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Financial Aid Pitfalls

Financial Aid Pitfalls. Mike McGraw, Director of Financial Aid at Tompkins Cortland Community College and Pat Johnson, Associate Director of Financial Aid & Scholarship Programs at Syracuse University. BEWARE!. Financial Consultants Scholarship Scams FAFSA.com. Financial Consultants.

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Financial Aid Pitfalls

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  1. Financial Aid Pitfalls Mike McGraw, Director of Financial Aid at Tompkins Cortland Community College and Pat Johnson, Associate Director of Financial Aid & Scholarship Programs at Syracuse University

  2. BEWARE! • Financial Consultants • Scholarship Scams • FAFSA.com

  3. Financial Consultants • Provide a variety of services • Assistance with filing financial aid forms • Assist with appeals to college financial aid offices for additional funds • Scholarship Searches

  4. Charge a fee for services • Reasonable - $50 - $100 • Unreasonable - $300 – thousands • Rationale • Financial aid forms are too complicated • Schools are not forthcoming on how families can maximize their aid eligibility • ‘Guarantee’ results

  5. How do they find you? • Mass mailings to high school students • Surveys which are then sold to a variety of companies • Surveys on the internet • Advertisements in newspapers for free seminars in local hotels • Marketing to school administrators • School Superintendents • Board of Education • Promote conducting financial aid seminars with or without financial aid professionals

  6. What are the pitfalls? • Using a consultant will cost you money • Consultants may encourage or instruct you to provide incorrect information on the premise that many schools do not verify information reported • Underreporting income • Excluding assets • Over reporting number in college

  7. Paid preparers are required to sign FAFSA. If preparer refuses to sign this may indicate he or she is encouraging you to commit fraud • Parent and student are required to sign FAFSA and by doing so certify the information provided is correct. If you purposely give false or misleading information you may be fined $20,000, sent to prison, or both. • Beware of strategies promoted that seem unethical • Many schools flag FAFSAs received signed by a paid preparer for extra scrutiny

  8. Companies advertising scholarship searching services will cost you money • Often have money back guarantee which is worded in such a way that it’s almost impossible to get a refund • Provide same information, or less, than internet search sites such as FASTWEB.com • FAFSA.com will cost you money • Very professional site • Offers toll free telephone number • Still have to print and sign signature page or go to FAFSA.ed.gov to file online with your PIN

  9. What to do? • Before using a consultant or company contact a financial aid office. • May be able to give historical information on the particular organization • May be able to provide answers to questions immediately and for free • Check the address of the organization. • Are they using a PO Box? Will they give you a street address if asked? • Ask them about their qualifications • An inexperienced consultant may make costly mistakes

  10. Suspect a Scam? • Save all forms you receive from the suspect company • Take notes during any seminar or phone conversations • Report the suspected scammer to any of the following organizations: • Federal Trade Commission (FTC) • National Fraud Information Center (NFIC) • Better Business Bureau (BBB) • United States Postal Inspection Service (USPIS)

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