Avoid Financial Aid Scams

Students and parents looking for ways to pay for school are scammed for over one hundred million dollars every year. Many of these financial aid programs seem legitimate, but in reality, people pay a substantial amount of money for no apparent benefit.

Scholarship Scams are common and it is important for potential students to be weary of their existence. The most common way people are scammed is through fee-based scholarship applications. Know that if an organization wants to give a scholarship, it will not ask the recipient to pay any money in exchange. Scholarships and grants are free money. There is no payment needed. Some scholarship scams collect money and run with it, while others collect a large amount of money and then give back only a small portion of the proceeds. Both of these tactics are illegal and both are something to watch out for. Even organizations that charge a fee to match students with scholarships are not legitimate.

Another common financial aid scam is called advanced-fee loan marketing. Scam artists will place an advertisement that says that they offer an unusually low interest rate on school loans. What these ads don't say up-front is that there is an application fee or a certain amount of `down payment` that students must provide to guarantee the loan. These are all bogus ploys used to manipulate people.

The best tip that will help keep you from being a victim of these kinds of scams is don`t ever pay money to get money.