It’s called the Free Application for Federal Student Aid for a reason. Submitting it – for grants, student loans, or work-study programs – doesn’t cost a thing. Of course, that doesn’t stop people from trying to make an easy buck off it, offering to submit the application for students and their families for a fee.
Don’t fall for it. It is not only an unnecessary expense, it could be a FAFSA scam.
Why you shouldn’t pay a FAFSA fee
While it is not illegal for someone to charge you for something that’s free somewhere else, it is completely unnecessary to pay someone a FAFSA fee to submit the application for you. Plus, there are FAFSA scams out there that will rip you off.
Consider two actions the Consumer Financial Protection Bureau (CFPB) took against scammers last year.
Watch out for these FAFSA scams
In July 2015 the CFPB took action against Student Financial Aid Services, Inc. and its operation of FAFSA.com. For obvious reasons, visitors to the website assumed it was the right place to be.
Unfortunately, FAFSA.com was home to scammers who allegedly:
- Led consumers to believe its fee-based FAFSA help included service plan upgrades at no additional cost beyond the initial FAFSA fee.
- Charged consumers $67 to $85 for FAFSA help without consent.
- Didn’t tell consumers these would be recurring subscription charges that would be made to their accounts every year.
In October 2015, the CFPB took action against alleged financial aid scammer Armond Aria and his company, Global Financial Support, which operated under the equally misleading names, College Financial Advisory and Student Financial Resource Center.
The CFPB says Armond and his companies:
- Used marketing materials with logos and seals that suggested government affiliation.
- Included in these marketing materials the name of the student’s college, suggesting the school’s endorsement.
- Used fake deadlines to create a false sense of urgency.
- Charged consumers fees of $59 to $78 for financial aid assistance they never provided
In both complaints, the CFPB requested the companies be ordered to cease these unlawful practices and pay restitution to affected consumers. And FAFSA.com has been transferred to the U.S. Department of Education.
How to spot FAFSA scams
Suggested affiliation with the government: The U.S. Department of Education does not endorse any fee-based financial assistance. The only resources they want you using are the free ones available at FAFSA.ed.gov
Suggested affiliation with your school: If you want FAFSA help from your school, contact the admissions office directly and not through any company offering assistance.
False sense of urgency: Find out the FAFSA deadline in your state.
Insistence the FAFSA can only be submitted through them: In fact, anyone can submit the FAFSA, including you, for free.
Think you’ve been scammed?
Report it immediately. The U.S. Department of Education recommends submitting complaints to both the Federal Trade Commission and the CFPB.
How to submit a FAFSA
First, go to FAFSA.ed.gov
That is the only place you need to go to fill out and submit the Free Application for Federal Student Aid. Click on “Start a New FAFSA App” and you’re on your way.
There are a few key points to keep in mind:
1. 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 login to your account without having to provide personally identifiable information every time.
2. Find out your FAFSA deadline, which varies in each state.
3. Get started early, as the FAFSA questions require thorough answers. The last thing you want to do is rush through it.
4. Note two important changes to the application process, starting with the 2017-18 FAFSA. That’s when applicants will use tax documents two years prior to the academic year for which they are applying (previously one year). Also, starting with the 2017-18 FAFSA, you can submit the application earlier – October 1 of the year prior (previously January 1 of the year for which applications are applying).
5. Do not include student income in family income, a common mistake in FAFSA applications.
6. 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.
7. If you think you’re going to miss the FAFSA deadline, contact the school and see about the possibility of an extension.
8. Don’t settle for your first offer. You may be able to negotiate a better financial aid package.
9. 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.
Beyond FAFSA scams
If you find yourself struggling with student loan debt after graduation, beware of debt relief companies. While there are legitimate ones out there, there are plenty of scammers too. Here’s how to spot the shady ones.
Need a student loan?Here are our top student loan lenders of 2018!
1 = Citizens Disclaimer.
2 = CollegeAve Autopay Disclaimer: All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
|4.04% - 12.66%2||Undergraduate, Graduate, and Parents||Visit CollegeAve|
|4.11% - 12.19%||Undergraduate and Graduate||Visit Ascent|
|3.87% - 11.85%*3||Undergraduate and Graduate||Visit SallieMae|
|2.93% - 9.67%||Undergraduate, Graduate, and Parents||Visit CommonBond|
|3.78% - 11.99%1||Undergraduate, Graduate, and Parents||Visit Citizens|
|4.51% - 9.69%||Undergraduate and Graduate||Visit LendKey|
|3.91% - 11.45%||Undergraduate and Graduate||Visit Connext|