The Education Blog

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.

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.

One financial aid organization believes these scammers defraud families out of more than $100 million dollars a year.

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.

What all the letters have in common is that they invite families to a free seminar, often at a local hotel. Because the letter offers the hope of extra financial aid, and because the evening is free, many families accept the invitation. Thats mistake number two.

The meetings are run by well- practiced pitchmen who tell families they have the special knowledge and experience required to shake the most money off of the financial aid and scholarship trees. In reality, they want to sell you services and help which are readily…that’s right, readily… available elsewhere. At no cost.

After the group presentation, families are invited to meet individually with staff members sometimes called counselors. In the world of sales, these folks are called “closers”…folks trained to close the sale. Their job is to get families to sign a contract and pay a fee of up to $2,000 before leaving. Unfortunately, they succeed all too often.

Its sad. And, it happens every year. Dont let it happen to you. Get all of your financial aid advice from your school counselor, college financial aid office, and reputable publications and websites.