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Scholarships are an attractive
way to help manage college costs. Your child won't have to repay them (like student
loans) or work to maintain them (like work-study). Since students and parents
are so eager to find these funds, it's no wonder that they become easy targets
for financial aid con artists. Last
year, 4 defendants operating a college financial aid scam settled by paying victims
more than $1 million dollars. The Federal Trade Commission alleged that, using
seminars and sophisticated Websites, the defendants marketed a college financial
aid assistance program promising that, for $1,000 - $2,000, they will secure the
financial aid necessary for students to attend college. By
federal estimates, 350,000 students and parents are defrauded of more than $5
million each year by companies making promises they don't or can't keep. Many
scholarship finders promote the old adage that "millions of dollars in private
scholarship money goes unused every year." The fact is, nearly all available
financial aid comes from the federal government or from individual colleges. Often
private scholarships are slated for very specific applicants, such as students
with a particular career interest, or members of a certain church or organization.
These institutions have created funds for students, so they are eager to give
them to qualified individuals. They are not interested in keeping the money a
secret. You and
your child can easily find out about these opportunities by checking with your
employer and other appropriate institutions. Have your child make contact with
clubs or other organizations to find out what they seek in an applicant. Your
child's high school counselor can also provide information on scholarships.
Tell-Tale
Signs of a Scam According
to the Federal Trade Commission's Scholarship Scams report, if you or your child
hears these lines from a scholarship service, you may be getting duped: 1.
The scholarship is guaranteed or your money back
No one can guarantee
that they'll get your child a grant or scholarship. Refund guarantees often have
conditions or strings attached. Get refund policies in writing - before you or
your child pays.
2. You can't get this info0rmation anywhere else
There are many free
lists of scholarships available. You and your child should start researching scholarships
at the high school or library before you decide to pay someone to do the work
for you. 3.
I just need your credit card or bank account number to hold this scholarship
You or your child shouldn't give out credit card or bank account number on the
phone without getting information in writing first. It may be the set-up for an
unauthorized withdrawal from your account.
4. We'll do all the work
Don't be fooled. There's no way around it.
Your child must apply for scholarships or grants himself.
5. The scholarship will cost money
Don't pay anyone who claims to be
"holding" a scholarship or grant for your child. Free money shouldn't
cost a thing.
6. You've been selected by a "National Foundation" to receive a scholarship
or You're a finalist in a contest you never entered
Before you or your
child sends money to apply for a scholarship, check it out. Make sure the foundation
or program is legitimate. If
you or your child suspects a scam, bring a copy of all literature and correspondence
to your child's school guidance office or to a financial aid administrator at
a local college for advice. You can also contact the Better Business Bureau, your
State Bureau of Consumer Protection, your State Attorney General's Office, or
report the offer to the National Fraud Information Center. While
grants and scholarships are not available to everyone, something anyone can do
starting right now is begin put away even small amounts of money on a regular
basis into a safe investment with tax benefits which over time will compound into
a significant sum, and it's tax free. For details, call me at (310) 800-6333.
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