There are many financial aids available Report Scam for you to get funding for your education, but be aware that there are also many college money scams around who are looking for opportunities to cheat your money. You should be careful when searching for financial aids to avoid falling into the traps of college money scams.
Generally, college money scams come in two forms. First is federal or private loans scams, and the second scam is related to scholarships or the free money that offer to students without the need to pay back. Most often, the loans scams mail their offers directly to students’ or parents’ homes, demanding money upfront, usually they will ask you to pay for some forms of processing fees before they pay out the fund.
Whereas, the scholarship scams mail or email their offer to you telling you that you have won a scholarship or you have been offered with some amount of scholarships, and you need to secure it as soon as possible if you would like to accept the offer by paying some upfront fee.
According to The Federal Trade Commission investigation on financial aid cons, scholarship or loan scams typically cheat individuals out of $50 to $1,000 in term of upfront fee without offering any financial aids to those applicants. The investigation results show that over 100,000 families are being swindled out yearly and it on the rise.
The situation may become worse due to today’s credit crunch, the college money scams may take advantage of fewer lenders being in the market, and more families need financial aids for their children’s college study.
So, how do you recognize a scam? Sometimes, it hard to differential between the legitimate loan/scholarship providers than the swindlers, but try to avoid any offer that sounds too good to be true, and watch out for letters with typos or companies that don’t provide any contact information. Here are specific college money scams to be aware of:
1. The college money scams send letters on loans offers using letterhead that look very similar to the Department of Education. They fake the letterhead of those legitimate organizations, to make them look legitimate. The fact is the Department of Education doesn’t solicit consumers to borrow money, so any mail received from the Department of Education should be illegitimate and it definitely is from a college money scam.
2. You may also receive letters offering you with private or federal loans, but in order to secure the money, you need to pay an application, processing or service fee. The catch is that a legitimate offer doesn’t ask you to pay upfront fee. The rule of thumb, any offer that requires you to pay upfront fee, then you should be very careful to watch out for the potential scams.