3 Scams to Watch for As You Navigate the Financial Aid Process
As most students and their families are aware, the college admissions process can be long and intimidating. And adding to the stress of filling out applications and financial aid forms is the chance that an unscrupulous company might be trying to manipulate or scam you during the process.
To ensure that you don't fall prey to any of the common scams making their way around the country, College Confidential sat down with the team at Intuit to get the details on what to look for when dealing with a potential scammer.
1. You're Promised Scholarships or Financial Aid – for a Fee
If a company is promising you scholarships or financial aid guarantees, they're likely to be unscrupulous, since it's difficult to predict what types of aid you'll be getting. However, if they're asking for a fee for these "guaranteed" aid options, then you know you have a scam on your hands. Submitting the Federal Application for Student Aid (FAFSA) is completely free of charge, and the only place where you can file it is at fafsa.ed.gov, the Intuit team notes. If you're applying for scholarships, you should be able to apply at no cost, and no company can guarantee that you'll be awarded one.
2. You're Awarded Aid for Which You Never Applied
If you are notified that you are the recipient of college money, make sure you know the source that's contacting you. In some cases, you may hear from a company offering you aid that you never actually applied for, and it could cost you in the end.
"Whether by a sudden phone call or mysterious letter in the mail, be wary of anyone telling you you've been randomly selected for a scholarship or grant," the Intuit staff adds. "Often the next step is sending the scammer your bank or personal information so they can then steal your money or identity."
3. Debt Management Firms Charge a Fee Up-Front
For those who already have student debt, it can be challenging to apply to one school while owing money to a previous college. In these cases, you may be interested in seeking debt relief, but don't fall prey to a company that says your debt can go away if you pay them a fee up-front.
"The FTC has made it illegal for debt relief programs to charge a fee up-front, so if a company is promising to lower or renegotiate your debt after you send them money, that's a red flag," Intuit notes. "Legitimate companies are only allowed to accept payment once the debt has been settled, or you agree to a new payment plan."
Remember, however, that you don't need a third party to help you negotiate your debt or restructure your student loans. Organizations such as The National Foundation for Credit Counseling can help students manage loan debt legitimately.
Got Scammed? Here's What to Do
If you did fall under the spell of a scammer, you have some options. Intuit advises you take the following steps if you're in this situation:
- Notify the Credit Bureaus: Let Equifax, TransUnion and Experian know that your information may have been compromised. "They can place a fraud alert on your account notifying creditors that you don't authorize new credit opened in your name," they note.
- Secure Your Accounts: In the scenario that you think a scammer may have gotten access to your bank account, cancel any associated credit cards and notify the bank to look for any charges from them.
- Let Your Loan Servicer Know: "For loan scams, change your account information and any logins to make sure the scammers can no longer manage your payments," Intuit's team says. "Let your servicer know that you have been the victim of a scam."
Report the Scam: You can report the scam to the Federal Trade Commission (FTC), The Consumer Finance Protection Bureau (CFPB) and the Better Business Bureau (BBB) to ensure that the scammers are investigated and to prevent others from falling for the same ruse. You can learn more about how to avoid financial scams here.