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Think twice about paying for financial aid services
AUSTIN -- According to The College Board, $94 billion was made available to help college students cover education costs during the 2009-10 school year.
To assist the millions of students and parents who depend on annual grants and scholarships, many companies now sell information about financial aid availability and offer application services. The Better Business Bureau (BBB) warns that in 2010 nearly 400 complaints were received nationwide from parents and students who were dissatisfied with services provided by scholarship and financial aid companies.
Several complaints explain that students received a direct mail piece from a financial aid company announcing the student was eligible for a scholarship and needed to set up an interview to receive it. Complaints further allege that students felt they were misled and were scheduled for a financial aid group seminar instead of an interview. Students and parents report that after attending the seminar and paying more than $1,000 in fees to the company, the services received were nothing more than assistance with basic paperwork.
The BBB has also received numerous complaints about a free trial offer for resources that are advertised to help students simplify the process of scholarship applications. However, many students claim they were charged as much as $69 for the resources despite the free trial offer.
The bureau reminds students and parents that free information on financial aid is available at www.fafsa.gov.
Additionally, the BBB advises that consumers look for the following red flags from scholarship and financial aid companies:
•“The scholarship is guaranteed or your money back.” In reality, no one can guarantee they will get you a grant or scholarship because the decision is out of the company’s hands. Refund guarantees also often contain complicated terms and conditions that make it difficult for consumers to get their money back.
•“You cannot get this information anywhere else.” Scholarship information is widely available in books, from libraries and financial aid offices, and on the Internet, if you are willing to search for it.
•“We will do all the work.” Only parents and students can determine and provide the financial information needed to complete the forms.
•“You have been selected by a national foundation to receive a scholarship.” If you have not entered a competition sponsored by the foundation, this claim is highly unlikely.
•“Your credit card or bank account number is required to hold this scholarship.” Legitimate scholarship offers never require this information or payment of any kind.
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