State of Connecticut Department of Banking

January 15, 2015

Don’t Pay for Financial Aid Forms or Information, State Officials Advise

This release was issued jointly with the Office of the Attorney General and the Department of Consumer Protection.

The Department of Consumer Protection, Department of Banking and the Office of the Attorney General are warning high school seniors and college students applying for college financial aid to steer clear of companies charging fees for financial aid forms. These services, which falsely imply that they will improve an applicant’s chances of success, often end up charging students as much as $1,000 for materials that are available at no cost.

Most colleges and universities require students to complete the Free Application for Federal Student Aid (FAFSA), available online at the U.S. Department of Education’s website (https://fafsa.ed.gov/).  Helpful tips on applying for student aid and completing the online FAFSA form are also available on this site.

“Students don’t need to spend their money on forms and information that’s readily available at no cost,” Consumer Protection Commissioner Jonathan Harris said. “There is no competitive advantage for the student who uses paid services. The only one who benefits is the person behind the operation, collecting bogus fees.”

As the FAFSA deadline approaches, students may get mail, email, social media, and telemarketing offers pitching financial aid forms and assistance. Promotional messages may include:

  • High-pressure: “Buy now or miss this opportunity.”
  • Guarantees: “We guarantee you’ll get financial aid.”
  • Easy, quick access: “We’ve got aid for you; just send us your credit card or bank account number.”
Students comparing college offerings online may confront these offers in pop-up advertisements.
“Offers like these are red flags for trouble ahead,” said Harris. “Never give out a credit card or bank account number unless you know the organization you are giving it to is legitimate; in this case, you certainly don’t. High pressure tactics and unfounded guarantees are signs of a shady deal.”
“Students looking for financial aid should always keep in mind that the FASFA form is free,” said Attorney General George Jepsen. “I urge students and families to be cautious of imposter websites that charge for financial aid services or that guarantee scholarship money.”
The U.S. Department of Education encourages applicants to avoid paying for application assistance and warns of related scams through its website: https://studentaid.ed.gov/types/scams.
Department of Banking Commissioner Howard Pitkin said that when considering student loan offers, consumers need to choose carefully and know who the lender is.

Commissioner Pitkin added, “There are several types of loans available, but in no circumstance should students be charged fees for that information. As with any loan, there is no ‘guarantee’ that you will receive a loan before you even apply, so be sure to do your homework and research any offer for financial aid or scholarship before submitting your information.”

Families looking for valid information about financial aid options and completing forms can try these free sources:

  • the financial aid office at the college or college(s) you’re thinking about attending;
  • the online help offered on the FAFSA.gov website -- https://fafsa.ed.gov. It provides step-by-step instructions for completing the FAFSA and applying for various types of financial aid;
  • the Federal Student Aid Information Center website at https://studentaid.ed.gov. It is comprehensive, easy to navigate, and an official source of information for students and parents;
  • a school counselor at your current high school.

Many fee-for-service websites promise FAFSA assistance, so consumers should beware of imposter sites. To avoid landing on a website that requires payment for the FAFSA form, use https://fafsa.ed.gov.

The Department of Consumer Protection works to ensure a fair marketplace for all Connecticut consumers through regulation and monitoring, enforcing the law, and educating and empowering consumers.

The Department of Banking is a state agency that is responsible for the regulation and examination of financial institutions and various related entities that are chartered, licensed or registered by the state.

The Office of the Attorney General provides legal support and enforcement for the Departments of Banking and Consumer Protection.