Tips for Consumers from your Better Business Bureau (R)
Some Scholarship Offers Take Money, Not Give It
With the first day of classes only weeks away, offers for "guaranteed" scholarships, grants and loans may look very attractive to those college students who didn't qualify or apply for financial aid. But before signing up, the Better Business Bureau warns students to do their homework.
BBBs report that unethical scholarship companies are "guaranteeing" to "match" students with sources of funding, regardless of their academic qualifications, scholastic credentials or family economic status. Some advertisements and sales pitches claim there are millions of dollars in unclaimed scholarship monies just waiting to be tapped. However, in BBBs' experience, few, if any, students receive funds.
In exchange for an up-front fee, which can range from $50 to several hundred dollars, students receive lists of possible scholarship sources. While the company making the offer may claim scholarships are "guaranteed," prospective students should understand that only the sources actually granting the funds can guarantee approval.
These scholarship companies do not assist students in obtaining scholarships and they do not screen applicants. After purchasing the lists, it is the students' responsibility to research and contact each organization with a possible funding source.
Although many ads offer "money back guarantees" or $200 savings bonds to students who don't receive any scholarship sources or funds, students who are unsuccessful, or not satisfied, may find that refunds are difficult, if not impossible, to obtain. The company may require students to prove, through documentation, that they were denied a scholarship by every source on the list.
Many of the scholarship sources that these companies provide for a fee, are available at no cost from high school guidance offices, in the reference sections of libraries or from the financial aid office of the college the student is planning to attend.
For a reliability report on a scholarship company, consumers should call the Better Business Bureau where the firm is located. For a copy of the BBB's booklet, "Tips on College Financial Aid," send a self-addressed, business-sized envelope and $2 for postage and handling to:
Council of Better Business Bureaus
Washington, DC 20042-0023.
Copyright 1994 Council of Better Business Bureaus, Inc. May be reprinted in whole or part with attribution.
Council of Better Business Bureaus, Public Affairs Dept., 4200 Wilson Blvd., Arlington, VA 22203 (703) 276-0100 Fax (703) 525-8277
The name Better Business Bureau is a registered servicemark of the Council of Better Business Bureaus, Inc.
Federal Agencies Release First Annual Report to Congress on College Scholarship Fraud: The Report Highlights the Efforts of the FTC, DOJ, and Department of Education To Combat Scholarship and Financial Aid Fraud. (May 1, 2002)
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