College Money That's Too Good To Be True
Have you heard this one before? This idea strikes a note of frenzy in many students’ and parents’ hearts as they strive to look for affordable ways to pay for their college education. While this assertion is undeniably true, beware of those who take advantage of the feeling this statement creates in order to further their own personal gain.
Scholarship scams have further clouded the college planning process. According to FinAid.org the victims of these scams lose more than $100 million collectively each year. Some of the caution signs include scholarships that require an application fee, scholarship matching services that guarantee success, unsolicited scholarship invitations, and advanced-fee loan scams. A good rule of thumb is if the scholarship description or opportunity raises the slightest suspicion, then it is likely not worth pursuing. If there is a doubt about the validity of a scholarship opportunity, get an independent opinion from someone you trust (i.e. a financial aid advisor or high school counselor).
Specifically in Washington, a contact in the UW admissions office alerted us of the following scam:
"It was brought to our attention recently that someone claiming to be a representative of the U.S. Department of Education (ED) is calling students, offering them grants, and asking for their bank account numbers so a processing fee can be charged. Specifically, the caller tells the student he understands the student has federal student loans and offers to replace the loans with an $8,000 grant. The caller explains that a processing fee must be charged and obtains the student’s checking account information.
We urge you to remind your students that there is no ED program to replace loans with grants and that there is no processing fee to obtain Title IV grants from ED. Furthermore, students should never provide their bank account or credit card information over the phone unless they initiated the call and trust the company they are calling."
For information about identity theft prevention, visit www.ed.gov/misused.
For information about preventing financial aid scams, visit www.studentaid.ed.gov/lsa.