Financial Aid Scams-College Bound Students Beware!!

cartoon picture of financial aid scams (puzzle pieces)

Scammers show no mercy to any one person or age group. You often hear about scammers preying on older Americans. But at the same time, there’s another group of people that scammers have been targeting. They are the younger Americans. We often say that as younger people, we’re often the type that “don’t know any better”. That may be true in some aspects. But when it comes to finances for both young people and their parents, it’s better to know about these scams and avoid them than not know and be a victim.

With that said, our scam of focus today will focus on financial aid. This is a kind of scam that focuses on young people who are finishing up high school and may be considering college. Yes, we know that a college education does not come cheap, so college bound students need financial aid to ensure that paying for college won’t be such a hassle.

With that in mind, we’re going to dive into what distinguishes the real financial aid process from this kind of scam, including what to look out for and how you need to protect yourself (or if you’re a parent, your child) from these types of scams. You’ll go from “not knowing any better” to being very aware after reading this.

How The Real Financial Aid Process Works:

If you’ve been accepted to a 2-year, 4-year college or university (or even graduate school), then it is important to determine your options on how you can pay for your education. One of the best options is financial aid by way of student loans from the school itself, private lenders, or even through the Department of Education. A student will apply for student aid via a physical, mail-in application or online through the FAFSA website.

They will fill out their personal information and other relevant, but pertinent information that is needed to help make the determination of whether or not you should qualify for financial aid. Once you’re application is processed and looked over, you will receive a letter of approval or rejection.

What To Look Out For In A Financial Aid Scam:

If you are unaware of how the financial aid process works, you may be likely to fall for this kind of scam. That is why it is important to know what you should look out for in a financial aid scam. To begin, a scammer will contact their potential victims by way of either telephone or email. If it is by phone, they’ll either call using a US toll free number or a local number. This will give someone the idea of the caller possibly being legitimate. Some will even claim to be someone from the US Department of Education. If it’s by email, then you’ll notice that the email is filled with inconsistent grammar and spelling.

With that said, here’s what you need to look out for:

Application Fees: One thing to note is that when you fill out a FAFSA form for financial aid, you never have to pay for an application or processing fee. One of the common goals for a scammer is to extract as much money as possible from young people and their parents. And the unfortunate fact is that already, millions of dollars have been stolen from people because of this and other similar scams. If a scammer asks you for money for the purpose of a processing fee, application fee, or anything similar to that, that’s when you need to end the conversation right there. As a rule, if you have to pay money to get money in a situation like this, then it is a scam.

Grants Instead Of Loans: At times, the scammer will claim to be someone from the U.S. Department of Education. They will claim that instead of a student loan that you’ll need to pay back at some point in the future, they have a grant with your name on it. Then, they’ll ask for your personal information like your bank account or social security number. At that point, you are to cease any communication.

It is important to never give out any of this type of information to anyone you don’t know over the phone or Internet. While some scammers will often go after your finances, some will even go so far as to steal your identity. The latter will even get you in deeper trouble financially or even legally.

“Guaranteed” Money: If it’s too good to be true, chances are it probably is. Such as the case with guaranteed money by way of scholarships. Adding on to the previous point about grants, scholarships are for those who apply for them. Furthermore, you will only qualify for scholarships if you meet certain standards or guidelines (like GPA or intended major). If you are contacted by someone who claims that they will guarantee you money for a college education in the form of a scholarship and you didn’t apply for it, ignore the offer.

Preventative Measures: How To Protect Yourself

Knowing how to spot these scams and protect yourself from them is key. It is the difference between saving your bank account and identity from harm and having to deal with the financial and legal headaches of restoring them both. With that in mind, here are a few measures that you need to take:

Never Give Out Personal Information Over Phone Or Internet: This might bear repeating time and time again. But it is always important to never give out any financial or any other information that is tied to your identity. This means not doing so over the phone or via email. Scammers will stop at nothing to extract every cent out of your bank account. Some of them may even outright steal your identity. As a result, your finances and even your credit might suffer.

Remember What Applications You’ve Applied For: Make a note of any applications you have filled out that pertain to the financial aspect of your college education. This means keeping confirmation emails for your FAFSA application and even proof that you applied for a scholarship. This way, in the event someone calls, you’ll always have a hard copy of something to confirm that you’re speaking with the real deal and not a scammer.

Report Scammy Activity To Proper Authorities: As mentioned before, there are scammers who will pose as an employee from the U.S. Department of Education. If they inquire about your application or make promises like guaranteed money, then end contact immediately. Next, contact the Department of Education to report the conversation involving your financial aid. They will quickly determine whether or not if you were talking to a real employee or a scammer.

A cartoon picture of a white man in a black suit, running away from a bank loan

My Final Conclusion:

Financial aid is all part of the college application process. But it can also be an opportunity to scam young people and their parents out of their hard earned money. Remember to know the difference between the real financial aid process from the fakes. It is always important to protect your information at all costs and never give it out over the phone or Internet. Plus, it never hurts to verify if you are speaking with the right kind of people or not. It’s better to play it safe than become the next victim of a scam.

Do you have any experience with being involved in a financial aid scam? Do you have any questions concerning this scam review? If so, please leave your comments or questions at the bottom of this post, and I will be more than happy to get back to you. Thanks again for checking out my post, and good luck with your success online..

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