Financial aid consulting is an increasingly popular business these days, as college tuition has skyrocketed and families are desperate for help with funding for higher education costs.

The application process, Free Application of Federal Student Aid (FAFSA) forms, and different financial aid policies at different schools can make create a challenging environment for parents, especially with multiple kids, to make the best decisions for their financial futures. In this context, the financial aid consulting sounds like a natural fit. For a fee, these experts work with parents to determine what financial aid they are eligible for, what scholarships they should apply towards, what assets they should apply towards school, and what loans make sense for any given family. Some consultants offer a holistic process throughout the entire applications cycle, while others help with more targeted goals (for example, maximizing financial aid eligibility).

On the surface, it sounds like a great service. Parents who are busy and inexperienced in the college financial aid process might find it worth it to lean on the expertise of a consultant, and might find their guidance invaluable. However, this business is not without its risks.

Financial aid consultant is actually considered a mid to high risk business. This designation isn’t a reflection on how successful the business is likely to become, but rather how great the potential for fraud is. This can cause problems if you are a financial aid consulting business that wants to be accepting payments online. Accepting payments online seems like a very convenient way to collect fees from clients, but there may be some roadblocks. If you’re a financial aid consultant, or interested in using these services, read on for a few reasons these are classified as potentially high risk merchants.


There are all sorts of ways that a financial aid consulting business can commit fraud. When you consider the amount of paperwork involved in the college application process, it’s not a difficult to imagine how an unscrupulous individual might take advantage of the confusion. Others might ask to take a fee based on a proportion of the aid a child receives, or guarantee certain scholarships — parents should be wary of this. It’s not a red flag for a consultant to earn a commission, but families should not agree to a percentage-based fee. If you are a consultant, be up front about any commissions you might receive. It’s a good idea to communicate to parents if you are a fiduciary and will be acting in their best interests.

Unauthorized Use of Information

Some parents may be easily swayed to provide sensitive financial information to financial aid consultants, like the FSA ID, which is used to log in to a FAFSA account. Any legitimate financial aid consultant should never ask for this information. If you are a consultant, provide genuine references and expect that they will be checked. Checking these references will help assure parents that their consultant is legitimate and trustworthy.

Pyramid Schemes

These kinds of business models are ripe for pyramid schemes, where the business recruits members promising payments or services for enrolling others into the scheme. Scammer and grifters have been exploiting others through this scheme for decades, to the point where many lending thing of any multi-level-marketing business as a pyramid scheme — making it difficult for honest MLM businesses to get a merchant account they need for accepting payments online unless they go to a high-risk processor.

If you’re a financial aid consultant, don’t be discouraged by the potential high risk label. This doesn’t mean that accepting online payments from your clients is an impossibility. This label is not a reflection on your business or personal reputation, but an unfortunate reality in a world where grifters and scammers can take advantage of trusting, honest people looking for help. If you’re a consultant with the goal of accepting payments online, do your research and find a provider that’s right for you.

A processor who has relationships with acquiring banks that regularly provide credit card processing to mid-to-high risk merchants might be the best fit for your business. Finding a processor who has expertise with your kind of business can be a huge help in getting approved and accepting payments online. Although it might seem intimidating to be potentially labeled as a “high risk” merchant, it’s much better to understand why this might be the case and be prepared ahead of time.  Accepting payments online is an important step for any business, including a financial aid consulting business.