Is It A Great Scholarship Opportunity, Or A Scam?
As the cost of higher education continues to increase, young adults are looking for alternative ways to pay for their education costs. Seeing a unique opportunity, fraudsters have developed scholarship and financial aid scams that take advantage of students. Some devious companies promise or guarantee scholarships, grants or other financial aid packages to unsuspecting victims for an upfront fee. Others use high pressure sales tactics at seminars asking for immediate payment or risk losing out on the “opportunity.” Most of these deals tout a “money back guarantee” but have terms and conditions that make it almost impossible to receive a refund. Others provide nothing for the student's advance fee, not even a list of potential sources.
Some of these unscrupulous companies ask for the student's checking account information in order to "confirm eligibility." After receiving the information they debit the account without the owner’s consent. Other companies offer their services for a small recurring fee, usually monthly or weekly, and then ask for authorization to debit a checking account. Most often these companies continue to debit the account even after the owner has asked to cease services.
Other companies claim they have programs that could make students eligible to receive financial aid, such as grants, loans, or work-study programs, and for a processing fee the company will handle all of the paperwork. Students should be cautious when considering these services, as the only application that will determine eligibility for all programs is the Free Application for Federal Student Aid (FAFSA) – a form anyone can complete and submit for free.
Tips for avoiding financial aid scams:
- Avoid any programs or services that guarantee a scholarship and have a money back guarantee.
- Avoid offers that state you’ve been selected to receive a scholarship you haven’t applied for or that you’re a finalist in a competition you never entered.
- Avoid programs or services that have an upfront fee or require your financial account information in order to be eligible for the aid. Thoroughly research any organization you're considering paying for help as well as researching other avenues, you may be able to get the same help for free elsewhere.
If you believe you have been victimized by a scholarship scam or wish to report suspicious activity, please file a report here.