How to Avoid Financial Aid Scams

financial aid scams


Preparing for college is an exciting, yet trying, time. From writing college application essays to applying for financial aid, there is much to be done and so little time to do it all. Unfortunately, many people know this, and they try to take advantage of overworked, stressed students and parents in the form of financial aid scams. The good news is, it’s easy to protect yourself from many of the most common scams — all it takes is knowing the signs of a scam… and a little common sense! Make sure you don’t fall victim to a financial aid scam by following these guidelines:

Never Pay to Play

One of the biggest signs of a financial aid scam is when you are asked to pay a fee of some kind. This can take the form of:

  • Fees to submit your application
  • Fees to access a website
  • “Upfront,” “processing” or “handling” fees

If you are asked to pay a fee of any kind, it’s time to walk, or click, away. The FAFSA is the only application you need to submit in order to apply for government-awarded financial aid, and it becomes available in North Carolina every year starting on October 1. FAFSA stands for “Free Application for Federal Student Aid,” and, in case you didn’t catch it in the name, it’s ALWAYS FREE. You can fill yours out at

Keep Your Information Safe

You’ve seen the commercials. Identity theft is real, and it can happen to you if you aren’t careful. Once your personal information is stolen, it can take years or even decades to recover your losses. It can even make you more vulnerable to future attacks. Protecting your personal information is as easy as:

  • Using secure usernames and passwords
  • Keeping your FSA (Federal Student Aid) ID private
  • Never giving out personal information over the phone or internet unless you are the one who made the contact
  • Never giving out personal information on an insecure site — a secure site, such as, will always begin with “https://.”

Say “No” to Pre-Approval

You cannot be pre-approved for financial aid. This is simply not how it works. To be considered for financial aid from the federal and state government, as well as from your school, you must submit the FAFSA. If you are told that you (or your child) has been pre-approved for financial aid or a scholarship, this is a sign of a financial aid scam. Be smart: Don’t take the bait! And remember, if something seems too good to be true, it probably is.

Don’t Get Hung Up on a Phone Call Scam

One common financial aid scam happens when your student receives a phone call with some exciting news — the caller explains that your student has been awarded a college scholarship or grant! The caller will then request your student’s bank account information and other personal information in order to begin processing the award. This is a scam designed to steal your money. A legitimate organization will never request bank account information over the phone, and a legitimate scholarship award will never require a “processing fee.” If you receive a phone call like this, hang up immediately.

Be Wary of the Seminar-Like Sales Pitch

It’s not uncommon for high schools and local organizations to provide senior students and their parents with information sessions about applying for college and financial aid. These are wonderful tools and we advise students and parents to take advantage of the information their school can provide.

However, sometimes students will receive mailers about “free” financial aid seminars they can attend, and these seminars are very different from the information sessions provided by your high school. These seminars are designed to instill fear in students and parents. They typically begin with a presentation on how difficult it is to receive financial aid and pay for college. Then, parents and students are pressured to pay for a service that will help them find the financial aid they need. Remember, if someone is asking you to pay a fee for financial aid, it’s time to walk away.

Unfortunately, there will always be tricksters trying to take advantage of the financial aid system and profit from worried parents and students. Luckily, they aren’t hard to spot when you know the signs of a scam. When looking for financial aid, keep these tips in mind and you won’t have to worry about being duped.

Related: Don’t Get Hooked

Related: Don’t Get Scammed on Your Way to College