St. Paul, Minn. (May 25, 2011) – The academic year is winding down, and many high school students are preparing to apply for financial aid as tuition costs continue to rise.
Each year, millions of people depend on grants and scholarships to pay for college. Navigating the process of applying for financial aid can be confusing and some companies claim they can help, but often only end up charging fees for information and assistance the student can already get for free elsewhere.
The Better Business Bureau of Minnesota and North Dakota recommends doing your research before paying a company to find financial aid for college.
During the 2009-2010 school year, $94 billion in grants were made available to college students to help cover education costs, according to The College Board. Sources of the funding included federal and state government, institutions, private entities and employers.
“Times are tight and many families desperately want to tap into the well of scholarships and grants to help their kids go to college,” said Dana Badgerow, president and CEO of the BBB. “Unfortunately, some companies are trying to take advantage of this situation. The good news is that all the information you need is already available for free.”
Every year, the BBB receives complaints from parents who paid money upfront to a company that promised to find scholarships and grants for their child but ultimately didn’t deliver.
The BBB recommends listening for the following red flags when receiving the sales pitch from a financial-aid finder:
• “The scholarship is guaranteed or your money back.” In reality no one can guarantee that they will get you a grant or scholarship. The refund guarantees that are offered usually have so many conditions or strings attached that it is almost impossible for consumers to get their money back.
• “You cannot get this information anywhere else.” Actually, scholarship information is widely available in books, from libraries and financial aid offices and on the Internet, if you are willing to search for it.
• “We will do all the work.” Only parents and students can really determine and provide the financial information needed to complete the forms.
• “You have been selected by a national foundation to receive a scholarship.” If you have not entered a competition sponsored by the foundation, this claim is highly unlikely.
• “May I have your credit card or bank account number to hold this scholarship?” This is never a requirement for a legitimate scholarship offer.
• “The scholarship will cost some money.” Legitimate scholarship offers never require payment of any kind.