Parents, avoid financial aid scams!

If you’re like thousands of other parents of high school students around the United States, you’re wondering just how exactly you are going to pay for college. You are not sure where to start sifting through the infinite amount of financial aid and scholarship information available, and that is totally normal.

The problem
But the quest for financial aid is a trap that more than 350,000 overwhelmed American high school students and their parents get sucked into each year. With the hopes of bypassing the financial-aid headaches and the never-ending and often confusing scholarship searches, some people turn to scholarship search services and seminars that guarantee scholarships in exchange for a fee. Sound too good to be true?

Most times, it is.

The scam
Financial aid scams come in many forms. Some are Web-based, some are in the form of seminars with aggressive sales pitches. Scammers prey on confused and overwhelmed parents and students and take your money without returning any results. These companies promise to find scholarships for students in exchange for fees from $10 to $500. Some scamming companies even get people to disclose their checking account number so the company can automatically withdraw money each week or month in exchange for scholarship “services.”

In these cases, scholarship searchers on a mission to save money on tuition end up losing money instead. It is rare that these companies will actually come through with free money that you couldn’t have found yourself. More than $5 million is lost each year to financial aid scams.

The government
Financial aid scams have become such a problem in the U.S. that the federal government has stepped in to help. In 2000, Congress passed the College Scholarship Fraud Prevention Act. This act explains the Federal Trade Commission’s role in protecting potential victims of scams. So far, the FTC has returned more than $560,000 to victims.

Prevention and alternatives
Even with the FTC’s help, you’re not immune to scams. The best way to prevent becoming a scam victim is to be aware of the alternatives to for-profit scholarship seminars and Web offerings. Take your financial aid search into your own hands.

To start, get legitimate federal student aid directly from the government. The Department of Education provides more than 70 percent of the financial aid granted to students in the United States. This aid comes in many forms, including grants, loans and work-study programs. To apply for federal aid, your student must fill out the Free Application for Federal Student Aid (FAFSA) each year he’s in college. You can acess the form online at www.fafsa.ed.gov.

You can also do scholarship research for yourself for free. Many community and religious organizations provide scholarships for students, as do local businesses, banks and colleges. There are scholarships out there for students of all qualifications. The Internet is also a great resource for scholarship information. Just be cautious when considering giving money to anyone in exchange for scholarships!

Get involved

Armed with a list of helpful Web sites and the knowledge that you can rely on information from people you trust, you should have no problems avoiding scholarship scams. You can even help stop scholarship scams by reporting any problems you come across to the FTC, the National Fraud Information Center or the Better Business Bureau.

There are scholarships out there waiting for you to find them! You can successfully find them on your own. Though it might take a little work, your efforts will pay off in the end.

Liz Rosenthal is from Beverly, Mass., and a recent graduate of Mary Washington College in Fredericksburg, Va. She is an intern for The Next Step Magazine.

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