Scholarship scams prey upon studentsApril 9, 1997
By Tamara Waite
As tuition costs climb at colleges and universities nationwide, more and more students are seeking and relying on financial assistance to help pay for their education.
Scholarships are often the most appealing form of financial aid for students and potential students because they require no campus work-study jobs and do not have to be repaid.
The search for scholarship money, however, has led some students into scams that end up costing them more time and money than they bargained for.
Nearly 300,000 people fall prey to scholarship scams each year, according to the National Association of Student Financial Aid Administrators. Combined, the victims of the scams lose more than $50 million annually--money that could have gone toward paying tuition.
Among the most popular forms of scholarship scams are scholarship search services that guarantee they will either provide applicants with scholarships or return their money.
These services, targeted primarily at high school seniors and college freshmen, lure students in by promising to deliver large sums of hidden or unclaimed scholarship money. What the unsuspecting parents and students who use the search services do not realize is that in reality, more than 96 percent of all available scholarship funds are distributed to students each year, according to a press release from state Attorney General Dan Morales.
Some scholarship search firms require applicants to pay a designated fee before any searching begins and guarantee a full refund if the students do not win scholarships.
Students become victims of this scam when they fail to read the fine print in the contract or application, according to University director of financial aid Jeanette Kucera.
'If students are going to use a scholarship search service, they should exercise caution,' Kucera said. 'They should understand exactly what they are applying for and be sure that they meet all of the criteria necessary to receive a refund if one is promised.'
Kucera added that the Office of Academic Scholarships and Financial Aid does not recommend scholarship search services to University students or prospective students.
According to Morales, even the legitimate financial aid search firms offer little scholarship information to students that they could not find themselves at the local library, on the Internet, or at a high school or college financial aid office.
A guidance counselor at Waco High School agreed, saying that students who have used the search services have found no more through those services than they have through using scholarship lists and other financial aid resources the school provides. Waco High does not promote the use of scholarship search services.
*****Possibly a box with the following information?*****
Common tip-offs to a scholarship scam--from Attorney General Dan Morales
Avoid agencies that claim access to scholarships you will not find anywhere else or that are not readily available to the public.
Be suspicious of services that claim they will do all of the work for you.
Question firms that say you have been selected by a national foundation or you are a finalist in a scholarship competition.
Read the fine print for guarantees of a scholarship or your money back.
Never give your bank account or credit card number to an agency to reserve a scholarship.
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