How to Avoid Scams When Searching
for Scholarships
Tuition and fees can add up to well over $30,000 at
some universities. Many parents hope their children can secure a scholarship
so that they can further their education without exhausting the family’s
savings. With scholarship dollars often hard to come by, and parents anxious
to get them, it’s no surprise that “scholarship fraud” is on the rise. In
fact, people taken in by scholarship scams lose a total of $100 million
annually, according to the college planning site
FinAid.org. The good news, according
to the Iowa Society of Certified Public Accountants, is that there are steps
you can take to avoid becoming a victim.
Question all fees
As a general rule, you should not have to pay an application fee to qualify
for a college scholarship or an education loan. Sometimes parents are taken
in by non-existent scholarships that require a fee to apply. Parents pay the
fees, then simply assume that their child did not qualify.
The Federal Trade Commission, which has studied
scholarship scams, does advise that some legitimate companies may charge
fees to search for scholarship information. If fees are required, find out
in advance what they cover and when and if refunds are available. Get this
information in writing before handing over any money, even a small amount.
Be wary of programs that request fees claiming to
“handle all the paperwork for you.” Legitimate scholarships generally
require the student or parents to file the application, so this claim is a
red flag that the offer could be a scam.
Ask for help
If you have doubts about any scholarship or funding program, consult your
child’s high school guidance counselor or another financial aid expert to
get some feedback. In some cases, even a legitimate scholarship advisory
group may offer to sell parents information about funding opportunities, but
experts in the field may be able to guide you to the same information for
free.
Don't believe in 'guarantees'
Legitimate scholarship programs do not guarantee that anyone will qualify
for any of their offerings. If a group does promise that you will receive
funds, it’s very likely that the organization is not trustworthy. Be wary,
too, if there is a lot of hype surrounding the scholarship or if you are
pressed to apply immediately in order to qualify.
Don't share personal information
A legitimate scholarship program should not require you to share your credit
card or bank account number or other financial information. Scam artists, on
the other hand, may tell you they need your personal data to confirm that
you’re eligible. They can then use this information to help themselves to
funds from your bank account, run up bills on your credit card, or commit
identity theft.
Consult the experts
Web sites such as www.FinAid.org
and www.collegeparents.org
offer information you can use to learn more about securing the education
funds you need without falling victim to a scholarship scam. In addition,
your local CPA can offer expert advice on the best ways to pay for those
high college tuition payments. Whether you have young children and want to
begin planning early or you are looking for ways to cover a teenager’s
looming tuition costs, a CPA can help. Consult him or her with questions on
any of your family’s financial issues. To access “Find a CPA” on the web, go
to www.findanIowaCPA.com.
