Scammers target students searching for scholarships and grants

InvestigateTV - Scholarships and grants play a vital role for prospective students. According to the non-profit research group Education Data Initiative, scholarships and grants cover about 25% of education costs every year. 

The latest report from the Office of Inspector General (OIG) at the U.S. Department of Education (DOE) highlights bad actors tapping into that need for funds with a wide range of scams and fraud.

The OIG’s report gave examples of different types of financial aid frauds:

- In Florida a former financial aid officer was indicted and arrested on charges of theft of around $300,000 after allegedly convincing students to return excess Pell Grant funds.

- In California four people pretending to be from a debt relief company were sentenced for fraud after they contacted over 380,000 debt relief student loan borrowers claiming they were associated with the Dept. of Education. They promised to reduce or eliminate borrower’s federal student loan debt.  Instead, the OIG says they stole more than $6.1 million dollars from unsuspecting victims.

According to Sarah Wetzel with the Better Business Bureau, students searching for financial help are prime targets for scammers offering fake scholarships, grants or loans.

“What usually happens is they send you a check and say here’s your scholarship, deposit it and you do have to send back “X” amount of dollars for fees or taxes,” Wetzel said. “Come to find out that check will be fake, it bounces and any money that you send, you’ll be out of that money.”

Wetzel warned that fraudsters may slightly change the name of a legitimate organization to bolster their credibility. She advised to always verify any organizations that reach out to you offering free or easy scholarships or grants and ask how they got your name and contact information.

The Federal Trade Commission offers free advice on how to avoid scholarship and financial aid scams. You can also report suspected scholarship or grant fraud or scams to the OIG here.

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