Scam of the day – August 7, 2015 – Student financial aid scam

Anyone who has ever applied for a student loan for college expenses is familiar with FAFSA, the Free Application for Student Aid, which is operated by the United States Department of Education.  The office of Federal Student Aid is the largest issuer of financial aid to students in the country through grants, loans and work-study programs.  All colleges use the FAFSA form and it is a primary resource for any student or the parent of any student seeking to find money to cover college expenses.  The office of Federal Student Aid interactive website www.fafsa.ed.gov is a tremendously useful website.  However, scammers operating a company with the name Student Financial Aid Services, Inc. set up a number of websites including FAFSA.com taking advantage of consumer confusion over the name and offering fee-based assistance to students filling out the FAFSA form.  According to the Consumer Financial Protection Bureau (CFPB), when students entered their payment information for certain financial advisory services, the company started billing them for annual renewing subscriptions at costs of between $67 and $85 per year without the students’ knowledge.   According to the  CFPB more than 100,000 students were cheated out of more than 5 million dollars, which now, according to the terms of the settlement will be returned to the victims of the scam.

TIPS

Before paying for help with the FAFSA form, it is always a good idea to take advantage of the free help found at www.fafsa.ed.gov the official FAFSA website of the federal government. Financial aid is a complex matter and students and their families should familiarize themselves with the information available on the real website of the office of Federal Student Aid in order to be an informed consumer.  The settlement with Student Financial Aid Services, Inc.  is still awaiting court approval.  As soon as it is approved, I will let you know about what you need to do to get your check if you were a victim of this particular scam.