In recent years, consumer complaints against scholarship, loan, and grant services to the BBB have risen significantly. In 2006 alone, consumer complaints against these services to BBBs across the U.S. increased by 60 percent.
"Funding a college education is expensive, and finding money for college can be an intimidating process," said Robert Andrew, President and CEO of the BBB serving Alaska, Oregon, and Western Washington. "The fallout from this year's student loan scandal, combined with the efforts of tireless scammers, means there is a real trust crisis in the financial aid industry. There are many deceitful scammers and businesses taking advantage of overwhelmed parents who are just trying to put their child through school."
College-bound students receive e-mails from companies like College Money Matters stating they've been accepted to attend a free financial aid seminar. The seminar essentially ends up being a sales pitch and, for a fee, the company offers to submit the student's Free Application for Federal Student Aid form and find college scholarships and grants for the student.
Victims of this type of scam who contacted the BBB reported they paid between $700 and $1,000 and never heard from the company again. Not only did they not receive the promised services, many discovered that the FAFSA form was never even filed.
Students receive e-mails or letters stating they qualify for free private or government grant money as financial aid. The grant is then sent to the student in the form of a check with instructions to deposit the check into their account and then wire a small amount of the money back to cover processing fees. Ultimately, the checks end up being counterfeit and victims end up having to pay the bank back for the withdrawn money on top of losing their own money which was wired to the scammers.
Avoid being duped by claims like "the scholarship is guaranteed or your money back." These guarantees often have so many conditions and strings attached that it is almost impossible for consumers to get their money back.
If you are looking for scholarship information, don't believe the line "you can't get this information anywhere else."
Scholarship information is widely available in books and pamphlets from libraries and financial aid offices, as well as on the Internet.
For more information on scholarship and grant scams, as well as to get a reliability report on a specific company in the financial aid industry, visit www.thebbb.org.