Outcomes
Financing your college education can be difficult and confusing, and there are people who try to take advantage of students and prospective students. In this section, we will learn about some of the most common scams and deceptive practices and how you can avoid them:
If it sounds too good to be true, it probably is
You should proceed with caution if any of the following is true:
- You are offered something that is hard to believe;
- You are asked to pay for something that should be free (such as scholarship opportunities); or
- You are asked to provide more personal information than is necessary.
You should never have to pay for scholarships, grants, loans, or anything related to the FAFSA or WASFA.
Common signs of student scams include:
- Guaranteeing you a lower loan payment
- Guaranteeing you that your debt will be forgiven
- Promising that you will qualify for a program (without any information from you)
- Charging you for a form
- Charging you for a transaction
- Charging you to consolidate your loans (this should always be free though approved servicers)
- Asking you for your FSA ID information (username and password)
- Putting pressure on you to make a decision immediately or telling you that an offer is only available for a period of time
The Federal Trade Commission (FTC) suggests the following 10 tips for avoiding scams:
- Be wary of unexpected requests for money that seem to be coming from a trusted source (family, government, etc.)
- Search the company online with a keyword like “scam” to see if other people have reported a problem
- Don’t trust the caller ID on your phone (you can always call back a number that you know is correct to double-check information)
- Don’t pay for anything until the service has been provided
- Be wary of requests to pay for something by wiring money (credit cards are a better option because they have built-in fraud protection)
- It is always a good idea to slow down, think about the situation, and talk to someone you trust before making any decision
- Hang up on robocalls
- Be skeptical of free trials
- Don’t deposit a check and wire money back (if the check is a fake, you will need to pay back the bank)
- Sign up for free scam alerts from the FTC
I think I fell for a scam. What should I do?
If you fell for a scam, here are some things you can do to protect your money and your identity:
- Contact your bank or credit union and let them know if you gave away your account information or debit card number
- Contact your credit card company to report fraud if you used a credit card
- Contact ED if you gave away your FSA ID information and they can help you change your username and password
- Make a complaint to:
Check Your Understanding
#1. There is usually free help from your loan servicer, financial aid office, and other loan advocate organizations – be wary of organizations that try to make you pay for their services
The correct answer is True: There is usually free help from your loan servicer, financial aid office, and other loan advocate organizations – be wary of organizations that try to make you pay for their services.
#2. If you think you fell for a scam, you should notify the Federal Trade Commission and make sure you secure any accounts that may be compromised.
The correct answer is True: You should notify the FTC and secure your accounts
Results
Nicely done! It looks like you really understand this module!
If you are still a little confused, you may want to review this module.
