Where there is complication or confusion you often find a scam.
Such is the case as parents panic in their search for free money for their college-bound children. Many are being victimized by scholarship and financial aid scams.
People are paying hundreds of dollars to companies that make false claims that they can guarantee a child will win a scholarship, or they promise to help with applying for federal financial aid. But in many cases, what people get is useless information while spending money they could have used to help pay for the child's college education.
Scholarship scams usually rev up about this time of year when parents and students are filling out the Free Application for Federal Student Aid (FAFSA).
Typically, companies making these false promises charge fees ranging from $50 to $1,500. You might get a notice in the mail or in your e-mail box inviting you to a hotel meeting room to learn all the secrets of winning scholarships or applying for financial aid.
And what do you get for your money? The same information you can get for free on such Web sites as www.finaid
.org, ww.fastweb.monster.com or www.nasfaa.org, run by the National Association of Student Financial Aid Administrators (NASFAA).
On NASFAA's site, click on the link for "Parents & Students" and search for the "Financial Aid Consultants and Scholarship Search Services Fact Sheet."
NASFAA's College Goal Sunday is a free, credible program that helps students and parents complete the FAFSA form. Volunteers set up one-day workshops to help families fill out the FAFSA form.
A report from the Federal Trade Commission and the departments of Justice and Education found that scholarship fraud has shifted from promoting guaranteed-scholarship search services to offering financial aid consulting. For example, companies promise to show families little-known (but legal) ways to shift assets to improve their child's chances of getting more need-based aid.
Here are six signs that you are about to be a scholarship sucker, according to the FTC:
¢ If the pitch says your child is guaranteed a scholarship or you'll get your money back. Of course there are always conditions that make that money-back promise useless.
¢ If you believe a claim that they'll do all the work.
¢ If you fall for a claim that "you can't get this information anywhere else." Hello, there's this thing called the Internet and because of it, not much is a secret anymore. There are plenty of books that cost less than $50 that will help you and your child search for free money.
¢ You are being pressured to give your credit card or bank account number to "hold" a scholarship for your child.
¢ You're contemplating paying a fee to apply for a scholarship. That's no different than when you're told to send money to claim cash supposedly won in a lottery. Free money shouldn't cost you anything.
¢ You're excited about an offer that comes in the mail that says your child has received a scholarship for which he or she never applied. The catch: You have to pay a fee to apply for it.
Scholarship or financial aid scams aren't likely to deplete your life savings, but there's no sense in just throwing away money for something you can get for free.
Don't let your desperation for dollars to send your child to college cloud your common sense.