Beware of Scholarship Scams

It happens every year. High school seniors and their parents are defrauded by scholarship scammers; people who promise to help them land scholarships and financial aid they wouldn’t otherwise receive.

Estimates vary, but it seems likely that these crooks…and that is an appropriate word…collect in excess of $100 million annually from unsuspecting families.

Because college costs scare nearly all of us, and because many people do not realize that there is money available to help them send their children to college, these scammers have found it very easy to find and exploit their victims.

The first contact between the scammers and their potential victims is a letter offering expert advice and assistance.

The letter often looks like it comes from a top college or university. Thats not an accident. The font, the grade of paper, and the logo are chosen by the scammers to give the letter an academic look. Its junk mail alright, and its far more malicious than most, but thats not what it looks like. As a result, instead of throwing the letter away, many families open it. Thats mistake number one.

The letters generally start by appealing to fearby talking about the high cost of college.

Once they have stated the problem…paying for college…they assure you they can provide the solution. They may offer to “teach you the secrets of financial aid”, “locate millions of dollars in unused scholarships”, or otherwise help you take advantage of their special expertise.

What all the letters have in common is that they invite families to a free seminar, often at a local hotel. Because the letter offers the hope of extra financial aid, and because the evening is free, many families accept the invitation. Thats mistake number two.

The meetings are run by well- practiced pitchmen who tell families they have the special knowledge and experience required to shake the most money off of the financial aid and scholarship trees. In reality, they want to sell you services and help which are readily…that’s right, readily… available elsewhere. At no cost.

After the group presentation, families are invited to meet individually with staff members sometimes called counselors. In the world of sales, these folks are called “closers”…folks trained to close the sale. Their job is to get families to sign a contract and pay a fee of up to $2,000 before leaving. Unfortunately, they succeed all too often.

Every year, a new set of potential victims come along. But, you and your family can avoid these masters-of-rip-off by turning to the people who really do have your best interests at heart…school counselors and college financial aid professionals.