Note that the government has paused all repayment on federally held student loans through the end of 2022, with no interest to be charged during that period and no loans to be held delinquent or in default.
* * *
As if filling out the Free Application for Federal Student Aid (FAFSA) isn’t already stressful enough, there are a variety of FAFSA scams that can cost you money — and cause headaches — if you fall for them.
From impersonating the U.S. Department of Education, to making you pay to submit your FAFSA, there are many manipulations out there ranging from inconvenient to straight-up nefarious. Don’t get scammed out of your cash at a time when you need it most.
Here’s how to spot a FAFSA scam, how to submit your form the right way, and other things to know about this important financial aid document:
Here, in no specific order, are four common con-games used to steal money from student loan borrowers:
- Fee to submit your FAFSA
- Communication from “U.S. Department of Education”
- Financial aid seminars that make promises
- Exclusive scholarships
Technically, it’s not illegal for someone to charge you for help filling out the FAFSA. However, you can do it on your own so there’s no need to incur this expense. Even though it might be intimidating to fill out the FAFSA on your own it’s actually important you know everything you’re submitting on your FAFSA so you don’t inadvertently commit FAFSA fraud. Make sure you’re honest about facts such as your marital status and income.
The real FAFSA site is www.fafsa.gov. Don’t be fooled by fraudulent sites, make sure to always look at the URL because it can sometimes be hard to tell which FAFSA site is real. Some scammers try to make their websites look like the real FAFSA site so that you don’t question them when they charge a fee to submit your FAFSA. The federal government took legal action against some of these sites in 2015, but scammers still continue to find ways to defraud unsuspecting students by mimicking the real FAFSA site. Remember it’s called the Free Application for Federal Student Aid for a reason — it’s free.
The FAFSA is administered by Federal Student Aid (FSA) — an office of the Department of Education — which could explain why some scammers will send false emails, calls and text messages impersonating the federal government in an attempt to get you to pay extra fees or part with important, personal information such as your Social Security number.
Here are some common scenarios scammers try to use when they contact you in this manner:
- Banking information needed: Scammers often ask for your banking or credit card details to “hold” a scholarship for you. A legitimate financial aid offer would never require you to do this.
- Pay a fee to receive the scholarship: If you receive communication asking you to pay a fee in order to receive scholarship or grant money that you have qualified for, this too is a financial aid scam. There are no upfront or administrative fees for legitimate scholarships or grants from the federal government.
- You’re selected as a finalist in a contest you never entered: Some scammers will claim you’ve made it to the final round of a scholarship competition and need to provide personal details or banking information as part of the last round. This is not how the federal government distributes financial aid.
It can be tricky to discern which financial aid seminars are legit because many local schools hold legitimate seminars that are important for students who need to learn more about their federal financial aid options. Not all financial aid seminars are FAFSA scams. The trouble comes when you start looking off the beaten path for seminars that make sweeping claims or that cost money to attend. Here’s how to tell if a financial aid seminar falls into the student scams category.
- High pressured sales pitches: If you’re experiencing pressure to make an immediate purchase decision about any financial service, this is likely a scam scenario, especially if it relates to helping you fill out the FAFSA. Responsible financial services don’t resort to pressure or push you to make a financial decision without thoroughly thinking through all aspects.
- Same service you could get for free: Oftentimes your school will offer financial aid help for free through their financial services offers or from guidance counselors. If you’re at a financial aid seminar that’s trying to charge you for services you could get for free, this should be a huge red flag that it’s a student scam.
- Extraordinary success stories: Be wary if you hear amazing testimonials from people who have used the service and succeeded. Not everyone offering a success story is necessarily honest or legitimate — they could be paid by the organizers of the seminar. Instead, the Federal Trade Commission (FTC) suggests asking for a list of three local families who have used the service in the last year and succeeded. Follow up with these families privately to ask important questions about the service.
Since the FAFSA is free to submit, some scammers have resorted to trying other creative means to get you to pay for part of the process. One of these FAFSA scams is to inform you of other, exclusive scholarships that could be available to you if you pay for the information. The truth is — most information about scholarships is available on the internet already, for free. There isn’t a hidden listing of scholarships that someone is able to find you for a fee.
