As the June 30th federal FAFSA deadline approaches, many students are on the hunt for grants or scholarships to offset the rising cost of college tuition. According to the National Center for Education Statistics, the average tuition for 4-year institutions hovers around $22,000, presenting a substantial financial hurdle for many. Unfortunately, scammers exploit this stress, preying on students and parents seeking financial aid.
Scammers lure unsuspecting victims with promises of scholarships or grants, often demanding upfront “fees”. In a newer twist, some scams even claim to assist with student loan forgiveness. Consequently, caution should be exercised when encountering websites, seminars, or schemes promising financial aid packages or scholarships for a fee.
Understanding the Scams:
The modus operandi varies, but the scam typically involves a supposed representative from a government body, a university, or a nonprofit organization. These individuals pose as financial aid representatives, using official-sounding terms like “National” and “Federal”. They may announce that you’ve won a scholarship or grant (despite you not applying) and request a one-time “processing fee”. Alternatively, they may pressure you to apply for a “guaranteed” scholarship or grant that requires an application fee. After paying, the promised funds never arrive and the company makes it nearly impossible to obtain a refund.
Given the sensitive personal and financial data required for grant and scholarship applications, it’s crucial to remain vigilant. On average, students receive just over $5,000 from federal grants like FAFSA and more than $11,000 from institutional grants. Despite varying amounts depending on the institution, applying for grants and scholarships can significantly alleviate the financial strain of college tuition.
Visit studentaid.gov for comprehensive information about financial aid options.
To shield students and parents from scholarship scams, the Better Business Bureau offers the following advice:
- Be wary of unsolicited offers. Winning a scholarship or grant you didn’t apply for is generally not plausible.
- Take your time. If you’re being rushed to act to avoid missing out, exercise caution.
- Ask questions. If the company or representative dodges your inquiries, it’s best to step away. Consult your guidance counselor or a college financial aid office about their experience with the company.
- Be skeptical of success stories on websites or at seminars. Request contacts of families in your community who’ve used the service in the past year and ask about their experiences.
- Remember, even if a bank says a check has “cleared,” it can still bounce weeks later. Always ensure the funds have cleared fully before drawing against them.
ABOUT BBB: The Better Business Bureau has been helping people identify trustworthy businesses, brands, and charities for over 110 years. In 2022, people relied on BBB more than 250 million times for BBB Business Profiles on over 5.3 million businesses and Charity Reports on about 12,000 charities, available for free at BBB.org.
BBB serving Akron was established in 1920, and services Ashland, Medina, Portage, Richland, Summit, and Wayne Counties. The International Association of Better Business Bureaus is the umbrella organization for the local, independent BBBs in the United States, Canada, and Mexico.
