Beware of financial aid scams targeting unsuspecting students and borrowers
The Pennsylvania Higher Education Assistance Agency is warning students and borrowers to be wary of financial aid scams that could expose them to identity theft and significant financial loss.
In one recent example, scammers are fraudulently representing themselves as known student loan servicers through social media in order to obtain personal information by claiming that a student is “eligible” for total student loan forgiveness.
The most effective way to avoid becoming the victim of a scam is to be alert and vigilant when asked to provide any form of personal information or when engaging in financial transactions.
Recent scams include:
Student loan forgiveness scams - Companies or individuals claim to reduce or eliminate student debt in exchange for money. Loan forgiveness programs have specific eligibility requirements. No one can guarantee forgiveness in exchange for a fee.
Tuition scams - These involve someone claiming to work for your school's administrative office, calling to warn you that your tuition is late and you risk being dropped from class unless you pay immediately. If you are contacted about anything involving money, end the call immediately and contact your school directly in order to check the status of the alleged problem.
Unnecessary fees for service – While not necessarily a scam, beware of anyone charging a fee in exchange for application completion, a scholarship, debt counseling, or almost anything else. In most cases, it is either a scam or you are being charged for something that you can easily access for free.
There are several steps you can take to protect yourself from fraud and scams. The Consumer Financial Protection Bureau recommends the following tips to avoid scams:
Don’t share your Social Security number, credit card information, or account passwords.
Never pay up front for a promised prize. It’s a scam if you are told that you must pay fees or taxes to receive a prize or other financial windfall.
After hearing a sales pitch, take the time to compare prices. Ask for information in writing and read it carefully.
Too good to be true? Ask yourself why someone is trying so hard to give you a “great deal.”
If it sounds too good to be true, it probably is.
Watch out for deals that are only “good today” and pressure you to act quickly. Walk away from high-pressure sales tactics that don’t allow you time to read a contract or get legal advice before signing. Also, don’t fall for the sales pitch that says you need to pay immediately, for example by wiring the money or sending it by courier.
- Put your number on the National Do Not Call Registry. Go to www.donotcall.gov or call 1-888-382-1222.
If you believe that you have been targeted or victimized by a scam, please contact the Pennsylvania Department of Banking and Securities, the CFPB, or the Federal Trade Commission.
Video tutorials explaining the student aid process and types of aid available can be found at YouTube.com/PHEAAstudentAid.