BBB And FTC Warn About Scholarship Scams

Scholarships are a wonderful opportunity for students and parents who are trying to cope with rising education costs. Unfortunately, as tuition seemingly rises year after year, so does the abundance in scholarship scams. While scholarships are supposed to help with the costs commonly associated with the school year (books, living expenses, tuition and more), each year thousands of students are defrauded by what appears to be an opportunity for a little extra cash.

BBB Serving Metro Atlanta, Athens & Northeast Georgia and the FTC cautions students to look and listen for these tell-tale lines:

• The scholarship is guaranteed or your money back.”
• “You can’t get this information anywhere else.”
• “I just need your credit card or bank account number to hold this scholarship.”
• “We’ll do all the work. You just pay a processing fee.”
• “The scholarship will cost some money.”
• “You’ve been selected” by a “national foundation” to receive a scholarship – or “You’re a finalist” in a contest you never entered.

If you attend a seminar on financial aid or scholarships, follow these steps:

• Take your time. Don’t be rushed into paying at the seminar. Avoid high-pressure sales pitches that require you to buy now or risk losing out on the opportunity. Solid opportunities are not sold through nerve-racking tactics.
• Investigate the organization you’re considering paying for help. Talk to a guidance counselor or financial aid advisor before spending your money. You may be able to get the same help for free.
• Be wary of “success stories” or testimonials of extraordinary success – the seminar operation may have paid “shills” to give glowing stories. Instead, ask for a list of at least three local families who’ve used the services in the last year. Ask each if they’re satisfied with the products and services received.
• Be cautious about purchasing from seminar representatives who are reluctant to answer questions or who give evasive answers to your questions. Legitimate business people are more than willing to give you information about their service.
• Ask how much money is charged for the service, the services that will be performed and the company’s refund policy. Get this information in writing. Keep in mind that you may never recoup the money you give to an unscrupulous operator, despite stated refund policies.

The FTC says many legitimate companies advertise that they can get students access to lists of scholarships in exchange for an advance fee. Other legitimate services charge an advance fee to compare a student’s profile with a database of scholarship opportunities and provide a list of awards for which a student may qualify. And, there are online scholarship search engines. The difference: Legitimate companies never guarantee or promise scholarships or grants.

If you’re contacted by companies or visit websites that say they’ll process your FAFSA for a fee, do yourself a favor and save some money, too. Visit StudentAid.gov, the U.S. Department of Education’s site for free information on preparing for and funding education beyond high school. You can complete the FAFSA at www.fafsa.gov, and learn about other FAFSA filing options at www.fafsa.ed.gov/options.htm. You also can call 1-800-4-FED-AID.

Although BBB cannot promote their services, listed below are some websites where you can search for scholarships. Please read and understand all information on each website.

Cappex - https://www.cappex.com/

CollegeBoard.org - https://bigfuture.collegeboard.org/scholarship-search

Fastweb.com - http://www.fastweb.com/

Scholarships.com - https://www.scholarships.com/

For companies you can trust please visit bbb.org.