“Give Me Your Credit Card;” How To Avoid Financial Aid Scams

February 23, 2011 by Paul Richlovsky

Financial-aid and scholarship searches can be hard enough, but when scammers enter the picture, it’s a whole new ballgame. As recently noted in The Washington Post’s “Answer Sheet” blog, certain individuals can be deceptive when offering scholarships, though it is legal for for-profit companies to charge for scholarship information. What for-profit companies cannot do, via Valerie Strauss’ blog post:

• “collect fees but never provide the information”
• “misrepresent themselves as a government official”
• “guarantee they’ll get the student full funding for college”

For additional guidance, see the section of the Federal Trade Commission’s website devoted to scholarship scams, which includes a list of actual companies that have faced legal action. (Look past the frequent use of juvenile $ signs in place of the letter s; this site really does have some authoritative information).

Making money on FAFSA
Beyond scholarships, a whole cottage industry exists to fraudulently (or otherwise unscrupulously) charge for filing the free FAFSA federal financial aid application or push fake scholarships. One case in point: misspelled online searches.

As Strauss points out, if you misspell “FAFSA” as “fasfa” or “fasa” (pretty easy to do), you may find various websites that will take your money for filing the form or even file the wrong form. For clarification, the URL for the real FAFSA is: http://www.fafsa.ed.gov.

Conducting some experiments, I noticed that Google can be helpful, too, usually redirecting various versions of the misspelled “fasfa” with the real FAFSA (though the paid ad for “fasfa.com” still shows up):

These financial aid scams are similar to the free credit report ones, where you need to go to annualcreditreport.com for the actual free reports, not freecreditreport.com or the other similarly named sites that charge you for the same service.

Related rip-off story
On a personal note, I once experienced another form of this particular capitalistic opportunism. Many years ago as a naive young man, I was looking at some federal government jobs and came across a classified ad in the local paper that promised to open the door to federal government employment. Having been searching mostly fruitlessly for a while up until that point, I impulsively grabbed the phone in a moment of weakness and ordered the “exclusive” materials with my credit card. Almost immediately I realized my mistake and called back to reverse the expensive transaction. The company wouldn’t budge, and eventually I caved and got a thick book of documents in the mail that basically outlined everything I had already found for free at my local library or on the Internet. The classic line the company reps fed me when I called back again to protest:

“Don’t worry about the cost. Your first day at your new government job will pay for that.”

“Gee, thanks.”

Consider yourself warned.