Scholarship and Financial Aid Scams
Scholarship and Financial Aid Scams are an epidemic in the tuition financing industry. Need money for college? Doesn’t everybody? With tuition bills skyrocketing, and room and board going through the roof, students and their families are looking for creative ways to finance a college education. Unfortunately, in their efforts to pay the bills, many of them are falling prey to scholarship and financial aid scams.
ScholarshipJamaica.com cautions students to look and listen for tell-tale lines from potential scammers who are only on the hunt for your little savings and personal data. Look out for these tell-tale lines:
- “The scholarship is guaranteed or your money back.”
- “You can’t get this information anywhere else.”
- “I just need your credit card or bank account number to hold this scholarship.”
- “We’ll do all the work. You just pay a processing fee.”
- “The scholarship will cost some money.”
- “You’ve been selected” by a “national foundation” to receive a scholarship – or “You’re a finalist” in a contest you never entered.
If you attend a seminar on financial aid or scholarships, follow these steps:
- Take your time. Don’t be rushed into paying at the seminar. Avoid high-pressure sales pitches that require you to buy now or risk losing out on the opportunity. Solid opportunities are not sold through nerve-racking tactics.
- Investigate the organization you’re considering paying for help. Talk to a guidance counselor or financial aid advisor before spending your money. You may be able to get the same help for free.
- Be wary of “success stories” or testimonials of extraordinary success – the seminar operation may have paid “shills” to give glowing stories. Instead, ask for a list of at least three local families who’ve used the services in the last year. Ask each if they’re satisfied with the products and services received.
- Be cautious about purchasing from seminar representatives who are reluctant to answer questions or who give evasive answers to your questions. Legitimate business people are more than willing to give you information about their service.
- Ask how much money is charged for the service, the services that will be performed and the company’s refund policy. Get this information in writing. Keep in mind that you may never recoup the money you give to an unscrupulous operator, despite stated refund policies.
For students, differentiating between legitimate scholarship opportunities and scholarship and financial aid scams can sometimes be overwhelming and confusing. Every year an estimated 350,000 students and families in the USA fall victims of scholarship search scams, costing more than US$5 million annually. Free scholarship money is always great, but sometimes offers are just too good to be true.
When conducting your scholarship search, be on the lookout for these additional popular scams, so you can protect yourself and your money.
Cash up front: If you see a scholarship offer that requires you to send in an application or processing fee, this so-called “scholarship” is almost always a scam. Even if the offer adds a disclosure statement that guarantees a refund, money you send up front is almost never returned.
Free seminar: You may get an invitation or E-mail inviting you to attend a free seminar offering advice on financial aid and providing other helpful knowledge. While this may sound appealing, it’s often a trap.
Rewards without entries: You may have seen pop-up ads that scream, “Congratulations! You have just won a $100,000 scholarship to college! To obtain your reward, please send in a $1000 processing fee.” If you did not apply for a scholarship or enter in a specific contest for this money, this is probably a scam.
Time-sensitive scholarships: Time-sensitive scholarships do not mean scholarships with deadlines. Nearly all scholarships have a certain date by which an applicant must complete and submit their application. In contrast, time-sensitive scams are on a first-come-first-served basis.
Sweeping claims: Lastly, be aware of scholarship offers that make sweeping claims. If you see an offer that declares any of the following, stay away. “The scholarship is guaranteed or your money back.” In life, and in the financial assistance realm, nothing is guaranteed. Do not let this line fool you!