Sorry, there’s no Tyler Perry scholarship
Be wary of back-to-school financial scams.
Entertainment mogul Tyler Perry does not have a scholarship waiting to help you go to college. No matter what you might spot on Facebook.
As the deadline for college tuition payment approaches, students might be tempted to fall for some fishy quick fixes to raise cash. And many others might be tricked into thinking they’ve just run into a solution to pay off college debt. While college students and their parents are hunting for ways to pay for school, scammers are crafting even more ways to rip them off.
Here are warning signs for scams relating to college scholarships and student loans.
❚ The student loan rip-off: College students may hear about an easy way to make money for college via email or social media.
And many times, fraudsters reach out to students directly through an acquaintance or at a party offering a quick way to make some cash.
The scammers, though, ask the student to provide their online banking login, according to Deidre Davis, chief marketing officer for the Michigan State University Federal Credit Union.
The idea is that the money would be put directly into the credit union or bank account. The student sees some more money online and then is asked to pay fees upfront via a Google Play gift card, iTunes gift card or other gift cards.
The student figures he or she is not out any money since they did see that money was deposited into the account. So they buy the gift cards. Often, they’re asked to read the numbers on the gift cards over the phone so the con artists have quick access to the money.
But the check the fraudster deposited is likely bad. And the money that appeared to be in the account is soon gone. And you’re out whatever you put on the gift cards, too. Once fraudsters have access to the student’s account, it is possible that they could get access to their savings, too.
❚ The debt-relief student loan scam: One Michigan consumer complained in April that he received a call from someone who told him he qualified for the “Obama Forgiveness” plan relating to student loans, according to a complaint made to the Better Business Bureau serving Eastern Michigan.
The consumer gave his Social Security information and debit-card information to the caller to participate in a plan to reduce his college debt. But later his sister told him that he might have fallen for a scam. He called the U.S. Department of Education and was told they had never heard of the outfit.
The consumer had to call his bank to cancel his debit card. He did not report losing any money, likely because he acted quickly and never bought gift cards.
Borrowers need to be especially aware of bogus claims such as, “Act immediately to qualify for student loan forgiveness before the program is discontinued.” Or, “Your student loans may qualify for complete discharge. Enrollments are first come, first served.”
The Federal Trade Commission initiated a sweep in late 2017 to go after student debt relief companies that made false promises and collected $95 million in illegal upfront fees. Often, scammers will pretend to be affiliated with the government. “Only scammers promise fast loan forgiveness,” the FTC said.
For legitimate federal student loan repayment options, see Student Aid.gov/repay
❚ The FAFSA fee scam: The place to submit a Free Application for Federal Student Aid is www.fafsa.ed.gov — not anything with a dot-com ending.
The U.S. Department of Education notes that several websites offer help filing the Free Application for Federal Student Aid form for a fee.
But those sites are not affiliated with or endorsed by the U.S. Department of Education. And you can get free help filling out the forms, too, including at a college’s financial aid office. You do not want to pay any money to submit a free application. It’s a “free application.”
❚ The hacker attack on 529 plans: The Connecticut state treasurer announced in June that 21 Connecticut Higher Education Trust college savings accounts had been breached, resulting in 44 unauthorized withdrawals total- ing more than $1.4 million. Of that amount, about $440,000 was recovered or stopped. The incident involved ID theft using personal identifiable information gleaned elsewhere.
TIAA-CREF Tuition Financing Inc. fully restored the accounts. While families will not be out any money in this case, it’s important to keep an eye on money in 529 plans in case hackers attempt to gain access in other state plans. Make sure to use different user names and passwords for each online account and change them periodically.
❚ The scholarship scam: Perry took to Facebook in July to warn that he does not have a scholarship program, even though impostors on the internet are claiming otherwise.
The actor and director went on to say that he personally has put a lot of kids through college. But that’s not an official program where people can request college help. “They have been gifts, so don’t let these folks trick you,” Perry wrote. “Do not give anyone any money in my name. This is all a scam. I hope these people get caught.”
The Perry scam is one of many that try to get cash-strapped consumers to pay money upfront in one way or another to get a scholarship.
The Better Business Bureau warns that some scams include “money-back guarantees.” The only guarantee there, though, is you’re looking at a scam.
Beware of any requests for your Social Security number, your credit-card number or your bank account number in connection with any scholarship, said Mark Kantrowitz, publisher and vice president of research for Savingforcollege.com.
Another potential scam: the socalled millions of dollars in unclaimed scholarships. “While there are a few unclaimed scholarships, they go unclaimed because they can’t be claimed,” Kantrowitz said.
For example, there’s a William Zolp Scholarship at Loyola University of Chicago for any Catholic student who was born with the last name Zolp.. Scholarship amounts vary.
“Most years they have eligible students, but some years they have none,” Kantrowitz said.
You can look for scholarship information for free at StudentAid.gov/scholarships.
While college students and their parents are hunting for ways to pay for school, scammers are crafting even more ways to rip them off.