BBB Warns: Don’t Fall for Scholarship Scams

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Better Business Bureau

By The Staff

High school students and their parents are often concerned about upcoming college expenses. The Better Business Bureau urges students and parents to be cautious regarding offers from scholarship services and organizations that require upfront fees to apply for or search for scholarships.


A local consumer says his son was contacted by Edifi-College Financial Aid Services. The company has an “F” rating with the BBB. The company says it assists clients in planning for college. Edifi mails prospective college students a letter (see letter below) advising them they have been selected for a personal interview. Students who call for the interview are scheduled for a financial aid seminar along with other students and parents. At the seminar, parents are given the option to purchase services at a charge of approximately $900. The company’s primary service is assistance filling out financial aid forms. For a complete report on the company, go to www.bbb.org/upstate-new-york/business-reviews/scholarships-and-financial-aid/edifi-college-financial-aid-services-in-albany-ny-24001253/.



There are varieties of scholarship scams. Here is what to look out for:


1. Scholarship search organizations often fail to make good on promises.  In exchange for upfront fees, students may receive lists of possible scholarship sources but, in most cases, the organization does not assist students in obtaining the listed scholarships. In other instances, individuals never hear from the organization after paying the fee and supplying all requested information. Typically, scholarship search services send mailings to schedule “interviews,” usually targeting parents of high school students. These “interviews,” usually at a local hotel, are little more than sales pitches for scholarship information services costing $900 or more. Almost always, any information provided by these services is available free from other sources.

2. Advance fee scholarship applications require an upfront fee to apply for a scholarship but, in some cases, the organization refuses to provide documentation that any scholarships are awarded. If you check the company, you’ll often learn that it has a bad record with the BBB. The companies will often collect application fees, but award no scholarship.

Obtaining free scholarship information can begin with high school counseling offices, college financial aid offices, and research at public libraries, bookstores, or on the Internet. Consider all available options, including federal, state, and local aid programs, financial institutions’ loan plans; and a wide variety of scholarships, fellowships, or other programs offered by colleges. Many reputable and well-known private organizations and businesses also offer scholarships to students.

Individuals interested in using a scholarship service are urged to investigate the background of a company using the Better Business Bureau’s website, www.bbb.org, or by calling the BBB at (502) 583-6546 or 1-800-388-2222 for a reliability report. Ask the company to put details of its services and promises in writing, including the refund policy. Finally, be suspicious of “guaranteed offers.” Any guarantee that “you will win a scholarship” or “your money back if not satisfied” is as good as the organization behind the guarantee. So even with a guarantee, it’s important to know that you are dealing with a reputable and reliable organization.