What College-Bound Students and Parents Need to Know

A college education -- your own or your child's -- is one of the most expensive undertakings you'll ever commit to. And, for many people, it would be an impossible dream without the extra help of scholarships.

Unfortunately, the scholarship field is also riddled with unscrupulous operators and scams that have cost American consumers over $100 million annually.

Here are some things you need to know so you don't get taken by scholarship scams:

1. You don't have to pay any money to get scholarship money -- not even an application fee. Legitimate scholarship sources will not need application fees, or 'processing' or insurance fees. Scammers, of course, will insist that you pay it up front. (There may be a few exceptions here, but they are rare.)

Note: There are legitimate companies that charge a fee for lists of potential scholarships you can apply for, or that offer to compare your profile with a database of scholarship opportunities. These companies do NOT promise you'll win a scholarship.

2. You cannot ever be guaranteed to win a scholarship, and if a scholarship matching company or agency makes that claim -- run! They don't have any control over the decisions made by scholarship sponsors.

Some of these companies offer a money-back guarantee, but only if you apply to every scholarship on the list, which of course is ridiculous since you won't qualify for many of them.

3. If the company claims that 'everybody is eligible,' be skeptical. Every scholarship has some sort of criteria. Some focus on academic or athletic ability, while others are for people from some specific location or demographic group.

4. 'Unclaimed' scholarships are rare. Most financial aid programs are actually highly competitive and have too many choices about who to give their money to.

5. If you are told that the agency will apply 'on your behalf,' it's probably a scam. There is no way to avoid writing your own essays, getting your own reference letters, and submitting your own application.

6. When you see an ad or brochure with lots of 'hype' language, be especially wary. There is no need for legitimate scholarship sources to resort to intense sales pitches.

7. Bank account or credit card numbers are never necessary on a scholarship application -- or in follow-up phone calls, for that matter. If you're told you're a 'finalist' but a fee is required, it's almost certainly a scam.

8. Check for a phone number or legitimate mailing address on the information you're given. Plus, don't be fooled by a fancy name or a name that sounds like a government agency.

9. Did you originate the research or the contact? If not, it's very likely a scam.

If you think you might be in contact with a scholarship scammer, do your homework. Ask for references, get a local telephone listing, and ask for lists of scholarships they've awarded.

For more information, see the Federal Trade Commission's pages on scholarship scams...

Reprint from Internet ScamBusters , Issue #91, 9/1/04
By Audri and Jim Lanford © All rights reserved.
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