 FAP717: Top 5 Financial Aid Scams
from Financial Aid Podcast Daily Free Internet Radio On Demand
January 17, 2008
FAP717: Top 5 Financial Aid Scams Listen now: Student Financial Aid News + Chronicle: The turmoil in the student-lending industry is beginning to worry some leaders of the nation s public colleges and universities. + The American Association of State Colleges and Universities says that the presidents of several of its member institutions have expressed concern over reports that Sallie Mae (ticker: SLM), the nation s largest student-loan company, is among those facing financial difficulty. + The association s president, Constantine W. Curris, is urging the leaders to stay calm. In a letter dated January 7 and addressed to presidents and chancellors of the state-run colleges, Mr. Curris acknowledged a series of recent news-media reports questioning Sallie Mae s ability to raise necessary funds. + Yet, Mr. Curris told his members, We do not believe that institutions should be alarmed over Sallie Mae s difficulties—inasmuch as the federally guaranteed student-loan program lending banks and agencies have adequate access to capital without needing to have transactions with Sallie Mae. Mr. Curris provided a copy of the letter in response to an inquiry from The Chronicle. + Mr. Curris did offer the association s member institutions one warning, citing efforts by Sallie Mae and other lenders to market private loans—meaning those that lack a government subsidy—directly to students. He cited one case in which the University of Miami was alleged to have given student names, addresses, birth dates, and Social Security numbers to Sallie Mae to help it mail loan solicitations. + Mr. Curris, in his letter to college presidents, cited a series of problems facing Sallie Mae in recent weeks. Those he cited included the company s gamble on speculative futures contracts, its commitment to spend nearly $2-billion on stock worth less than $1-billion, and a failed attempt by Albert L. Lord, Sallie Mae s chief executive, to assure investors about the health of the company. + A spokeswoman for the state-colleges association, Susan M. Chilcott, said that member presidents have been expressing concerns that student-loan availability might dry up because of Sallie Mae s troubles. Mr. Curris sent the letter to inform and clarify, she said. + Scholarships and grants always come first + Then federal student aid + Stafford federal student loans + Parent PLUS loans + Private student loans Scholarship Update + The $10,000 32 second scholarship from the Student Loan Network + Watch the video on YouTube + Join the group on Facebook + Every person you refer is an additional chance to win for you Focus on Financial Aid + Common financial aid scams + 1. Pay for your FAFSA + College Goal Sunday will do the same thing for free + 2. Financial planners and CPAs are available at low cost or no cost from banks and credit unions + If you re going to pay to have your taxes prepared, consider using a CPA rather than a chain, as a CPA tends to have broader knowledge + 3. Scholarship scams - money flows to the student, never the other way around + Asking for things like SSN, bank accounts, credit cards? RUN. + The scholarship is guaranteed or your money back. + You can t get this information anywhere else. + I just need your credit card or bank account number to hold this scholarship. + We ll do all the work. + The scholarship will cost some money. + You ve been selected by a national foundation to receive a scholarship - or You re a finalist in a contest you never entered. + 4. Beware of scholarship scams that are focused on identity theft rather than just getting you to pay + 5. Seminars that have upsells - you know them by sound - learn elite secrets you can t find anywhere else! - Save thousands or millions of dollars! - Get whiter teeth in just a week! (sorry, not the last one) + Are there secrets? Not really. All of the formulas for federal financial aid are public information. They re not fun to read but they re public. + If you do go to a seminar, keep these tips in mind: + Take your time. Don t be rushed into paying at the seminar. Avoid high-pressure sales pitches that require you to buy now or risk losing out on the opportunity. Solid opportunities are not sold through nerve-racking tactics. + Investigate the organization you re considering paying for help. Talk to a guidance counselor or financial aid advisor before spending your money. You may be able to get the same help for free. + Be wary of success stories or testimonials of extraordinary success - the seminar operation may have paid shills to give glowing stories. Instead, ask for a list of at least three local families who ve used the services in the last year. Ask each if they re satisfied with the products and services received. + Be cautious about purchasing from seminar representatives who are reluctant to answer questions or who give evasive answers to your questions. Legitimate business people are more than willing to give you information about their service. + Ask how much money is charged for the service, the services that will be performed and the company s refund policy. Get this information in writing. Keep in mind that you may never recoup the money you give to an unscrupulous operator, despite stated refund policies. Did you enjoy today s show? If so, please consider subscribing for free to get it delivered to you. Subscribing for free means you don t have to remember to download it every day. + Click here to subscribe for free by email + Click here to subscribe for free in iTunes + Click here to add the Financial Aid Podcast to Google Reader or your Google Homepage Direct MP3 file download: Click here to download the MP3 Reminders + Financial Aid Podcast Show Notes at FinancialAidPodcast.com. + Discuss this episode at the Financial Aid Forum! + Free scholarship search secrets eBook at StudentScholarshipSearch.com/ebook + FAFSA form tutorials and free help at FAFSAonline.com + Stafford federal student loans at StaffordLoan.com + Student loan consolidation at StudentLoanConsolidator.com + Private student loans available at any time - visit AlternativeStudentLoan.com + The Financial Aid Podcast is a publication of the Student Loan Network. I want to hear from you! Email me at financialaidpodcast gmail com, visit http://www.FinancialAidPodcast.com, or call 206-350-1208. 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