Enrolling in college is a positive step in anyone’s life, but it also paints a bull’s eye on students’ backs for opportunists looking to take advantage of their optimism and eagerness to succeed. Here are eight scams that college students in particular might be susceptible to. (Shell games and Three-card Monte, it goes without saying, are to be avoided.)
1. Bogus Scholarship Help
Some companies prey on incoming college students by promising to find scholarships to pay for their schooling. Typically, this involves the student (and more importantly, the parents) attending a seminar that promises “insider information” that will get students the perfect scholarship. The company then uses high-pressure sales techniques to get you to pay on the spot for its services. But, according to the Federal Trade Commission, here are some signs that this might be a scam:
- The company offers a money-back guarantee that you’ll get a scholarship. No company can guarantee what a legitimate scholarship committee will decide, and there is probably fine print making it nearly impossible to get your money back if you don’t get a scholarship.
- As far as scholarships go, there is no “insider information” that’s unavailable anywhere else, so any promises of such is a good indication of a scam.
- If the company asks for your credit card or bank account number to “hold the scholarship” or to “confirm eligibility,” run for the hills.
- Be wary of companies that offer to “do all the work,” i.e., filling out the application (even the essay!) for you.
- If the company claims that the scholarship itself — as opposed to the company’s service of helping you apply for the scholarship — will cost money, don’t believe them. Scholarships should be free to apply.
- Don’t fall for phone calls or letters telling you that you’ve been “selected” to receive a scholarship — or you’re a “finalist” in a contest you never entered — and then ask you for an up-front fee.
That said, there are legitimate companies that offer help with scholarships. Some offer to get students access to lists of scholarships, while others compare a student’s profile with a database of scholarship opportunities and provide a list of awards for which a student may qualify. While these services may charge up-front fees, legitimate companies don’t use high-pressure sales techniques or make guarantees that students will get scholarships.
2. Fake Grants
In this scam, students receive checks in the mail that are labeled “free grant money” and are told to deposit the check and then wire a portion of the money back to pay for processing fees. The check usually turns out to be counterfeit, but by that time, students have already wired the money. Most legitimate forms of grant money are sent directly to universities, not to students or parents. Bottom line: don’t trust any unsolicited checks.
3. Fake Roommates
This works similarly to the fake grants scheme. Students are targeted because they often A) need money and B) need roommates. After you place an ad for a roommate or for someone to sublet an apartment, you receive a communication from someone saying that they’re unable to show up for the first week or so of the lease but they will send you a check or money order for MORE than what you’re asking. They tell you to keep what you need and send back the amount left over. A variation of the scam is that the person’s employer is sending you the money, and the person wants you to send him/her the leftover amount for traveling expenses paid for by their company. In either case, the check or money order will appear to clear long enough for you to send back a payment, only for you to be told by your bank that the check was fake.
4. Deceptive Student Loan Practices
Here are some warning signs when applying for a private student loan (as opposed to a federal loan backed by the government):
- Charging you to fill out or purchase a Federal Application for Student Aid (FAFSA) is a sign of a scam. This application is free to complete and submit.
- Don’t fall for promotions or incentives like gift cards, credit cards and sweepstakes prizes. Loans with incentives might not be scams, but a gift card won’t make up for poor loan terms with high interest rates. Do your homework before applying.
- After you get a loan, be wary of official-looking documents you receive in the mail marked “confidential” or “open immediately” that suggest that you are to start making payments immediately. If you don’t recognize the name of the company or bank, don’t respond. Often, these are just tricky advertisements that try to mislead you with seals, logos and names to make you believe that they’re representing either a private lender or a federal agency. The US Department of Education doesn’t solicit consumers to borrow money.
- Don’t give out personal information unless you know with whom you are dealing.
We’ve covered this a few times already. This is a particular problem for online students. Here are some tips for spotting a diploma mill (i.e., a fake university offering a worthless degree) and finding out if a school is accredited, or else this might happen to you.
A lot of summer internships don’t pay a salary, but it should go without saying that if an internship requires YOU to pay IT, find employment elsewhere. Beware also of jobs with complicated contracts that make it all too easy for you ending up owing them money by the end of the summer. University Painters, a company that has employed students in several states over the years, is one company that’s had a number of complaints, as this news story shows. (Perhaps because of the trouble, they’ve cut down on student employment in favor of full-time, non-student employees.)
7. Essay/Term Paper Scams
More and more companies are popping up online offering to sell students quality papers so that they can get a good grade with no work. While there are reputable essay-writing companies out there (as reputable as a company that facilitates cheating can be), not only can you get scammed by buying from these companies — by receiving a poorly written or plagiarized product or one that is past the deadline — you can also get scammed by writing FOR them — through bogus fees and fines. (Keep in mind that as these services become more popular, schools are becoming more savvy in identifying purchased material, including the use of anti-plagiarism software. If caught, you’ll lose much more than the money you paid for the paper.)
8. Work-from-Home Scams
College students are always on the lookout for extra money, and online students in particular might find themselves lured in by work-from-home scams advertised on the Web. These ads often promise a lot of money for a minimum of work doing menial tasks from home (“Earn $1,000 dollars a week stuffing envelopes!” or “Earn $500 a day taking surveys!”). They typically ask you to send them money up front as either a “starter’s fee” or to buy a kit explaining the details. If you even get anything in the mail from them, though, chances are it will prove useless, outlining a theoretical business plan that has little chance of success. Most legitimate businesses won’t charge you any up-front fee to work for them. And most legitimate businesses will tell you point-blank that this isn’t a way to get rich quick. In fact, most genuine work-from-home opportunities — such as taking online surveys — will at best provide just a little extra spending cash, maybe $20 to $100 a month. More involved schemes, like multi-level marketing companies that require you to recruit others (and thus earn a percentage of what they earn) are not only potentially pyramid schemes (illegal in the US), but they’re also a good way to alienate any friends and family you drag into the convoluted mess.