BBB warns of college scholarship, grant scams

Posted at 10:05 AM, Feb 20, 2013
and last updated 2013-02-20 12:11:24-05

The Better Business Bureau is a warning consumers about scams regarding scholarships and financial aid for college.

As college enrollment has grown, more students are looking for help in financing their education. College enrollment has increased 37 percent from 2000 to 2010, according to the National Center for Education Statistics.

The BBB has received complaints from parents and students who paid money up front to a company that promised find scholarships and grants but didn’t deliver.

As an example, companies may send prospective students letters explaining they have been selected for a personal interview and instead it is an invitation to a financial aid seminar.

Some BBB complaints say seminar attendees paid more than $1,000 for help finding aid, but the services offered were mostly assistance in filling out financial air forms.

The BBB identified the following as possible red flags:

  • “The scholarship is guaranteed or your money back.” In reality no one can guarantee that they will get you a grant or scholarship. The refund guarantees that are offered usually have so many conditions or strings attached that it is almost impossible for consumers to get their money back.
  • “You cannot get this information anywhere else.” Actually, scholarship information is widely available in books, from libraries and financial aid offices and on the Internet, if you are willing to search for it.
  • “We will do all the work.” Only parents and students can really determine and provide the financial information needed to complete the forms.
  • “You have been selected by a national foundation to receive a scholarship.” If you have not entered a competition sponsored by the foundation, this claim is highly unlikely.
  • “May I have your credit card or bank account number to hold this scholarship?” This is never a requirement for a legitimate scholarship offer.
  • “The scholarship will cost some money.” Legitimate scholarship offers never require payment of any kind.