BBB WARNING: SCHOLARSHIP SEARCH SERVICES Tips for Consumers from your Better Business Bureau (R) July/August 1994_ SOME SCHOLARSHIP OFFERS TAKE MONEY, NOT GIVE IT With the first day of classes only weeks away, offers for "guaranteed" scholarships, grants and loans may look very attractive to those college students who didn't qualify or apply for financial aid. But before signing up, the Better Business Bureau warns students to do their homework. BBBs report that unethical scholarship companies are "guaranteeing" to "match" students with sources of funding, regardless of their academic qualifications, scholastic credentials or family economic status. Some advertisements and sales pitches claim there are millions of dollars in unclaimed scholarship monies just waiting to be tapped. However, in BBBs' experience, few, if any, students receive funds. In exchange for an up-front fee, which can range from $50 to several hundred dollars, students receive lists of _possible_ scholarship sources. While the company making the offer may claim scholarships are "guaranteed," prospective students should understand that only the sources actually granting the funds can guarantee approval. These scholarship companies do not assist students in obtaining scholarships and they do not screen applicants. After purchasing the lists, it is the students' responsibility to research and contact each organization with a possible funding source. Although many ads offer "money back guarantees" or $200 savings bonds to students who don't receive any scholarship sources or funds, students who are unsuccessful, or not satisfied, may find that refunds are difficult, if not impossible, to obtain. The company may require students to prove, through documentation, that they were denied a scholarship by _every_ source on the list. Many of the scholarship sources that these companies provide for a fee, are available at no cost from high school guidance offices, in the reference sections of libraries or from the financial aid office of the college the student is planning to attend. For a reliability report on a scholarship company, consumers should call the Better Business Bureau where the firm is located. For a copy of the BBB's booklet, "Tips on College Financial Aid," send a self-addressed, business-sized envelope and $2 for postage and handling to Council of Better Business Bureaus, Dept. 023, Washington, DC 20042-0023. _________________________________________________________________ _Copyright 1994 Council of Better Business Bureaus, Inc. May be reprinted in whole or part with attribution._ Council of Better Business Bureaus Public Affairs Department 4200 Wilson Blvd. Arlington, VA 22203 Tel: (703) 276-0100 Fax: (703) 525-8277 The name Better Business Bureau is a registered servicemark of the Council of Better Business Bureaus, Inc. ---------- --SPECIAL REPORT-- - Financial Aid Expert Blows the Whistle On Scholarship Searches - -The Shocking Truth About Scholarships is Finally Revealed- Myth #1-You can finance a college education using private source scholarships. Many families believe there are enough scholarships to completely pay for their child's education. FACT: Unfortunately, most families feel their student is entitled to FREE MONEY. There are some scholarships available but there are simply not enough to go around. Most scholarships awarded average $100 to $1,000 each. Thus, it would take many different scholarships to finance an education costing between $40,000 to $120,000. Myth #2.-The major portion of financial aid money comes from FREE MONEY available from private source scholarships Many families think much of the money for college comes from private sources such as foundations, organizations and religious groups. FACT: Less than 1% of the $35 to 40 billion dollars available for college comes from private sources. Almost all of the money for college is in the form of financial aid awarded by colleges through the need-based financial aid process. The need-based process simply compares the cost of college to a families ability to pay based upon a standardized process. Myth #3- Millions of Dollars of scholarships are available which go unclaimed every year This myth was started by scholarship search companies who advertised there are millions of dollars in unclaimed private grants and scholarships available if you simply knew where to look. Many organizations claim to list well over 100,000 scholarships in their database. FACT: The large numbers of scholarships you read or hear about generally refer to an estimated total of scholarships available only from certain colleges, to the employees and families of specific companies or members of a specific union or other organizations. You will not qualify for these scholarships unless you are 1) planning on attending the college that is offering the scholarship, or 2) your parents work for the company or 3) your family belongs to a certain organization. In reality, it is estimated there are only 5,000 sources of aid that are not related to a government program or restricted to a particular college or company. Myth #4-Many Scholarship Companies GUARANTEE you will receive scholarships Many Scholarship Companies GUARANTEE you will receive scholarships regardless of academic qualifications, scholastic credentials or your family's financial status. This guarantee is made without knowing anything about your family and ranges from "money back guarantees" to US Savings Bonds. FACT: Scholarship search companies do not assist student in obtaining scholarships. They simply compile a listing of scholarships you are potentially eligible to receive. Students must apply to these organizations to determine if they will receive a scholarship. There is a big difference in being potentially eligible for a scholarhip and actually receiving one. Scholarship companies have no control over whether you will actually receive any money. Only the organizations actually granting the funds can guarantee approval. Many families find that collecting on these guarantees is difficult, if not impossible to obtain. Myth #5-It is necessary to pay a service to obtain a listing of scholarships. Many families feel they must pay a scholarship service to obtain a listing of potential scholarship sources. FACT: Many of the scholarship sources can be identified with a little research for FREE at your local high school guidance office, in the reference section of libraries or from the financial aid office the student is planning on attending. It just takes a little hard work and ingenuity. Myth #6-Receiving a scholarship from private sources will reduce the amount of money a family is required to pay for college. Many families feel that if they are awarded scholarships, it will reduce their out-of-pocket costs FACT: If a family is applying for need-based aid, (which they should always do) all money received from private sources must be reported to the college and is considered "financial support" and will be considered by the college as available to help pay for college just as if it were provided by the family. This will usually cause a college to reduce the financial aid they will award. RESULT: Less need-based financial aid. MONEY IS AVAILABLE THROUGH THE NEED-BASED FINANCIAL AID PROCESS. Get the money you need for college. Don't let the maze of forms, deadlines, and strategies discourage you from receiving your fair share of financial aid. Get help from the professionals. College Aid Planning Strategies can help you get the money you need for your child's education. Don't make a mistake that costs your family thousands of dollars!! Call today for an appointment (713) 726-0888. Check out our web page at http://www.hic.net/collgaid/caps.html This report may be redistributed as long as the entire article, the copy at the end of the article, and this message remain intact and unaltered. Copyright 1995 by College Aid Planning Strategies. All rights reserved. ---------- End of Document