Beware of Scholarship Scams

Despite all of the stories to the contrary, there are probably numerous honest people selling used cars. The same can’t be said about people who claim to be able to help families, for a fee, increase the amount of college financial aid they will receive.

If you’d guess that such scammers bilk families out of $100 million a year or more, you would be correct.

They do it by preying on families worried about the cost of college; families who know little or nothing about scholarships and financial aid; families who are often easy targets.

The first contact between the scammers and their potential victims is a letter offering expert advice and assistance.

The letters look good. The letterhead design, the font style, and other elements are calculated to give the appearance of an established, legitimate organization. And, that can be all it takes to fool families…to get them to take the next step on the path to being scammed.

The letters almost always begin by frightening families about the high cost of college.

Once they have stated the problem…paying for college…they assure you they can provide the solution. They may offer to “teach you the secrets of financial aid”, “locate millions of dollars in unused scholarships”, or otherwise help you take advantage of their special expertise.

Not all scammers use identical enticements in their letters, but they all conclude with an invitation to a free “seminar” on how to qualify for maximum scholarships and financial aid. So, families who believe they have nothing to lose flock to hotel meeting rooms, business centers, and sometimes even churches or library function rooms to listen and learn. Like insects landing on a spider web, they never see the trap coming.

The gathering, whatever it is called, is a well rehearsed sales pitch. The gist…you need money, we can help you get it. And, nowhere do you get the one piece of information you need most…everything of value these people can offer you is available elsewhere, for free.

The group pitch is followed by individual meetings during which families are pressured to immediately pay for the services offered. Many yield to the pressure, writing checks in excess of $1,000 for a worthless set of services.

Don’t be the victim of financial aid con men (and women). There are lots of good websites offering free scholarship searches and financial aid advice. And, high school counselors and college financial aid counselors will gladly give you advice and answer your questions. There is no need to turn elsewhere.