A Scam Alert from the Better Business Bureau:
For students struggling to pay tuition, a sudden offer of a grant or scholarship can look like a dream come true. But it could be bait for a scam. This con hooks victims with the promise of money, but upfront “fees” never actually materialize into those much-needed funds.
Better Business Bureau (BBB) recommends caution when dealing with companies that offer assistance in finding financial aid opportunities. Students and their families should be wary of websites, seminars, or other schemes that promise to find scholarships, grants, or financial aid packages for a fee.
How the Scam Works:
Scammers typically claim to represent the government, a university, or a nonprofit organization. The details vary, but the con is the same. Using words like “National” and “Federal” to sound more official, scammers pose as a financial aid representative. They claim you have won a scholarship or a grant (without ever applying) and ask for payment of a one-time "processing fee." In another version, the scammer pressures you into applying for a “guaranteed” scholarship or grant. However, there is a fee to apply. You pay up, but never receive the promised money, and the company has set so many conditions that it’s almost always impossible to get a refund.
In yet another variation, you receive a check for the scholarship but are instructed to send back payment for the taxes or fees. The check turns out to be a fake, and you’re out whatever money you’ve sent.
Legitimate companies can help students find aid, but they will never guarantee results. However, students and parents usually can find the same awards and others on their own by searching online or going to the library. Your prospective college’s financial aid office can be of assistance, as well.
Tips to Spot this Scam:
It is generally free to apply for scholarships. In the U.S., the Free Application for Federal Student Aid (FAFSA) is the only application that determines eligibility for all federal programs and you can complete and submit it for free. More information is available online or by calling 1-800-4-FED-AID. Even if you don’t think you qualify for financial aid, fill out the FAFSA anyway, as many colleges and universities use it for non-need-based awards.
To report a scam, go to BBB Scam Tracker.
To learn how to protect yourself, go to “10 Steps to Avoid Scams”.