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Eastern Massachusetts, Maine, Rhode Island and Vermont
BBB Advises Students, Families How to Avoid Financial Aid Scams
January 29, 2014

SavingsMarlborough, MA – Scholarships and grants are a large part of the education planning process for parents and students. The process of applying for financial aid is often confusing and frustrating. Some businesses claim they can help, but only end up charging unnecessary fees. Better Business Bureau serving Eastern Massachusetts, Maine, Rhode Island, & Vermont (BBB) recommends doing your research before paying a business to find financial aid for college.

“Scholarships and grants are essential for many families to get students through college, especially with tuition costs rising,” said Paula Fleming, Vice President for the local BBB. “Unfortunately, some businesses try to take advantage of families looking for funding by charging for fake grants or scholarships.”

BBB recommends looking for the following red flags when researching financial aid:

· They charge an application fee.  Beware of scholarship foundations that charge an application fee, even if the fee is minimal or the foundation claims the fee is to only encourage serious students to apply. If the scholarship service claims students who don’t receive a scholarship will be refunded, the business will often disappear or make it incredibly difficult to qualify for a refund.

· Everyone is eligible.  Each scholarship is looking for an ideal candidate that fits their specific criteria. Whether the requirements are the student’s GPA, career interests, athletic involvement, or volunteer work, legitimate foundations are looking for students that meet their characteristics. Avoid services that claim every student is eligible to receive the scholarship.

· The scholarship is guaranteed.  Avoid scholarship services that claim you are guaranteed to receive scholarship money. Legitimate scholarship matching services have no control over who the scholarship foundation chooses to win the grant. An authentic scholarship service will never guarantee a student scholarship money.

· The advance-fee loan.  Avoid lenders that offer you a strangely low-interest rate for an educational loan and then require an upfront fee before you can receive the loan. Only work with lenders or banks that you recognize. If you are searching for an educational loan be aware that real lenders do not charge an upfront application fee, rather they deduct their processing fees from the check before the student receives the loan.

For more information on finding financial aid for school, visit www.fafsa.gov. For more trustworthy tips on personal finances and avoiding scams, visit bbb.org/boston

For more than 100 years, Better Business Bureau has been helping consumers find businesses and brands they can trust. In 2013, consumers turned to BBB 131 million times for Business Reviews on more than 6.5 million businesses, all available for free at bbb.org.  The Council of Better Business Bureaus is the umbrella organization for 113 local, independent BBBs across the United States, Mexico and Canada, as well as home to its national programs on dispute resolution and industry self-regulation.

Paula Fleming is VP of Communications & Marketing for Better Business Bureau Serving Eastern MA, ME, RI & VT.  Find Paula on Google+.

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