March and April are exciting times for high school seniors as they learn which colleges have granted them admission. While they dream of dorm-life, however, many parents are fretting over finances. It’s their turn to do some serious homework.
Each year families caught in financial aid scams lose millions of dollars. Teens are particularly vulnerable. Scam artists can cull through social networking Web sites, community newspapers and other information sources to pull the names of high school seniors. Rather than securing a scholarship, your teen may end up being defrauded of their money and identity.
If you have a college-bound teen, sharing these tips could prevent your family from being ripped off.
- Unsolicited e-mails, phone calls or letters offering scholarship searches, prizes or awards (for which your teen never applied) can be a ploy to obtain their Social Security number, birth date or bank account number.
- Don’t judge by the Web site alone. Many scam Web sites offering scholarship/ financial aid services boast professional images and glowing testimonials. Always check with the Better Business Bureau (www.bbb.org) to find out if a business can be trusted and ask your teen’s guidance counselor, college financial aid administrator or other education professional if they know the organization.
- Financial aid information is readily available at no cost from guidance counselors, school and public libraries, government education agencies and colleges.
- Steer clear of questionable consultants who promise to share secrets on how to maximize financial aid eligibility, but are tight-lipped about their background, specific services and fees.
- Beware the imitator. Some bogus college funding promoters use Federal, Foundation or Administration in their name to appear legitimate.
- Never pay an advance fee or permit debits to your checking account on the promise that you’ve been selected as a scholarship “finalist” or to “confirm” your eligibility. Legitimate scholarships don’t operate that way.
- Financial aid seminars can be blatant sales pitches that pressure you to pay a fee (from $50 to more than $1,000) to obtain information of questionable value.
- The “money back guarantee” can be misleading. It typically has so many strings attached that few people qualify for a refund.
Remember, legitimate scholarship services will never guarantee you money. Also, if you are being promised an education “loan,” you should not have to pay any fees up front. Origination and other fees are taken out of the loan disbursement check.