Students Warned of Scholarship & Financial Aid Scams

February 20, 2013

DENVER – February 20, 2013 – This time of year many students are applying for scholarships and financial aid for the 2013-2014 college school year. College enrollment is has increased 37 percent from 2000 to 2010 according to the National Center for Education Statistics and that means more students are looking for all the help they can get with financing their education.

Every year, the BBB receives complaints from parents or students who paid money up front to a company that promised to find scholarships and grants but ultimately didn’t deliver.

Some companies may send prospective college students a letter explaining they have been selected for a personal interview but instead are invited to a financial aid seminar. BBB complaints say seminar attendees paid more than $1,000 for help finding aid, but the services offered were mostly assistance in filling out financial aid forms.

The BBB is also receiving complaints about a company that say the company is calling and offering free government grant money. Complainants say they are asked to provide their credit card number to authorize a charge of $4.95 to receive a grant packet and are then charged a $49.95 monthly fee to “access information” on government grants but no actual grants are received.

Beware of anyone calling saying you qualify for a free government grant. If they ask you to wire money in order to receive the grant, do not do it. These are scams.

BBB recommends listening for the following red flags when receiving the sales pitch from a financial-aid finder:

· “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.

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