According to the U.S. Department of Education Office of Federal Student Aid (FSA), between 17 and 18 million students in the U.S. apply for financial aid using the Free Application for Federal Student Aid (FAFSA) each year. That’s just over 70% of all students! While Pell Grants and Federal Student Loans are real, and scholarships can help pay for school, there are criminals out there who are eager to steal your money, identity, and calm. Let’s take a look at some of those scams and how you can protect yourself.
Start Your Student Loan Search with FAFSA
The government offers a free application to apply for student loans and grants. THERE IS NO NEED TO PAY ANYONE TO HELP YOU APPLY FOR STUDENT FINANCIAL AID. Of course, there are people out there who will be glad to help you apply, but those are mostly scams designed to take your money. These financial aid application-for-a-fee services will guarantee better results, but really, you won’t get anything more out of them than you would doing it yourself.
The free, online form to apply for federal student aid (including grants and loans) is available at STUDENTAID.GOV. Or click here to start your free online application. The free application will ask you specific questions about the student and parental income, list all your funding options, and share accurate information about grants and loan options. If you have questions, they are there to help.
Don’t Pay for Scholarship Advice or Searches
Whether you’re a student or a parent, you’re going to receive offers that promise to help you find scholarships for a fee. Don’t pay these companies anything. Instead, start with your high school or college. They will have the resources you need to start your search for free. Plus, there are plenty of online resources that don’t charge a fee, including Fastweb, Scholarships.com, and Scholarships360.
Do Your Research BEFORE Borrowing Money for School (or Consolidating Student Loans)
Every year, nearly 40% of all college undergraduates borrow money for school, according to data from College Board Research. Today, total student loan debt sits at $1.87 trillion. With that kind of money to be swindled, there are criminals and less-than-trustworthy lenders out there offering fake loans, consolidation loans for exorbitant fees, and loan options that include exceedingly high annual percentage rates and fees.
To avoid being taken by a student loan scam:
- Talk only to the loan servicer assigned by the U.S. government to your federal student loan. If you qualify for and accept a federal student loan, only communicate with the servicer assigned to your loan.
- Carefully examine all student loan offers. Private lending companies or debt relief services will use any means possible to trick you into borrowing money from them. Some criminals have even employed fake government seals and websites. If any lender claims to be officially endorsed or approved by the federal government, delete the email or shred the offer.
- Visit your college’s financial aid office. They will have a list of preferred lenders that will do what they can to help you find affordable funding.