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6 Beware of Scholarship Scams




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This article is from the Financial Aid, Scholarships, and Fellowships FAQ, by Mark Kantrowitz with numerous contributions by others.

6 Beware of Scholarship Scams

College costs a lot of money, and there are some companies that try to
take advantage of students and parents. The lure of "FREE MONEY" can
fool even skeptical people.

Every year there are a few scams based on imitations of legitimate
foundations and scholarship search companies. Be cautious if you must
pay money to get money -- it almost certainly is a scam. Foundations
are set up to give money away, not get it. A $10 or $20 application
fee may seem rather innocuous, but if the "foundation" receives a few
thousand applications, they can pay out a $1,000 scholarship or two
and still pocket a hefty profit, if they give out any money at all.
The most common types of scholarship scams are scholarships with an
application fee, scholarship matching services that guarantee results,
and high pressure sales pitches disguised as a free financial aid
seminar.

If you have questions about financial aid or are suspicious about a
program, go to your college's financial aid office. (If you are still
in high school, ask the financial aid office at a local college for
advice.) They can provide you with the accurate and current
information, and verify whether a foundation is legitimate.

The FinAid site includes an extensive collection of information about
identifying the many types of scams, how to report them, pending
legislation concerning scholarship scams, and law enforcement efforts
to date. See
http://www.finaid.org/scholarships/scams.phtml
for more information.

 

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