Beware of Fake Financial Aid

Who would take advantage of a teenager looking for help paying for an education? You’d be surprised.

Sadly, there are people out there looking to take advantage of students looking for help paying for college. Most scholarship providers are legit, but the U.S. Department of Education publishes a guide to help keep students safe. Here is what to avoid when searching for financial aid help.

Beware of “guaranteed” scholarships. No college scholarships are guaranteed. Merit aid from colleges may be designated for certain types of students, but for those cases you should only be dealing directly with the college. Any third party offering “guaranteed” scholarships may be out for something else. Scholarship winners are typically chosen by committees and groups from a pool of applicants. No “scholarship provider” can guarantee the money.

Don’t give out credit card or bank account information. Someone asking for this information is fishing for personal information. What should be a deposit could quickly turn into an unauthorized withdrawal. Real scholarship providers will write a check to either you or the college you are attending. Even if you are a “scholarship winner,” they shouldn’t need your bank account or credit card information.

Avoid application fees or seminar costs. The government says it best: “Free money shouldn’t cost a thing.” You shouldn’t have to pay application fees or processing fees. Likewise, “scholarship seminars” that charge money for scholarship advice or applications should be avoided.

You don’t have to pay back scholarships. Students may take out loans to help pay for college. These you are expected to eventually pay back. But scholarships give students money for college. That’s it. No interest rates. No payment plans.

If you didn’t apply for a scholarship, you didn’t win a scholarship. Be wary of any letters or e-mails that claim you’ve won something you didn’t apply for. Again, scammers are just fishing for your personal information, and they may even use official sounding words like “National,” “Foundation” or “Division.” Be cautious about clicking links in these emails as they could be loaded with viruses.

Most scholarship providers are legit, but an ounce of prevention goes a long way. Cappex is constantly working extremely hard to provide a growing list of reputable scholarship opportunities.