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Families should be wary of suspicious student financial aid offers, warns Knowles

Published February 10. 2010 05:00PM

Rep. Jerry Knowles (R-Berks/Schuylkill), along with the Pennsylvania Higher Education Assistance Agency (PHEAA), is alerting families to be cautious when looking at offers of assistance for securing funds for their college-bound students.

Several individuals and organizations may charge a fee in exchange for assistance in finding scholarship money or in completing the Free Application for Federal Student Aid (FAFSA). However, there are many free resources available to provide families with all the assistance they need.

The Federal Trade Commission warns that unscrupulous companies "guarantee" or "promise" scholarships for students. Such claims should be a warning sign. Families can avoid scholarship scams by looking for those types of misleading sales pitches:

* For a fee, the company or organization will provide a list of scholarship opportunities. If a student does not receive a reward and seeks a refund, they soon find that conditions have been attached to the agreement to make it impossible to get a refund. A request for a refund is denied and the student is out the money.

* Companies may claim that their information is simply not available anywhere else. However, much of the information they use can be accessed for free. PHEAA's "Education" offers a free scholarship database.

Some organizations persuade students and their families to send them money to "hold" an award, claiming that students are finalists in a scholarship contest. However, scholarships are only awarded based on a student's application.

Organizations that have official sounding names, fancy scals, and a Washington D.C. mailing address can give families the impression the organization is affiliated with or endorsed by the federal government, when, in fact, no association exists.

* Free scholarships or "financial planning" seminars can frequently end with a sales pitch to "act now or lose out on this opportunity" for a fee. Any legitimate organization or entity will not use pressure or scare tactics.

Students interested in applying for scholarships and other financial aid should contact their school counselor for assistance in identifying local awards. A variety of scholarships, including merit, scholastic and special talent awards are available to students.

Families are encouraged to report suspected scams by contacting the Federal Trade Commission at or calling 1 (877) ETC-HELP.

For more information on student financial aid, visit Knowles' website at

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