Going to college, vocational school, or a certificate program can often help you move up in your career and make more money — but it can also be expensive. Scammers take advantage of that, saying they’ll help you get financial aid or scholarships to pay your tuition bills. Really, they’re just trying to take your money or steal your personal information.
What Scammers Promise
Scholarship and financial aid scams often start with a social media post, email, or a letter in the mail. It might look like a personalized invitation, saying you’ve been selected for a particular scholarship or financial aid package. Sometimes, there’s a callback number or details about an in-person workshop at a local hotel. But these calls and events are usually high-pressure sales pitches where they pressure you to pay for their services immediately — or risk losing out on these “special” scholarships or financial aid packages.
Financial Aid Scams
Some companies claim they can make you eligible to get financial aid, including grants, loans, work-study programs, and other types of aid. For a processing fee, these companies say they’ll handle all the paperwork for the so-called program. What they’re really doing is filling out the Free Application for Federal Student Aid (FAFSA), which is the free form that 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 addition to losing money to these scammers, you can also get in trouble — including fines up to $20,000 and/or jail time — for any false information on your FAFSA.
Only you and your family can complete your FAFSA — which is always free to fill out and submit. Never share your FSA ID (the username and password that you use to apply for the FAFSA) with anyone — including companies or consultants. Dishonest people could use that information to get into your account and take control of your personal information.
Never pay to apply for a scholarship. If a company promises you a scholarship or grant in exchange for a “processing cost,” “redemption fee,” or other upfront payment, walk away.
Many of these companies give you nothing for your fee — not even a list of potential sources of scholarships. Others say you’ve been selected as a “finalist” for a scholarship award that you never applied for, or that requires an upfront fee. Sometimes, these companies ask for your checking account or credit card information to “confirm eligibility,” then debit the account without your consent. Some may offer a “money back guarantee” but attach conditions that make it impossible to get a refund.
There are many legitimate companies that have lists of scholarships they offer for sale. Others might charge you upfront to compare your profile with a database of scholarship opportunities — and then give you a list of awards that you may qualify for. And there are online scholarship search engines, too. The difference is that legitimate companies never guarantee or promise scholarships or grants.
Signs of a Scholarship or Financial Aid Scam
Not sure if an offer is a scam? Here’s how to tell. If someone advertises an offer with any of these phrases, or a variation, it’s a scam.
- Scammers say: “The scholarship is guaranteed or your money back.”
- Scammers say: “You can’t get this information anywhere else.”
- Scammers say: “I just need your credit card or bank account number to hold this scholarship.”
- Scammers say: “We’ll do all the work. You just pay a processing fee.”
- Scammers say: “The scholarship will cost some money.”
- Scammers say: “You’re a finalist [for a contest you never entered].”
Attending a Seminar
Companies like to promote seminars where you can learn about how to get scholarships and financial aid. Some are legit, but some are scams. These events are usually high-pressure sales pitches where they tell you to pay immediately or risk losing out on the so-called “opportunity.”
If you go to a financial aid or scholarship seminar, follow these steps:
- Don’t pay any money at the seminar. Only scammers will tell you to pay now or risk losing out on the opportunity. Solid opportunities aren’t sold through nerve-racking tactics like rushing and high pressure.
- Investigate the organization and other options before you pay anything. Search online for the organization’s name plus the words “complaint” and “scam.” See what others say about them. You may find that you can get the same help for free from a school guidance counselor or financial aid advisor.
- Don’t trust “success” stories. The seminar operator may have paid people to give glowing stories. Instead, ask for a list of at least three local families who’ve used the company’s services in the last year. Follow up with the families and ask if they’re satisfied with the products and services they got.
- Don’t do business with anyone who’s reluctant to answer questions or give details. Legitimate business people are more than willing to give you information about their service.
- Ask how much money you’ll have to pay, and what the company’s refund policy is. Get information on the total cost and get it in writing. Keep in mind that scammers might make it hard or impossible to get your money back, no matter what their refund policy says.
What To Do If You’re Looking for Financial Aid or a Scholarship
As you start looking for financial aid or a scholarship, follow these steps:
- Fill out the free FAFSA form to apply for financial aid. (It’s the most important step you can take to get financial aid.)
- Never pay anyone to fill out or process your FAFSA. That’s probably a scam.
- Talk with a guidance counselor (if you’re in high school) or the financial aid office (if you’re in college) about your financial aid and scholarship options.
- Never pay at a seminar on how to get financial aid or scholarships. Especially if they pressure you to pay. That’s probably a scam.
- Do your research before you pay anyone for help with financial aid or scholarships.
- Share these ideas with others who are looking for financial aid, too. You can help them avoid a scam.
What To Do If You Paid a Scammer
|Did you pay with a credit card or debit card?||Contact the company or bank that issued the credit card or debit card. Tell them it was a fraudulent charge. Ask them to reverse the transaction and give you your money back.|
|Did a scammer make an unauthorized transfer from your bank account?||Contact your bank and tell them it was an unauthorized debit or withdrawal. Ask them to reverse the transaction and give you your money back.|
|Did you pay with a gift card?||Contact the company that issued the gift card. Tell them it was used in a scam and ask if they can refund your money. Keep the gift card itself, and the gift card receipt.|
|Did you send a wire transfer through a company like Western Union or MoneyGram?||Contact the wire transfer company. Tell them it was a fraudulent transfer. Ask them to reverse the wire transfer and give you your money back.MoneyGram at 1-800-MONEYGRAM (1-800-666-3947)Western Union at 1-800-325-6000|
|Did you send a wire transfer through your bank?||Contact your bank and report the fraudulent transfer. Ask if they can reverse the wire transfer and give you your money back.|
|Did you send money through a money transfer app?||Report the fraudulent transaction to the company behind the money transfer app and ask if they can reverse the payment. If you linked the app to a credit card or debit card, report the fraud to your credit card company or bank. Ask if they can reverse the charge.|
|Did you pay with cryptocurrency?||Contact the company you used to send the money and tell them it was a fraudulent transaction. Ask to have the transaction reversed, if possible.|
|Did you send cash?||If you sent it by U.S. mail, contact the U.S. Postal Inspection Service at 877-876-2455 and ask them to intercept the package. To learn more about this process, visit USPS Package Intercept: The Basics.If you used another delivery service, contact them as soon as possible.|