6 College Scholarship, Financial Aid Scams to Watch Out For
With back-to-school season looming, many college students and their families are trying to figure the best way to lighten the increasing financial burden of college expenses.
But as more students and parents turn to financial aid, private loans and other avenues for financing college educations, the number of college scholarship and financial aid scams has increased.
Here are six types of college-aid scams you'll want to look out for:
- Being charged for free financial aid applications. Applications for federal student aid and state grants are supposed to be free. Companies that charge for "assistance" in filling out these forms frequently promise results, but they have no ability to guarantee success for need-based government programs.
- "Scholarship" awards that require you to give out personal information over the phone. College students who received unsolicited offers of scholarship money or financial aid should be wary, especially if the offer requires giving personal information over the phone.
- Companies promising to get your student loans out of default for a small fee. If you are behind or in default on student loans, contact your lender. You should never have to pay for information about your loan, and a company that purports to be able to get your loan out of default for a small fee is likely a scam.
- Scholarships that charge an application fee. Legitimate scholarships do not typically charge an application fee. Even if the fee is minimal or will supposedly be refunded if the student isn't granted the scholarship, these may be red flags for a scam.
- Scholarship services that "guarantee" success. Be careful with services that guarantee that you'll get tons of free money for school. These services often have names that sound official, but may be scamming you out of your money and your personal information.
- Financial aid seminars. Another common scam is the financial aid seminar. These seminars often use high pressure tactics and paid shills to pressure students and their families to pay for their services.