school. They do not need information about your bank, your taxes, or your paychecks.
Do you feel pressured to sign up for a program or service, attend a seminar, or apply for the funds immediately?
High pressure tactics are a signature of all types of scammers, and financial aid scammers are no different. Scholarships and grants will have legitimate deadlines, but those will be stated in the application materials or on the organization’s website. Anyone who is pressuring you to join a program, attend a seminar or meeting, or to quickly gather and send them personal information is only setting you up for a scam.
Did the representative make promises that seem outlandish?
“Full ride” scholarships do exist. They are typically offered through the college, university, or trade school you will be attending, and are extremely difficult to earn. There are also large legitimate scholarships out there. In order to receive one, the applicant must be a perfect or near perfect match to the criteria set by the organization. Anyone promising you or a child or teen in your family large sums of financial aid casually, guaranteeing that your student loans will be forgiven, or promising to keep your student loan payments low, is setting you up for a scam. They’re not trying to help you. They’re trying to generate enough excitement to get you to let your guard down and offer them information they should not have.
The financial aid office of the college, university, or trade school that you will be attending this term is your most reliable resource anytime there is doubt about a scholarship, grant, or loan reduction or forgiveness program. Gather any and all information about any program you are thinking of pursuing, research it carefully on your own, and then check with the proper department at your school before offering anyone any information about yourself, your family, or your finances.