Post by Scambuster on Nov 17, 2009 13:16:46 GMT -5
You need to be aware of student loan scams in your quest to obtain money for college. With tuition bills skyrocketing, and room and board going through the roof, students and their families are looking for creative ways to finance a college education. Unfortunately, in their efforts to pay the bills, many of them are falling prey to scholarship and financial aid scams.
According to the Federal Trade Commission, unscrupulous companies running student loan scams guarantee or promise scholarships, grants or fantastic financial aid packages. These scammers use high pressure sales pitches at seminars where you're required to pay immediately or risk losing out on the "opportunity." That is usually a sure fire sign of a scam.
Other companies guarantee that they can get scholarships on behalf of students or award them "scholarships" in exchange for an advance fee. Most offer a "money back guarantee"- but attach conditions that make it impossible to get the refund.
Watch for student loan scams that provide nothing for your advance fee - not even a list of potential sources; while others tell students they have been selected as "finalists" for awards that require an up-front fee.
Many times, these companies ask for a student's checking account to "confirm eligibility," then they debit the account without the student's consent. Other companies may quote only a relatively small "monthly" or "weekly" fee, then ask for authorization to debit your checking account - for an undetermined length of time.
The FTC cautions students to look and listen for these tell-tale lines that alert you to a possible scam:
* The scholarship is guaranteed or your money back." * "You can't get this information anywhere else." * "I just need your credit card or bank account number to hold this scholarship." * "We'll do all the work." * "The scholarship will cost some money." * "You've been selected" by a "national foundation" to receive a scholarship - or "You're a finalist" in a contest you never entered.
If you attend a seminar on financial aid or scholarships, follow these steps to avoid student loan scams:
* Take your time. Don't be rushed into paying at the seminar. Avoid high-pressure sales pitches that require you to buy now or risk losing out on the opportunity. Solid opportunities are not sold through nerve-racking tactics. * Investigate the organization you're considering paying for help. Talk to a guidance counselor or financial aid advisor before spending your money. You may be able to get the same help for free. * Be wary of "success stories" or testimonials of extraordinary success - the seminar operation may have paid "shills" to give glowing stories. Instead, ask for a list of at least three local families who've used the services in the last year. Ask each if they're satisfied with the products and services received. * Be cautious about purchasing from seminar representatives who are reluctant to answer questions or who give evasive answers to your questions. Legitimate business people are more than willing to give you information about their service. * Ask how much money is charged for the service, the services that will be performed and the company's refund policy. Get this information in writing. Keep in mind that you may never recoup the money you give to an unscrupulous operator, despite stated refund policies.
The FTC says many legitimate companies advertise that they can get students access to lists of scholarships in exchange for an advance fee. Other legitimate services may charge an advance fee to compare a student's profile with a database of scholarship opportunities and provide a list of awards for which a student may qualify. There are also scholarship search engines on the World Wide Web. The difference is legitimate companies never guarantee or promise scholarships or grants.
Keep on the lookout for student loan scams. Protect yourself and don't be afraid to ask questions and expect honest answers.
According to the Federal Trade Commission, unscrupulous companies running student loan scams guarantee or promise scholarships, grants or fantastic financial aid packages. These scammers use high pressure sales pitches at seminars where you're required to pay immediately or risk losing out on the "opportunity." That is usually a sure fire sign of a scam.
Other companies guarantee that they can get scholarships on behalf of students or award them "scholarships" in exchange for an advance fee. Most offer a "money back guarantee"- but attach conditions that make it impossible to get the refund.
Watch for student loan scams that provide nothing for your advance fee - not even a list of potential sources; while others tell students they have been selected as "finalists" for awards that require an up-front fee.
Many times, these companies ask for a student's checking account to "confirm eligibility," then they debit the account without the student's consent. Other companies may quote only a relatively small "monthly" or "weekly" fee, then ask for authorization to debit your checking account - for an undetermined length of time.
The FTC cautions students to look and listen for these tell-tale lines that alert you to a possible scam:
* The scholarship is guaranteed or your money back." * "You can't get this information anywhere else." * "I just need your credit card or bank account number to hold this scholarship." * "We'll do all the work." * "The scholarship will cost some money." * "You've been selected" by a "national foundation" to receive a scholarship - or "You're a finalist" in a contest you never entered.
If you attend a seminar on financial aid or scholarships, follow these steps to avoid student loan scams:
* Take your time. Don't be rushed into paying at the seminar. Avoid high-pressure sales pitches that require you to buy now or risk losing out on the opportunity. Solid opportunities are not sold through nerve-racking tactics. * Investigate the organization you're considering paying for help. Talk to a guidance counselor or financial aid advisor before spending your money. You may be able to get the same help for free. * Be wary of "success stories" or testimonials of extraordinary success - the seminar operation may have paid "shills" to give glowing stories. Instead, ask for a list of at least three local families who've used the services in the last year. Ask each if they're satisfied with the products and services received. * Be cautious about purchasing from seminar representatives who are reluctant to answer questions or who give evasive answers to your questions. Legitimate business people are more than willing to give you information about their service. * Ask how much money is charged for the service, the services that will be performed and the company's refund policy. Get this information in writing. Keep in mind that you may never recoup the money you give to an unscrupulous operator, despite stated refund policies.
The FTC says many legitimate companies advertise that they can get students access to lists of scholarships in exchange for an advance fee. Other legitimate services may charge an advance fee to compare a student's profile with a database of scholarship opportunities and provide a list of awards for which a student may qualify. There are also scholarship search engines on the World Wide Web. The difference is legitimate companies never guarantee or promise scholarships or grants.
Keep on the lookout for student loan scams. Protect yourself and don't be afraid to ask questions and expect honest answers.