College scholarship and financial aid scams
These tips will help you learn to spot and avoid financial aid scams aimed at students.
Common warning signs of financial aid scams:
- You have to pay a fee just to search or apply for scholarships
- A company asks you for for credit card or bank account information in order to hold a scholarship
- High-pressure sales tactics rushing you to sign off on receiving aid (e.g. “This is a limited time offer.”)
- Receiving notice you were awarded a scholarship you never applied for
- Financial aid services that avoid your questions
- Grandiose promises that you’re guaranteed a scholarship just for signing up for the service
How do you avoid a financial aid scam?
- Do not provide any personal (Federal Student Aid PIN, Social Security Number, etc.) information over phone, email, in person, or through an unprotected website.
- If you’re attending a financial aid seminar, research the company organizing it.
- Take time to research your financial aid providers. Even if mailings and other print materials include a Department of Education seal, it isn’t necessarily government-approved. Scammers sometimes pose as official agencies to trick people.
How to find legitimate help paying for college:
- Visit StudentAid.gov.
- Complete the FAFSA, which can help you qualify for scholarships and aid at a number of different colleges. College Now Greater Cleveland lists a variety of scholarships available to high school, undergraduate, undocumented, adult learner, technical & vocational, graduate and PhD students.
- Contact your school’s (or your prospective school’s) financial aid office. Their counselors can help.
College loan repayment and debt collection scams
Scammers often prey on people’s anxiety about paying off debts – and new graduates who owe on student loans can be targets for these scams.
Here’s what you need to know to avoid these kinds of scams.
- Know your loan servicer and keep track of what you owe and what you need to pay. You can find out how to pay off federal loans through the U.S. Department of Education’s site.
- Do not provide money or personal information to callers or emailers who say they can help you get your loans forgiven – for a fee. They are scammers.
- Don’t be rattled by debt collection calls or threatening emails saying you missed payments. Many scammers scare victims into acting first, before they have time to think. If you suspect you might be behind on payments, contact your servicer.
- Avoid any company that uses high-pressure sales tactics (such as rushing you to commit to a debt relief plan).
- Never share your Federal Student Aid PIN with anyone except your servicer. Always contact your servicer through its website.
If you’re struggling to pay on your student loans:
- Get smart advice on managing loans from the U.S. Consumer Financial Protection Bureau.
- Consolidate your federal loans for free by visiting StudentLoans.gov.
- Consider altering your payments with an income-based plan. Visit StudentLoans.gov.
- If you have private loans and you’re unable to make monthly minimum payments, contact your servicer and ask what options are available.
- The National Consumer Law Center’s Student Loan Borrower Assistance site has helpful information for borrowers who are struggling to repay student loans or in default.