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BBB of Wisconsin Warns of Scholarship Scams

Tuesday, July 5th, 2022 -- 10:01 AM

As the June 30 federal FAFSA deadline has passed, many students are searching and -applying for grants and scholarships to fund their college education.

With an average tuition of approximately $22,000 at 4-year institutions, according to the National Center for Education Statistics, paying for a college degree is a challenging obstacle for prospective students.

A challenge that is made more difficult by the presence of scammers looking to take advantage of students and parents searching for financial aid opportunities. The Better Business Bureau receives numerous reports of scholarship scams every year.

Multiple reports have already been submitted to BBB Scam Tracker in 2022, detailing consumer interactions with unethical businesses claiming to provide students financial guidance. For students struggling to pay tuition, a sudden offer of a grant or scholarship can look like a dream come true.

But it could be bait for a scam. This con hooks victims with the promise of money, but upfront “fees” never actually materialize into those much-needed funds. In a more recent twist, these scammers claim to help with student loan forgiveness.

Better Business Bureau recommends caution when dealing with companies that offer assistance in finding financial aid opportunities. Students and their families should be wary of websites, seminars, or other schemes that promise to find scholarships, grants, or financial aid packages for a fee.

To protect students and parents searching for financial aid opportunities from falling victim to scholarship scams, the Better Business Bureau recommends following these guidelines:

  • Beware of unsolicited offers;
  • Take your time;
  • Ask lots of questions;
  • Ask your guidance counselor or a college financial aid office whether they have experience with the company;
  • Be skeptical of glowing success stories touted on websites or at seminars;
  • Ask about fees associated with a professional financial aid search and find out if the company provides refunds;
  • Be aware that a check can bounce even after the bank allows cash withdrawal from the deposit.

To report a scam, go to BBB Scam Tracker. To learn how to protect yourself, go to “10 Steps to Avoid Scams.”

Feel free to contact us with questions and/or comments.