News from NASFAA
Someone Impersonating an ED Official Is
Offering Students Grants for a Processing Fee
To: All Destination Points
FROM: Kay Jacks, General Manager
FSA Application, School Eligibility and Delivery Services
SUBJECT: Financial Aid Fraud
SUMMARY: Someone impersonating a U.S. Department of Education official is
offering students grants for a processing fee.
Dear Colleague:
It was brought to our attention recently that someone claiming to be a
representative of the U.S. Department of Education (ED) is calling students,
offering them grants, and asking for their bank account numbers so a processing
fee can be charged. Specifically, the caller tells the student he understands
the student has federal student loans and offers to replace the loans with an
$8,000 grant. The caller explains that a processing fee must be charged and
obtains the student's checking account information.
We urge you to remind your students that there is no ED program to replace
loans with grants and that there is no processing fee to obtain Title IV grants
from ED. Furthermore, students should never provide their bank account or credit
card information over the phone unless they initiated the call and trust the
company they are calling.
We recommend that you immediately e-mail or otherwise contact your current
and incoming students to warn them about this scam. A student who is a victim of
this or a similar scam should take the following steps:
-
Immediately contact his or her bank, explain the situation, and request
that the bank monitor or close the compromised account.
-
Report the fraud to ED's Office of Inspector General hotline at
1-800-MIS-USED (1-800-647-8733) or
oig.hotline@ed.gov. Special agents in the Office of Inspector General
investigate fraud involving federal education dollars.
-
Report the fraud to the Federal Trade Commission (FTC). The FTC has an
online complaint form at
www.ftc.gov/scholarshipscams and a hotline at 1-877-FTC-HELP
(1-877-382-4357; teletype for the hearing impaired: 1-866-653-4261). The FTC
will investigate if the fraud is deemed widespread; therefore, it is
important that every student contacted by the person or people in question
lodge a complaint so the FTC has an accurate idea of how many incidents have
occurred.
-
Notify the police about the incident. Impersonating a federal officer is
a crime, as is identity theft.
When filing complaints, the student should provide detailed information about
the incident, including what was said, the name of the person who called, and
from what number the call originated (if the student was able to obtain it via
Caller ID). Additionally, if unauthorized debits have already appeared against
the student's bank account, the student should mention this fact in his or her
complaint. Records of such debits could be useful in locating the wrongdoer.
For information about identity theft prevention, you and your students may
visit www.ed.gov/misused. For
information about preventing financial aid scams, visit
www.studentaid.ed.gov/lsa.
Sincerely,
Kay Jacks
General Manager
FSA Application, School Eligibility and Delivery Services
Posted July 14, 2004 on www.NASFAA.org, Web Site of the
National Association of Student Financial Aid Administrators
Please submit Web Site questions or comments to Web@NASFAA.org
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