Officials caution students against scholarship scams

By Jill Disis

Scholarships and financial aid remain a popular way to pay for college tuition for students just entering or continuing their college education, but financial aid scams still manipulate parents and students.

Several hundred thousand students and parents are defrauded by scholarship scams every year, according to finaid.org, a scholarship help Web site.

“The general advice we have for consumers is to make sure you check out the Web sites ahead of time,” said John Breyault, vice president of public policy, telecommunications and fraud for the National Consumers League.

Breyault said one of the most important rules is to watch out for services that require payments.

Sites that require payment should raise red flags to students, Breyault said. Nobody can actually guarantee scholarships to a person, he added.

Get The Daily Illini in your inbox!

  • Catch the latest on University of Illinois news, sports, and more. Delivered every weekday.
  • Stay up to date on all things Illini sports. Delivered every Monday.
Thank you for subscribing!

“Check out how the service works in writing,” Breyault said.

“If you have to provide a payment, make sure you can get your money back if it doesn’t work out.”

The Federal Trade Commission warns against many scams including “guaranteed” scholarships and “exclusive” scholarships that promise information not found elsewhere on the Web.

Others ask for a credit card or bank account information, claim to do all of the work for an applicant, enter students in a scholarship drawing without their knowledge or demand money, according to the FTC Web site.

Breyault said many Web sites exist with the goal of helping a person find out if a scholarship is valid.

“Make sure you check them out ahead of time,” Breyault said about questionable scholarship associations.

Sites such as guidestar.org or bbb.org are professional sites that exist for this purpose, he added.

“It’s something as simple as just googling the company that can help,” Breyault said.

Kevin Ladd, vice president of operations for scholarships.com, said there are some very secure ways to go about a scholarship search without worrying about whether a scholarship is valid.

“I genuinely believe that you should use a reputable source for finding scholarships,” Ladd said. “If someone submits a scholarship to our Web site, we make sure they’re not scammers.”

Ladd warned against Web sites that don’t seem legitimate or that seem questionable.

Bob Andersen, senior associate director of student financial aid, said scholarship scams are not very prevalent at the University.

“We haven’t had anything like that for a long time,” Andersen said.

Consumers are doing a good job of educating themselves, he added.

“I think people get more and more savvy every day,” Ladd said.

“Guaranteed” scholarships

Some Web sites claim to guarantee students and parents scholarships no matter what. Be aware that no legitimate Web site can guarantee a specified amount of money.

Exclusive information

Web sites asking for money in exchange for information students “can’t find anywhere else” are generally suspicious. Most information for scholarships is free to the general public and can be found anywhere.

Asking for personal information

Like many other types of internet scams, a scholarship organization asking for bank account or credit card information should be avoided.

Asking for money

Any service that wants students to provide money or subscribe to a search engine in exchange for a scholarship should be approached with extreme caution. Legitimate scholarships can be found using free search engines, and scholarships should cost nothing beyond a mailing or possible processing fee.

Source: Federal Trade Commission Web site