Before you or your student start applying for scholarships and financial aid, you absolutely need to know how to spot a scam. As parents have become more and more concerned about finding additional funding to help cover college costs, scam artists have begun to take advantage of this justifiable worry.
Recent reports on websites like CNN Money have indicated that families have paid up to $1,000 for financial aid help to scam artists claiming to help find scholarships. The families’ money disappeared, and so did the scammer. The families never received help with financial aid.
To protect yourself and your family from this kind of trouble, you should be aware of the several prevalent types of scams that are out there:
Scam #1: The Fake Seminar
Seminar scams are one of the most widespread type, and usually involve a letter inviting you to a “free” financial aid seminar. These often turn out to be more about selling services than about helping families, and many times the promoters do not even deliver on the services they sell!
Scam #2: Faulty Scholarship Searches
Some services claim they will help students find scholarships for which they are eligible-for fees that range from hundreds to thousands of dollars. Many of these services then either do not do the search, or deliver lists that fall into one of the following categories:
- Scholarships that the student is not eligible for, or
- Scholarships that the student is eligible for, but which you could have found for free.
And of course, even after all that, the student still has to put forth the effort to apply, and is not guaranteed to win anything.
Scam #3:”Free” Grant Money
Victims of this kind of fraud receive a check for a “free gran” that they weren’t expecting. The check is accompanied by instructions to pay part of the award back for “processing fees.” This is nothing more than a tricky bit of check fraud-the “grant”checks turn out to be fakes, and the scammers get away with the “fees” the victim had to pay out of their own pockets.
You should never have to pay a fee for a grant! In fact, you should be wary of any kind of scholarship or financial aid that requires a payment.
You don’t, however, want to “throw the baby out with the bathwater.” There are private scholarship and college funding workshops that can be very worthwhile to attend-just make sure you go to one offered by a credible source.
All the best,