Watch out for scholarship scams

December 31, 2012

While filling out scholarship applications could ultimately lead to being awarded financial aid for school and lessen the cost of higher education, some experts point out that students should be cautious about certain programs offering scholarships for college.

Trib Total Media spoke with Mark Kantrowitz, publisher of FinAid and FastWeb, who outlined several methods scam artists use to swindle aspiring, and sometimes oblivious, college students.

"There is one scholarship that gives out 180 $1,000 scholarships, and they charge a $3 application fee," he told the news provider. "That sounds innocent enough, until you hear they received over 100,000 applications. That‘s $300,000, and they‘re giving away $180,000. That‘s a scholarship for profit. They‘re just recirculating the students' money."

He emphasized that any scholarship that requires a processing or application fee is probably not on the up-and-up.

"Scholarships are not about getting money; they are about giving money," he said.

The news source also pointed out the Federal Trade Commission and the Pennsylvania Higher Education Assistance Agency state that millions of dollars are spent on fraudulent scholarship or loan programs every year.

Other things to keep an eye out for
The Federal Student Aid office of the U.S. Department of Education offers a comprehensive guide for students hoping to avoid getting ripped off.

The agency echoes Kantrowitz's advice - that students should never pay when they apply for financial aid. Phrases in promotional materials to look out for include "Buy now, or miss this opportunity," "We guarantee you'll get aid," and anything along the lines of "I've got aid for you; give me your credit card or bank account number." Requests for credit card or bank accounts numbers may be part of an identify theft scam.

An article on contends that not every scholarship program that asks applicants to pay a fee is a scam, but there are a few dead giveaways students should remember.

These include requests for a fee without any information on how to go about getting a refund and companies that say they'll let you in on scholarship database secrets, for a price. Any offer that tells a student he or she must send money to keep more money "on hold" and free seminars that end with what sounds like a sales pitch are also to be kept away from, according to the news source.

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