What About Scholarship Search Services
that Contact Me?
Many private scholarship search services provide sources of financial
assistance. You should be aware that we do not evaluate those services.
If you decide to use a service, check its reputation by contacting the
Better Business Bureau or a state attorney general’s office.
How Can I Tell These Search Services Aren’t Scams?
Are There Any Signs I Should Look For?
Estimates show that families lose millions of dollars to scholarship fraud
every year. The College Scholarship Fraud Prevention Act provides protection
against fraud in student financial assistance. The Federal Trade Commission
(FTC) cautions students to look for these telltale 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
- “We’ll do all the work.”
- “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.
WHAT IS A SCHOLARSHIP SEARCH SERVICE?
A number of privately operated scholarship search services charge fees
that can range from $50 to well over $1,000. It is important to understand
what information scholarship search services can provide. Some can be
helpful in identifying sources of aid for students who meet certain criteria,
such as academic achievement, religious affiliation, ethnic or racial
heritage, artistic talents, athletic ability, career plans, or proposed
field of study. However, bear in mind that funds from these sources are
usually limited and not all applicants will receive awards.
Listed below are some of the services you might reasonably expect from
a private scholarship search service.
Most scholarship search services provide a list of sources of financial
assistance you may apply for. After studying the list, you then send a
separate application to each source that interests you. The scholarship
search service does not apply on your behalf or pay any additional application
fees that may be required.
Many search services offer to refund your fee if you do not receive any
award. However, some services require you to provide a rejection letter
from every source on the list to claim your refund. You should be aware
that many scholarship sources do not routinely send rejection letters.
Make sure you get the scholarship search service's refund policy in writing
before paying any money.
What Are Some Questionable Tactics I Should Watch Out For?
- Some services will tell you that millions of dollars in student aid
go unclaimed every year. The large figures you may hear or read about
usually represent an estimated national total of employee benefits or
member benefits. Usually, such benefits are available only to the employees
(and their families) of a specific company, or to the members of a specific
union or other organization.
- Some claim that you can't get the same information anywhere else.
Many services make you pay to get information you could have received
for free from a college financial aid office, state education agency,
local library, the U.S. Department of Education, or the Internet. Remember
that you can find out about student aid without paying a fee to a search
- Others request your credit card or bank account number to hold student
financial aid for you. Search services do not, in most cases, provide
any awards directly to applicants, apply on behalf of applicants, or
act as a disbursing agent for financial aid providers. You should never
give out a credit card or bank account number unless you know the company
or organization you are giving it to is legitimate.
- Others try to get you to send them money by claiming that you are
a finalist in a scholarship contest. Most sources of financial aid have
application deadlines and eligibility criteria; they do not, generally,
operate like a sweepstakes.
Scholarship seminars frequently end with one-on-one meetings in which
a salesperson pressures the student to "buy now or lose out on this
opportunity." Legitimate services don't use such pressure tactics.
Each year, the U.S. Department of Education receives numerous complaints
from students and parents who did not receive the information they expected
from a search service. The Department does not evaluate private scholarship
search services. If you decide to use one of these services, you should
check its reputation by contacting the Better Business Bureau (www.bbb.com),
a school guidance counselor, or a state attorney general's office. Additionally,
investigate the organization yourself before making a commitment:
- Ask for names of three or four local families who have used its services
- Ask how many students have used the service and how many of them received
scholarships as a result.
- Find out about the service's refund policy.
- Get everything in writing.
Read all the fine print before signing anything.
The Scholarship Fraud Prevention Act created a fraud-awareness partnership
between the U.S. Department of Education and the Federal Trade Commission
(FTC). For more information about scholarship scams or to report a scam,
call the FTC toll free at 1-877-FTC-HELP (1-877-382-4357) or go to www.ftc.gov/scholarshipscams
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