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Scholarship Scam

Financial Matters: Watch Out for Scholarship Scams

Have you ever been invited to a “free scholarship seminar” or received an official-looking letter from a company that “guarantees to find you financial aid or your money back”? If so, you may have been the target of a scholarship scam. Each year, families trying to find money to pay for college expenses fall victim to such scams; estimates of losses each year are in excess of a hundred million dollars.

Scholarship search firms attempt to attract clients by proclaiming that millions of dollars in college aid goes unclaimed each year. The “unclaimed” scholarships, however, are generally tied up in trusts or through a company’s program for children of employees. Some scholarship money is earmarked for members of a union or organization. This “unclaimed” scholarship money is not available to the general public. Although scholarship search services offer, for a fee, to provide you with lists of sources of financial aid, you can do your own scholarship search on the web for free. Begin your search with sites like fastweb.com or collegeboard.com.
Other scholarship services invite prospective clients to a free seminar. After a general talk, they use high pressure tactics in a one-on-one meeting to convince families to use their services. Still other scams claim that you’ve won a scholarship (that you never applied for) and now need to pay a fee for processing. Beware of any scholarship offers that come with a fee attached you should not need to pay money to be awarded a scholarship. Be especially careful if asked for a credit card or bank account number.
Legitimate companies never guarantee or promise scholarships or grants. If you are not sure if an offer of aid is genuine, check with your college advisor or call the Federal Trade Commission at
877-FTC-HELP. More information is available at their website at www.consumer.ftc.gov.

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