Researching Your Financial Options For Education: 5 Tips To Avoid Fraud
The amount of options, the number of voices telling you to go one way or another, and the array of decisions that must be made for financing your education can be mind boggling. A student looking for an undergraduate degree or other post-secondary certification will find that there are many government agencies, lenders, and private companies that offer money to help pay for education. Due to the many options, separating the legitimate offers from the scams can be a challenge. By following a few tips to help avoid being deceived, you can safely get the funds you need to embark on your new (or continued) learning journey.
Beware of “All Are Approved” Financing Deals
Like any other forms of financing, there will be qualifications for getting an education loan or grant. Beware of deals that sound too good to be true—not surprisingly, they often are. Although credit requirements are frequently relaxed for student loan borrowers, there are still requirements that have to be met. While this doesn’t necessarily mean you shouldn’t dismiss all good offers (such as those that have a low fixed interest rate), you should simply be very cautious and read the fine print when a private lender seems overly eager to have your business.
Do a Cost vs. Return Analysis
Here is where your smarts come in. Analyze the starting salaries, hiring forecast and growth of your intended career path. Then calculate whether the amount you have to borrow is in line with these costs. If you are planning to be an art teacher research starting salaries for art teachers in your area. If art teachers are earning a salary of $30,000 on average per year in the place in which you intend to seek employment, it may not make sense to take out a $70,000 loan for an art education degree.
Steer Clear of For-Profit Colleges
Most major universities, both public and private, are non-profit organizations. For-profit colleges have one main goal—to make a profit. While these for-profit colleges may offer you coursework that leads to a degree or career, they are often overpriced and generally won’t offer the best bang for your buck. In addition, because they are in business to make a profit, they accept any student who applies, decreasing the credibility in the marketplace of degrees or certificates earned from such schools. You should probably research the accreditation status of any school you look to attend.
Watch Out for Loan Scams
There are many fly by night companies that crop up and promise to loan you all of the money you need for college. These companies have been known to charge inflated interest rates and prey on young, inexperienced college students. Fully research any lender before entering into an agreement. Some schools opt to use a HigherOne.com scam or fraud checking service to avoid many of the fraudulent transactions that can accompany student loans.
Avoid Borrowing Too Much
Some lenders will encourage you to borrow more than you need for your education. Many students willingly do this so they can receive large cash refunds during the school year. Keep in mind that you have to pay that money back eventually. Borrow as little as possible and supplement student loans with grants, work study and part time work.
Avoiding scams is key to getting the best education experience you can have. While there are very many reputable lenders that a student can rely on, some college students learn the hard way that not all lenders are trustworthy institutions. Don’t make a major financial decision about your education without doing all the proper homework first.
Share this:
Category: Education
