How To Protect Yourself From Financial Aid And College Scholarship Scams

College funding consultants have been providing college financial aid services for the past 20 years.  These college funding consultants are in high demand now because of how complicated, confusing and incredibly expensive college has become. The increasing demand for these consultants providing financial aid services has led to an increase in the number of them across the country.

How You Can Spot A College Scholarship Scam

Most college funding consultants are honest hard working professionals. But as with any profession there are less then ethical college funding consultants. Unfortunately, too many of them are making false claims regarding their college financial aid services. Too many college funding consultants claim they can help families receive thousands and thousands of dollars in unclaimed free college scholarships. They assert that there are millions and millions of unclaimed scholarship just waiting for someone to claim the funds.

What You Should Look Out For

The College Planning Network cautions students and parents to look and listen for companies using misleading marketing material illustrated below:

• We’ve already secured full funding for your college and it costs $39.95
• The scholarship is guaranteed or your money back
• You’ve been selected by a “national foundation” to receive a       scholarship.
• We have you scheduled for an “interview”
• Status: preferred status
• If you enroll tonight the cost is only $…

Some College Consultants Use Phony Guarantees

If you encounter a college financial aid consultant offering either one of the two guarantees listed below do not do business with them. Read the guarantees.  They sound great, but as you’ll see, they are grossly misleading.

1. The first common guarantee is: they promise a minimum of $2500 in aid, or they will refund the fee you paid them.
2. The second common guarantee is: they promise you 100% of the money you need to send your child to school, or they will refund the fee you paid.

The first common guarantee is actually a federal entitlement that the college consultant is passing off as his or her own guarantee. The fact of the matter is all you have to do to be guaranteed $2500 in the form of a student loan is complete the FAFSA and have your EFC $2500 less than the total cost of attendance. We think it’s dishonest to pass off a federal entitlement as your personal guarantee, and it leaves us wondering what else they lying to you about.

The second common guarantee you are entitled to also comes from the Federal Government. All you have to do is complete the FAFSA form and be credit worthy, and you qualify for 100% of the difference between the aid you receive and the total cost of attendance in the form of the PLUS loan. How’s that for another grossly misleading guarantee?

As you move forward with seeking guidance and learning the ins and outs of the college process please be aware of these less than reputable firms touting frivolous college services. It is a small percentage of the industry but nonetheless, one to keep an eye out for.