How to avoid Engineering Scholarship Scams

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Scams Student or parents needs to be able to recognize the scholarship fraud profile.
Following are top 10 Scholarship Scams. 1. The free seminar scam. Overwhelmed by
all the information out there? Want to make the best financial aid decisions for you or
your child? Often a free financial aid seminar is no more than a 鈥渃 ome-on 鈥?for
insurance sales pitches, matching services or investment products. Signs that should
make the warning bells go off: Are they using the hard sell? Sign-up today or the price
shoots up tomorrow? Can only answer certain questions after you pay their fee?
Wants your credit card information to 鈥渉 old 鈥?a scholarship for you? Your ears
should be ringing by now. Remember, if you receive help from a consultant, he or she
must sign the Free Application for Federal Student Aid (FAFSA). If the seminar sales
rep refuses to do so, it is another alarm bell. And never let a company consultant
suggest that you adjust your income on the FAFSA in order to receive more aid. It 鈥
檚 unethical (a crime even). And it can backfire, big time. 2. Scholarships for profit.
Scholarships are designed for many purposes 鈥攔 ecruit talented athletes, assist low
income applicants, encourage study in an academic discipline, promote campus
diversity, attract the best students 鈥攂 ut profit should never be one of them.
Scammers that award modest scholarships of $1,000 (or no scholarship at all) can
collect many times over that amount in fees by attracting thousands of applicants. You
may only be out the 15 bucks or so, but multiple that by 1,000 scholarship hopefuls
just like you and you just made for a nice payday for the scholarship scam artist.
Being denied such a scholarship does not make you undeserving 鈥攂 ut just one more
scammed applicant. 3. The advance-fee loan. A low-interest loan with an upfront fee?
Don 鈥檛 think so, and neither should you. Legitimate lenders deduct fees from at the
time disbursement checks are issue; they do not charge fees before paying out the loan
to a borrower. Be wary of any lender that asks for money upfront 鈥攖 hat is a loan
that will likely never materialize. 4. Your Financial Aid Office. Huh? Your college
Financial Aid Office is a credible and free resource for education funding. But beware;
the Education Department recently banned the practice of lenders offering financial
incentives to universities that recommend their service as a preferred lender (the
university often receiving a 鈥渃 ut 鈥?for the loan). The move was prompted by
investigations showing that some university officials accepted gifts, payments or
stock on favorable terms in exchange for such practices. In other instances, marketing
representatives for lenders staffed phones at student aid offices. In an $85 billion
student loan industry, you have to ask yourself if your university steered you to the
lender with the best rate available, or simply the one lining their pockets. Ouch. 5.
The guaranteed matching service. If Match.com can 鈥檛 guarantee you Prince
Charming and firmer abs, scholarship matching services cannot guarantee you money
in the bank. Matching services that promise guaranteed matching sources for a
processing fee of $49.95 (and much higher) will at best provide you with information
available for free on the web. Take note that these services often inflate their database
when an individual sponsor offers hundreds of scholarships. The Better Business
Bureau (BBB) reports that many of the sources provided by scholarship matching
services are inaccurate and 鈥渇 ew, if any at all, receive the actual funds 鈥? The
BBB adds that information provided is often out of date, providing sources for
deadlines that have long passed. And never mind that money-back guarantee 鈥攊 t
comes with more hoops to jump through than any dog-and-pony show you could ever
imagine. 6. Linked products. Don 鈥檛 let any sales person ever convince you that a
financial product, such as student life insurance, or an annuity, must be purchased to
qualify for federal student financial aid. It just isn 鈥檛 so. And it is a sure fire scam.
7. The telemarketer. Telemarketing was once the biggest bugaboos of scholarship
fraud when the FTC first addressed scholarship scams in the 90s. Attention more
recently has shifted to bogus financial aid and scholarship seminars, and deceptive
practices among consultants. That does not mean that telemarketing scams still do not
surface. The U.S. Department of Education warned consumers recently about
telemarketing scammers posing as U.S. Department of Education (ED) officers
offering grants to students for a $249 processing fee (by requesting a bank or credit
card number). Contact the DOE 鈥 檚 Office of Inspector General at
1-800-MIS-USED              begin_of_the_skype_highlighting,           1-800-MIS-USED,
end_of_the_skype_highlighting (1-800-647-8733begin_of_the_skype_highlighting,
1-800-647-8733, end_of_the_skype_highlighting) or oig.hotline@ed.gov to learn
more. 8. Guaranteed financial aid consultants. What can you expect for your fee from
a financial aid consultant? Help completing the FAFSA, estimating your expected
family contribution (EFC), and advising you or child on types of aid. Information and
assistance that is readily available and free from a financial aid office at any university,
your local library, on the web, or from a high school guidance counselor. So what is
free, free, free information worth to you? Plenty, if you pay fees to a financial aid
consultant to get it. Some may want the handholding of a consultant regardless. Then
be aware of deceptive claims that should send you looking for help from other sources.
A financial aid consultant may guarantee a minimum $2,500 in aid or promise to
refund your money. That 鈥檚 nice, but misleading. Yes, you will no doubt receive
that $2,500 student loan, but then so will every applicant who completes the FAFSA
(free and on the web at www.fafsa.ed.gov). A federal entitlement available simply by
completing the FAFSA should not be misrepresented or misconstrued as aid a
consulting company can uniquely guarantee you as an enticement. Likewise, if a
consulting service guarantees you will receive every last penny to ship your child off
to school (or your money back), you should not be fooled. You guessed it, another
federal entitlement that is a byproduct of completing the FAFSA. That and a decent
credit rating will earn you a PLUS loan for 100 percent of the total cost of attendance
for you or your child. It is just good sense to steer clear of any company that entices
clientele with benefits that are freely available to all students completing the FAFSA
(whether they pay pricey consulting fees or not) as a federal entitlement. Remember,
if a consulting agency is completing a FAFSA (or any other form) on your behalf,
review, sign it, and mail it yourself. You should maintain copies of the completed
FAFSA and expect a refund if it is incorrect. And always agree to a flat fee for
financial aid consulting services, never a percentage of aid received. Qualifications to
consider when screening potential financial aid consultants include whether the
consultant has experience at a financial aid office and is a Certified Public Accountant.
Never be hesitant to ask for references. 9. The sweepstakes scholarship. Lucky you!
You have just been selected as a finalist to win a scholarship in a sweepstakes that you
never entered. (And you thought you never won anything.) The only obstacle standing
between you and collecting your winnings is paying the redemption fee. Be wary of
contests, websites and scholarships that collect personal data, payout a single
dollar-amount (play the lottery today?) and repay the kindness with a barrage of
advertisements. Which brings us to our next popular scam tactic. 10. The redemption
fee. Common catchphrases by the scammer are disbursement fee, redemption fee, or
processing fee. Notice the common denominator here? Legitimate scholarships do not
ask a student to pay for an award. Be wary of any money awarded to you out of the
blue that comes with strings, especially those with strings attached to your
pocketbook.

				
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