Can You Really Get Grant Money to Pay Off Debt?

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Predatory scammers target desperate consumers.
Predatory scammers target desperate consumers. (Image: Goodshoot/Goodshoot/Getty Images)

In tough economic times, consumers welcome virtually any help getting out of debt. A grant is a sum of money that an agency — usually a non-profit or a government agency — awards to fund a project. The most commonly awarded grants are those that fund educational or scientific research. Grants are also often awarded to fund philanthropic or charitable work. Generally speaking, no grants are available to help individuals pay off consumer debt.

No Federal Grants

The Federal Trade Commission has made it clear that the federal government does not fund grants for consumers to use to pay personal expenses, or pay off debts. When it comes to government grants for debt relief, the old adage is true: if something sounds too good to be true, it probably is. According to the FTC, that is the case with grant money to pay off debt.

FTC Enforcement

The rumor that you can get grant money to pay off debt has been proliferated by dishonest companies that target cash-strapped consumers. The FTC has shut down several companies that duped individuals into providing their credit and debit card account information, to pay a nominal fee in exchange for information about grants. The information the company provided to consumers was worthless, and the company charged additional fees ranging from $19 to $95 to the consumers' credit and debit cards.

Government Debt Relief

The government does offer some debt relief programs. Student loan repayment options are one example. Consumers who have student loan debt can apply for military service deferment, economic hardship deferment, forbearance or consolidation programs that postpone repayment but do not forgive the debt. Mortgage loan assistance is another government debt relief program. Consumers who are unable to make mortgage payments because of divorce, unemployment or illness may qualify for federal aid to homeowners in the form of loan modification.

Avoiding Scams

As a consumer, you should be skeptical of any organization that claims it can secure grant money for you to use to pay off your debt. Scammers may use high-pressure tactics and celebrity endorsements to try to trick you into giving them your credit and debit card account information. Beware of any program that requires you to buy information.

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