College Scholarship Scam

With the economy getting worse, there are growing concerns among parents about funding their children’s college education.  There are some common scams used by con artists.

1. Con artists send letters to parents offering loans.  In order to process the loan, the borrower must pay an application or service fee.  Once the fee is paid in advance, they are never heard from again.  Legitimate loans usually do not require advance fees.

2. You’ve probably heard about the Nigerian scam.  They send you a letter (with a check enclosed) notifying you that you’ve won money for college. You’re asked to send a check back for fees, taxes, or overpayment (the letter said you won $1000, but the check is made out for $1500., so you immediately get a second letter asking you to refund the difference). Your check gets cashed, and the one you received is returned for insufficient funds.

3. Swindlers send offers of loans on letterhead that looks similar to the Department of Education or another government agency. The Department of Education, however, doesn’t solicit consumers to borrow money, so any mail received is illegitimate.

4. Fraudsters claim that millions of dollars in scholarships go unused each year and then, for a fee, guarantee to secure a student a piece of that money. They may even offer to fill out the applications for the student.

5. Some people will try to charge you a fee to do a scholarship search; most their searches are done using a scholarship database that is free for anyone to use.  You can do the search yourself without paying any money at such sites as Sallie Mae’s web site or FastWeb.