Attention, grads: don’t get burned by scholarship scams.
As millions of students put on their caps and gowns this spring, many may be wondering how they will pay for college in the fall. Prospective college students often look to scholarships as a way to lessen the financial burden on parents and to avoid taking out student loans.
Unfortunately, scam artist know how stressful paying for college can be and they’ve tailored a fraud to separate eager students and their families from their money – scholarship scams.
Scholarship scams prey on consumers’ fears and struggles to find ways to pay for the skyrocketing costs of higher education. They come in a variety of guises, but a common thread is that usually there is need for the victim to pay money or provide a credit or debit card number upfront before a supposed scholarship or grant is awarded. A good rule of thumb is that if you have to pay money to get money, it’s probably a scam.
Other red flags when it comes to scholarship scams are offers that promise “guaranteed” scholarships or pressure to act quickly in order to secure money. Students and their parents should also be wary of services that offer to match grant seekers with scholarships (sometimes known as financial aid advice services), especially if they offer to apply for you or require a big fee. Some scholarship scams ask you to pay money for information you can get for free, such as the federal FAFSA form. There are any number of free sources of financial aid information, including school counselors, state education agencies, the U.S. Department of Education and the Federal Student Aid Information Center. Be careful, too, when you receive unsolicited offers to help with financial aid from people or organizations you’ve never heard of or can’t find reliable information about.
Graduation should be a happy occasion – and figuring out how to pay for college is stressful enough without the added dilemma of getting caught up in a scholarship scam. Be smart and take precautions to avoid falling victim to a con artist preying on new grads and their families.
For more information on these scams, check out NCL’s Fraud Center’s tips for avoiding scholarship scams, and for other smart consumer advice for new college students, visit" NCL’s Consumer U page":http://www.nclnet.org/personal-finance/66-teens-and-money/422-consumer-u-tips-for-college-%20students?utm_source=NCL+Fraud+Alert+May+2012&utm_campaign=May+Fraud+Alert&utm_medium=email.