It’s one thing to swindle people out of their money by convincing them to buy a miracle weight loss wrap, or some magical tree bark that can cure ills of all sorts. It’s another to take advantage of young students, or their financially illiterate families, who are just looking for ways to pay for a college education. But living in America, it shouldn’t come as much of a surprise that there are several companies doing just that.
The Consumer Financial Protection Bureau (CFPB), which is fresh off of taking corner-cutting background screening companies to task, is also dropping the hammer on a nationwide college financial aid scam, in which tens of thousands of people were apparently swindled. The CFPB went after one company specifically, saying that it ripped students and their families off by illegally charging “millions of dollars in fees for sham financial services.”
“The Bureau filed a complaint in federal court against the company, which operates under the names of Student Financial Resource Center and College Financial Advisory, and the individual who owns and operates the scheme,” the CFPB said in a press release. “The CFPB is seeking to halt illegal practices and obtain relief for harmed consumers.”
CFPB director Richard Cordray said that Global Financial Support Inc., the parent company that owns and operates Student Financial Resource Center and College Financial Advisory, is nothing more than a charade being run by the company’s owner Armond Aria — who profited by promising prospective students help with finding targeted financial aid programs for a fee, but then gave nothing in return.
“Student Financial Resource Center and College Financial Advisory scammed thousands of students by masquerading as government agencies and other trusted organizations,” Cordray said. “Students and families were looking for information on how to pay for college, instead they were illegally charged millions of dollars for sham financial services. We will continue to take strong action against those who deceive consumers.”
Whether you yourself are looking at attending college for the first time, heading back to pick up a post-graduate degree, or even just looking at options for a child or relative, the realization that fake financial aid companies are out there taking advantage of people like this has to be disheartening. The prospect of going to college these days is already stressful, considering that most people are looking at graduating with a heavy debt load.
The average graduate from the class of 2015 is set to hit the labor pool with an average of $35,000 in student loan debt, to put things in perspective.
What’s truly troubling — outrageous, even — is that the company the CFPB is targeting was specifically scamming people that were doing the right thing by looking for financial help with education costs. That was a signal that these people were already facing struggles in paying for college, but Global Financial Support Inc. apparently didn’t let that bother them.
Of course, we’ll hear the other side of the story in due time, as the CFPB’s lawsuit works its way through the U.S. Federal Court in California’s Southern District.
What this means for individuals — either students, or parents — is that you need to be even more vigilant than ever when not only looking for affordable college choices, but in those who reach out offering to help. It’s a shame, really, as there are plenty of perfectly legitimate organizations that do and will help families track down viable financial aid programs and scholarships — but the companies that are out there scamming people are merely making the public more distrustful of them.
If you are looking for financial aid, the best place to start would be by filling out the FAFSA from the Federal Student Aid office at the U.S. Department of Education. You can also look for grants and scholarships there, without worry that you’re being scammed.
There are plenty of other sites and resources out there as well, but as previously mentioned, those may suffer now that consumers and students are aware that there are predators out there. Your best bet is to be wary of the sites you come across, and to do your research. If a site is asking for a fee, go ahead and look at customer feedback and reviews. There’s plenty to work off of.