Financial aid schemes targeting college students

PROVIDENCE, R.I. (WPRI) — More and more schemers are starting to target one group that’s always trying to find financial help – college students and their families.

Those applying for financial aid or scholarships know you have to give out a lot of personal information to an agency you think you can trust, but the warning is simple – make sure you know exactly who you’re dealing with.

Sophomore Jake Corbin went online recently searching for loans and grants – anything to help cut the out-of-pocket school expenses. The next day he received a call about one of his online requests.

Corbin said the man claimed to be with a federal grant program and that he qualified for a $10,000 grant – all the 19-year-old had to do was pay an application fee. The man claimed the government has to see the applicant has at least 10 percent of what’s being applied for, and instructed Corbin to put $1,000 on a Green Dot MoneyPak card and to provide the numbers on the back of the card.

The man then told Corbin if he could come up with another $4,000, he would qualify for a $50,000 grant instead. Unfortunately, he took the bait.

“He said ‘alright, that $50,000 is going to be in your bank in 15 minutes’ and I thought ‘grants don’t work like that.”

Corbin is correct, grants don’t work like that, and that’s why the Better Business Bureau and Federal Trade Commission are warning college students to be on the lookout for phony loan companies.

  • Beware of scholarships that charge an application fee, since legitimate scholarship foundations don’t charge fees.
  • Avoid scholarship services that claim you’re guaranteed to receive money. Most legitimate scholarship programs have no control over who the foundation chooses to get the grant.
  • Be wary of letters, calls, or emails stating you have been selected for a scholarship you didn’t apply for.

The FTC said these kinds of schemes often operate overseas and they have the technology to make the call appear to be coming from a local number.

 

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