Don't Pay for Free Advice on Financial Aid for College

February 11, 2013

Millions of people depend on grants and scholarships to pay for college. Navigating the process of applying for financial aid can be confusing. Some companies claim they can help, but only end up providing information and assistance the student can already get free elsewhere. Your Better Business Bureau recommends doing your research before paying a company to find financial aid for college.

With the cost of college outpacing inflation and crimping family budgets, students and their families are eager to find scholarships and other awards to help pay for higher education. In 2010-11, more than $185 billion in financial aid was distributed to undergraduate students in the form of grants, work-study, federal loans and tax credits, according to The College Board. Sources of the funding included federal and state government, institutions, private entities and employers.

"For families finding a way to pay for college, financial aid can play a critical role. Last year, the average student received a little more than $13,200 to help pay for college. About two-thirds of undergraduate students receive grant aid " said Joan Coughlin, BBB spokesperson. "While some companies are trying to take advantage of struggling families looking for funding, the good news is that all of the information you need is already available free."

Every year, BBB receives complaints from Central Ohio parents who paid money upfront to a company that promised to find scholarships and grants for their child but ultimately didn’t deliver.

One such company is

Grant Assist who, according to complainants, offers a free kit in which the terms and conditions are not clearly disclosed. Consumers are automatically enrolled into a program that charges consumer credit cards accounts $ 57.93 per month for a CD.

Another company is National Media Group. They claim to be affiliated with the Department of Education and offer student grants in excess of $20,000. Consumers pay shipping and handling for an information packet and they are automatically enrolled in additional services for which they did not subscribe, and charged a monthly fee. Furthermore, consumer’s claim the resources provided in the booklet were not as promised.

BBB recommends consumers be aware of the following red flags when listening to a financial-aid finder sales pitch:

  • "The scholarship is guaranteed or your money back."
  • In reality no one can guarantee that they will get you a grant or scholarship. The refund guarantees that are offered usually have so many conditions or strings attached that it is almost impossible for consumers to get their money back.

  • "You cannot get this information anywhere else."
  • Actually, scholarship information is widely available in books, from libraries and financial aid offices and on the Internet, if you are willing to search for it.

  • "We will do all the work."
  • Only parents and students can really determine and provide the financial information needed to complete the forms.

  • "You have been selected by a national foundation to receive a scholarship."
  • If you have not entered a competition sponsored by the foundation, this claim is highly unlikely.

  • "May I have your credit card or bank account number to hold this scholarship?"
  • This is never a requirement for a legitimate scholarship offer.

  • "The scholarship will cost some money."
  • Legitimate scholarship offers never require payment of any kind.

For more information on finding financial aid for school, visit BBB has advice for everyone on managing personal finances and avoiding scams at