The Better Business Bureau says it's hearing complaints from college students and their parents about being bilked by companies that promise financial help but don't deliver. Most of the time, the companies charge for filling out basic forms, and in the past, parents have found that the forms weren't even filed."Times are tight and many families desperately want to tap into the well of scholarships and grants to help kids go to college," said Stephen A. Cox, president of the Council of Better Business Bureaus. "While some companies are trying to take advantage of struggling families looking for funding, the good news is that all of the information you need is already available for free."
They're warning about two companies in particular:
Edifi-College Financial Aid sends prospective students a letter saying that "they have been selected" for a personal interview. When students call, they're scheduled for a seminar in which they're told they have to pay $1,000 for help. The help, complaints say, involves filling out financial aid forms.
J.E.C.C. Inc. was the object of complaints from college applicants who thought they were receiving a free CD with tips and financial help. Instead they were charged as much as $69 and many never received any information.
In September of last year, the BBB warned consumers about a company called Edifi for similar reasons. At the time, Edifi's president said that his company was being unfairly characterized by the BBB.
College ed scams have taken other forms as well. Students have received emails or letters offering "Free Grant Money," with checks allegedly linked to private or government grants. When they deposit the check, consumers are told to wire a small amount of money back to cover processing fees.
But the checks turn out to be fake and victims end up having to cover wire fees as well as any money they wrote against the checks. In one case, a University of Wisconsin student was told that he'd received $25,000 in grant money. He deposited one "check" for $5,000 and wired $500 to the scammers before the swindle was discovered by his bank.
Officials say that consumers should watch for these red flags:
1. A promise of guaranteed aid or your money back. No one can promise a grant or loan, and questionable companies make it impossible to get your money back.
2. "You cannot get this information anywhere else." Most information related to college aid can be found in books, libraries and financial aid offices. Ask a librarian or a guidance counselor to direct you.
3. You have been selected by a "national foundation" to receive a scholarship. Unless you personally have entered a competition, chances of being chosen are rare.
4. "The scholarship will cost some money." Real scholarships don't require the recipients to pay.
5. Credit card or bank account required. Legitimate funds don't ask for this information.
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