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Last Update: Saturday, July 7th, 2012

How to Avoid Financial Aid Scams

Tom Anderson Written by Tom Anderson on July 7th, 2012

Contributing author for MyOnlineColleges.com

 

There have been some financial scams that is a major cause of worry and eventually financial disruption for students and their parents. The needy students are always looking for a way to lighten their burden of paying large amounts of tuition fees, so they faithfully sign the legal papers to get financial aid. However, their comfort turns out to be a nightmare when they get to know that they have actually been scammed and are made to pay thousands of dollars each year.

Types of Financial Aid Scams

Some of the most common financial aid scams are as follows:

Fee-based scholarship scam – The students that are in need of scholarships often get lured by some fraudulent organizations that promises to get their scholarship grant application passed. They charge them some amount of money and assure them of scholarship. However, when they come to know that they have been duped their world comes crashing down. Such organizations collect money from many such needy families and then abscond.

Advance fee loan scam – There are some scammers that put up false advertisements offering student loans at low interest rate. As a supposed security measure, they ask them to pay a certain amount of money but then they run off with all the money collected from students.

Scholarship award scam – This type of scam is usually done via the internet. The scammers send out emails to prospects informing them that they are eligible for a scholarship. However, to avail it they are asked to pay a redemption or disbursement fee so that they are granted the full scholarship amount. What next? The scammers stop responding to their emails and vanish in thin air.

Avoiding Financial Scams

The first and most important tip to avoid financial aid scams is to stop paying any “processing”, “redemption” or “disbursement” fee for getting financial aid. The organizations that are genuinely offering financial aids will never ask you for processing fees as they are already aware of your financial condition. So you should always be aware and stay far off the scammers’ way.

 

*Free image courtesy of FreeDigitalPhotos.net


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