A grant is a monetary award used to improve the public good that doesn't have to be repaid. Borrowers who are desperate to pay off debts may find ads that offer grants tempting. While there are legitimate resources for borrowers who are desperate, no government or private grants exist for paying debt. If a borrower does decide to apply for a grant anyway, know the rules to protect yourself against fraud.
Government Grants and the FTC
The federal government gives away billions of dollars in grants funding every year. Grants.gov lists 26 federal agencies that provide grants for many purposes; however, as the site clearly states, "Grants.gov does not offer money for personal financial assistance or debt." The Federal Trade Commission also warns consumers about applying for get-out-of-debt grants on its own website. Despite these clearly worded warnings, consumers get tricked every day into applying for fake grants. State and local governments also offer grants to eligible applicants, as do some corporations and nonprofits. However, just like federal grants, funds are to further the public good -- not pay off a borrower's bad debt.
Applying for a Grant
Whether a government or privately-funded grant, applying for a grant is free, and grant information is also freely available on the Internet. You do not have to provide your Social Security number or credit card number on a grant application; if you are asked for this information -- it's a scam. To find out about government or corporate grants, simply contact the organization's grant's department directly. Information is easily obtainable.
If You're a Victim
If you've already provided personal information over the Internet, on the telephone or through the mail for "free" grant information, contact the Federal Trade Commission to file a complaint and contact your state Attorney General's office. Check your credit report as soon as possible. The worst criminals collect victims' personal data and then open false credit accounts with it. If this has happened to you, notify each credit bureau immediately. Closely monitor your existing legitimate bank and credit accounts for unauthorized activity.
An Alternative
Contact a nonprofit credit-counseling agency for help. The National Foundation for Credit Counseling is one such agency. It has an outstanding reputation, and is the oldest debt counselor in the country. Consolidated Credit and Green Path are two additional highly regarded, reputable credit counseling agencies. Their counselors provide a free initial budget analysis, and if you're eligible, you can enroll in a debt management plan. Known as a DMP, it can reduce your interest and payments and still have you completely debt free within five years. If the DMP isn't an option, the counselor will be able to discuss other options with you. However, a grant to pay off your debt won't be among the choices.
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