(BBB) ​​- During this season, many students are in the process of securing financial aid for the upcoming semester or academic year. While scholarships, grants, work-study, and loans help make college more affordable, scammers take this opportunity to try and steal some of that money through various schemes and scams. Better Business Bureau of North Alabama recommends caution when applying for financial aid opportunities.

Using words like “national” and “federal” to sound more official, scammers typically pose as a financial aid representative from the government, university, or nonprofit organization. They claim that you won a scholarship or grant without ever applying and demand payment of a one-time processing fee.

In another scenario, the scammer forces you to apply for a scholarship or guaranteed grant. However, fees apply. You pay, but you never get the money promised, and the company has so many conditions on it that it’s almost always impossible to get a refund.

If you’re looking for college financial aid, keep an eye out for the following red flags:

• Scholarship programs that charge an application fee: Beware of scholarship foundations that charge an application fee, even if the fee is minimal or the foundation claims the fees are only intended to encourage serious students to apply. Legitimate scholarship foundations do not charge an application fee or charge for the promise of a refund if a scholarship is not awarded.
• No work involved: Beware if a scholarship service claims it will apply on your behalf. A legitimate scholarship program will require the applicant to submit their own application, essay, and / or letters of recommendation.
• The scholarship or financial aid is guaranteed: Avoid scholarships or financial aid services that claim you are guaranteed to receive money. Legitimate scholarship and financial aid services have no control over who is ultimately selected for a scholarship or who is eligible for financial aid. Usually, this statement is made to make you pay a fee to get help applying for a scholarship.
• You have been selected without applying: Beware of letters or phone calls stating that you have been selected or are a finalist for a scholarship you have never applied for, it is a sign of a scam. Genuine scholarships do not send unsolicited offers to students. Be careful not to divulge personal information, banking information, or write a check to unknown or suspicious companies.
• The advance loan: Avoid lenders who offer you a weirdly low interest rate on an educational loan and then charge an upfront fee before you can receive the loan. Only work with lenders or banks that you recognize. If you are looking for a student loan, be aware that real lenders do not charge an upfront application fee, but deduct their processing fee from the check before the student receives the loan.
• Invitation to attend a seminar. If you decide to attend an information seminar on scholarships and financial aid, be aware that this is probably a sales pitch for scholarship services. During the seminar, do not be forced to pay for the services on site. Before purchasing any services, carefully examine the organization and see if you can find the same services for free. Do not make a purchase if the representative does not answer your questions directly and fully.

Source: BBB.org

If you want to report a scam, call 256-533-1640 or go to BBB Scam Tracker.