After you submit your FAFSA legitimately, you’ll be notified of any scholarships awarded to you as part of your financial aid package. You don’t have to pay any extra to get access to these. You can also apply to additional scholarships on your own, but paying for a service to find them for you is likely a waste of your money.
- Use your FAFSA ID: When you start your FAFSA application, you will be asked to enter either your FSA ID or student’s information. Choose the FSA ID option, as this will enable you to log in to your account without having to provide personally identifiable information every time.
- Find out your FAFSA deadline: FAFSA deadlines vary in each state.
- Leave enough time: Get started early, as the FAFSA questions require thorough answers. The last thing you want to do is rush through it.
- Record your income accurately: Do not include student income in family income, a common mistake in FAFSA applications. You don’t want to accidentally commit FAFSA fraud.
- Look for additional paperwork: Just because you finish the FAFSA doesn’t mean you’re done with the process. Your school will likely request that you fill out supplemental forms. It can help to find out what extra forms your school requires at the beginning of the process and create a checklist to make sure you don’t miss anything.
- Be proactive if you’re running late: If you think you’re going to miss the FAFSA deadline, contact the school and see about the possibility of an extension.
- Negotiate on your behalf: Don’t settle for your first offer. You may be able to negotiate a better financial aid package.
- Don’t count yourself out: Do not assume you or your family make too much money to qualify for federal student aid. You never know what you could qualify for, which is why the U.S. Department of Education recommends that every college-bound student fill out the FAFSA, even if you believe your income is above the financial aid limits.
Will FAFSA give me money? You don’t get money directly from filling out the FAFSA. The FAFSA is a tool to help the federal government assess if and how to award you financial aid.
What happens if you commit FAFSA fraud? FAFSA fraud is when you intentionally provide false information on your FAFSA. If the amount of money you’ve fraudulently received is over $200 you could be charged with a felony and sentenced for up to five years in jail or charged up to $20,000 — or both. If it is under $200 you could be charged with a misdemeanor.
What is the FAFSA deadline in my state? Every state has a different FAFSA deadline but you can determine yours by heading here.
Which FAFSA site is real? The real FAFSA site is www.fafsa.gov. The U.S. government also owns www.fafsa.com, but this site will redirect you to the .gov site automatically. There is only one real FAFSA site.
Do I need an FSA ID before I start working on my FAFSA? You don’t need an FSA ID before you start filling out the FAFSA online, but you do need one before filling out the FAFSA using the myStudentAid app. Getting an FSA ID only takes a few minutes and could prevent delays.
If there was only one piece of FAFSA advice you could provide, what would it be? Make sure to apply for the FAFSA even if you don’t think you’ll qualify. Some schools use the FAFSA information to administer scholarships that are not necessarily need-based.
Meredith Simonds contributed to this report.
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1 Important Disclosures for College Ave.
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 9/15/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.47% APR to 13.03% APR (excludes 0.25% Auto Pay discount). Variable rates range from 2.80% APR to 11.69% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.
3 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
4 Important Disclosures for Edly.
1. Loan Example:
About this example
The initial payment schedule is set upon receiving final terms and upon confirmation by your school of the loan amount. You may repay this loan at any time by paying an effective APR of 23%. The maximum amount you will pay is $22,500 (not including Late Fees and Returned Check Fees, if any). The maximum number of regularly scheduled payments you will make is 60. You will not pay more than 23% APR. No payment is required if your gross earned income is below $30,000 annually or if you lose your job and cannot find employment.
2. Edly Student IBR Loans are unsecured personal student loans issued by FinWise Bank, a Utah chartered commercial bank, member FDIC. All loans are subject to eligibility criteria and review of creditworthiness and history. Terms and conditions apply.
5 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
6 Important Disclosures for Funding U.
Funding U Disclosures
Offered terms are subject to change. Loans are made by Funding University which is a for-profit enterprise. Funding University is not affiliated with the school you are attending or any other learning institution. None of the information contained in Funding University’s website constitutes a recommendation, solicitation or offer by Funding University or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.