What to Avoid

College Loan and Scholarship Scams
Need a college loan or scholarship? Be careful. Families and students lose literally millions of dollars every year to financial aid and scholarship scams. Many pose as a private scholarship or college loan service. There are many legitimate private scholarship services that offer a large internet database of scholarships and then match scholarships with students. If you spot one you think you would like to work with, call the Better Business Bureau or a state attorney general's office to make sure they are credible. You can check out the Federal Trade Commission for information, or to file a complaint.

Here, from the FTC, is a list of tell lines of scholarship and college loan scams:

1. “This scholarship is guaranteed or your money back.”
2. “This information is available nowhere else.”
3. “I need a credit card number or a bank account number to hold this scholarship for you.”
4. “You have been selected by a 'national foundation' to receive a scholarship.”
5. “You're a finalist!” in a contest you never entered.

Identity Theft
When you apply to a school or to a financial institution for a scholarship or college loan, they will require your Social Security number as well as other personal information about you. In the wrong hands, that information can be used to open new credit card accounts and run up balances, obtain false identification, take out loans, travel the world, commit crimes and in general devastate your credit and destroy your good name.

The best thing you can do is to protect yourself. There is no need for any business to have your Social Security number; there are other forms of ID that are equally valid. Don't give any personal information to anyone who calls you or emails you for a grant, college loan or scholarship.

You can apply for federal student aid online, at the U.S. Department of Education website. You must complete the Free Application For Federal Student Aid.

This government website is encrypted to protect your information. If you do run into difficulties or are suspicious of certain entities having to do with student financial aid such as a scholarship or a college loan, contact the U.S. Department of Education's Office of Inspector General Hotline.

Need a college loan to finance your online degree? Check out all of your options in the Financial Aid Guide.