Families with kids going to college or vocational schools may be looking for all the financial help they can get. There are a lot of places to go for scholarships and grants but you should be careful about where you apply. Thieves prey on unsuspecting families so we have the top three things to look out for.
1. The company offers to take care of all of the paperwork
76% of families used some sort of scholarship or grant for this last school year. That’s a lot of paperwork!
The Federal Trade Commission warns you to watch out for companies that promise they can get you financial aid and take care of all of the paperwork.
What they could be doing is stealing your information or just filling out the free application for Federal Student Aid (or FAFSA). You could do it yourself. This free form determines if you’re eligible for federal aid. Sometimes, scammers will use false information about your family’s income, assets, and benefits to qualify you for more financial aid than you would get if they told the truth.
In one report to the Better Business Bureau scam tracker a business charged $2,000 to help with college admissions. The whole deal was a scam.
2. You get a scholarship offer without applying for it
The BBB says one type of scholarship fraud often starts with unsolicited offers.
“So if you get an email, text, or social media message from someone just out of the blue saying they want to give you a scholarship and you have never even applied for the scholarship, then that’s definitely a red flag and how these scammers would typically operate,” said Leah Napoliello, Vice President BBB Houston & South Texas. “Then they want you to start paying a fee for it in order to get this supposedly free scholarship. And then, of course, you pay that fee and you never receive anything.”
You should also ask how the organization got your name and contact information, and then verify it with the source outside of the email, phone number, or website they used to contact you.
3. You are asked to pay money upfront for financial aid offers
The BBB also says to be careful about companies that ask you to pay upfront for services related to financial aid. Napoliello says never pay for a seminar on how to get financial aid, especially if they pressure you to pay.
There are legitimate companies that sell lists of scholarships. Others may charge you to compare your profile with a database of scholarships. The difference is legit companies never guarantee or promise scholarships or grants.
You can check with sites like the Better Business Bureau and look up the history of the entity and see what their background is.
Where is the best place to go for financial aid help?
You should always start looking for financial aid help by working with your school counselor or college financial aid office.
In the United States, more information is available online at studentaid.gov for the different financial aid options. If you don’t think you qualify for financial aid, review the Federal Student Aid website options. Many colleges and universities use the financial aid form information for other types of awards.
MORE INFO: Common FAQ about student aid