By Richard Kitterman
Special to the Daily Herald
BBB received hundreds of complaints about financial aid companies last year
According to The College Board, a nonprofit organization that works to assist students with financial aid and scholarships, $94 billion was made available to help college students cover education costs during the 2009-10 school year.
BBB received nearly 400 complaints nationwide during 2010 from parents and students who were dissatisfied with services provided by scholarship and financial aid companies.
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.
Some 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.
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.
BBB reminds students and parents that free information on financial aid is available at www.fafsa.gov.
Additionally, BBB advises that consumers be cautious, look for the following red flags and to check with BBB before sending money to 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.
"Start With Trust." Go to www.bbb.org to check on a company's reputation and record for customer satisfaction. Look for the BBB Seal and click to confirm that it is valid.
For consumer information, business reviews, reports on charities, to schedule a guest speaker or to file a complaint, go to www.centraltx.bbb.org or call (254) 699-0694.
Richard Kitterman is executive director of the BBB for Central and South Central Texas.