Halloween! The traditional date for trick or treating. But you should beware every day that tricksters out there want to rip you off before, during, and after college.
Students get $253 billion a year in financial aid, and scammers go where the money is, so rest assured they’re after your aid and other money.
Here’s a common scam. The promise to “find’ sources from which you can apply for aid in return for fees of hundreds or thousands of dollars. What’s delivered is information on federal, state, or private aid programs.
Another example — the U.S. Education Department (ED) reports phishing emails are targeting student accounts that use single factor authentications of student identity. Scammers then redirect deposits from student bank accounts into their bank accounts. This includes deposits of student aid remaining after tuition and fee payments — i.e. your spending money for the academic term.
Schools notify students upon sending aid to their bank accounts. If such deposits aren’t in your account within 3-4 working days, contact your school and, if need be, notify ED.
Those struggling to repay college debts are also fraud targets. Last year, the Federal Trade Commission (FTC) and 11 state attorneys general found scammers that used false promises of debt relief to steal more than $95 million in illegal fees from federal borrowers.
This year, New York sued several so-called debt relief companies that allegedly talked borrowers into making student loan payments to them for $1,000 in fees. And Betsy Mayotte of TISLA tells of a crooked company pretending to do federal student loan debt relief. It tells borrowers that repayment plans tying monthly payments to income are ending, then charges them fees to keep using such plans.
You can always repay your lender — including ED for Federal Direct Loans — at no charge. And income-sensitive repayment plans aren’t ending. It costs nothing to get or keep them. Just call your federal student loan servicer.
It’s not always easy to recognize student aid/loan scammers, so here are some warning signs. They:
- Request up-front fees. No legitimate student aid or loan provider charges up front for its services.
- Seek personal information. Some scammers hope to steal your identity to open fake credit cards in your name.
- Make promises that sound too good to be true, because they are too good to be true!
If you’ve been scammed, file a consumer complaint with the FTC. It may be able to get your money back, or at least warn others of what to watch for.
Suspicious of some offer related to your student aid and loans? Contact College Affordability Solutions for a free consultation.