Student Financial Aid: Six Scams and Myths

financial aid scam consumer allyWhen you're hoping for some help to pay for college you'll be in the crosshairs of scam artists looking to take advantage of your vulnerability.

Tuition assistance, in the form of scholarships, is not only hard to get -- but competition can be fierce when annual tuition bills can run upward of $50,000 a year. The desire to get financial help for that pursuit means consumers need to be on guard when opportunities appear to present themselves.

So, Consumer Ally is sharing a list of scams and myths about student financial aid that New York officials compiled to help families avoid falling victim to scammers.Use common sense and be on the lookout for these six scams and myths tied to college financial aid, thanks to the New York State Higher Education Services Corporation.

  • Credit Card Scams: Financial aid advisers warn against giving your credit card information to any fee-based, scholarship-finding service that claims it needs them up front. You may be setting yourself up for unauthorized charges, even identity theft. Get information about the agency's services in writing, and don't buy into reasons such as: the agency needs a credit card number to "hold" your scholarship.
  • Inside Information: Officials say there are no secret sources of federal or state student aid, so don't pay for services that purport to have access to it.
  • Guaranteed Success (for a fee): If a scholarship-finding agency tells you that they can guarantee success for a fee, that's a story that's probably too good to be true. On the sponsor side, financial aid officials warn that legitimate scholarship sponsors do not guarantee an award because you paid them a fee.

  • The Secret Federal Formula: Paying someone to fill out the Free Application for Federal Student Aid probably won't get you better results, officials say. Funding via the FAFSA is based on financial need and expected family contribution. Financial aid advisers say that awards, based on this information, are the same no matter who does the work.
  • Unclaimed Scholarship Dollars: This myth implies that you might be able to scoop up funding that others have left on the table. However, officials say that about 85% of what is typically described as "unclaimed" scholarship dollars actually consists of employee-paid education benefits, not generally available funds.
  • You Have to Be An "A" Student: It certainly helps to earn those "A"s, especially in the case of academic scholarships, but financial aid officials remind applicants that scholarships also exist for community and extracurricular activities, skills and talents.

For more tips and advice, start with the U.S. Department of Education's student aid website and consult your state's website to see what other student financial aid services might be available to your family.

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