The Federal Trade Commission Library located in Washington, D.C.
With thousands of high school seniors deciding which colleges they’ll attend in the fall, there’s a new scam that students and their families are being warned about. A recent investigation by 23ABC News of Bakersfield, California uncovered the new attempt to wrangle funds from desperate and unwary college students.
The scam begins with a phone call saying that you’ve been awarded almost $15,000 from the U.S. Grants Department. The person on the other line then claims that you need to purchase two iTunes cards for $200 as a “registration fee” which will be refunded by Western Union. You’ll then be given a “reference code” to collect the grant.
As mentioned before, this is a scam, so there is no refund and no award involved. The Federal Trade Commission (FTC) and the U.S. Department of Health and Human Services warned that students never need to pay a fee to apply for a grant from the federal government. On that note, you must apply in the first place to even be considered, making unsolicited offers clear red flags.
Student loan debt scams are somewhat rampant in the United States. According to The Student Loan Report, warnings are coming from all sorts of watchdogs including the CFPB, Snopes.com, and even the Better Business Bureau. One of the more recognizable scams involved Blac Chyna, a reality TV personality, who promoted a phone call scam offering debt relief
These scams are hot on the heels of disturbing trends in higher education. According to the College Board, the average cost of tuition and fees for the 2016–2017 school year was $33,480 at private colleges, $9,650 for state residents at public colleges, and $24,930 for out-of-state residents attending public universities.
Many students are desperate for ways to pay for their education, so a $15,000 grant from the government sounds like great news. Remembering the $1.4 trillion in outstanding student debt, these scams shouldn't come as a surprise. Such a large source of debt is likely to attract opportunists.
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