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Daily Aid 23: Avoiding scholarship scams

October 13th, 2008

Daily Aid 23: Avoiding scholarship scams

Student Financial Aid News

A November ballot referendum to repeal Massachusetts’ income tax has many educators scared. Though supporters of the referendum argue it would make the government more efficient and effective, detractors argue that it would put valuable public services at risk. Especially concerned are public college and university administrators, who warn that, for the state’s higher education system, the consequences of an income tax repeal would be grim.

Commentary

This speaks to a bigger question - how do you make government more efficient? By efficient, of course, that means prioritizing expenses and eliminating those things that are non-essential. If there’s great fear in the education community about higher education bearing the brunt of an elimination of income tax, then that speaks to education being less than top priority for the politicians.

Higher education can approach this in several ways, but the best long term strategy, in my opinion only, is for higher education to do some serious marketing, pushing the benefits of education to the citizenry directly, showing that education not only has direct long term economic benefits (improved wages and incomes), but also lots of intangible benefits as well (culture).

In an environment where money is tight and every dollar counts, both for taxpayers and governments, you have to advocate for the things that are most important to you. In the state of Massachusetts, how many students, faculty, and staff have written to their legislators about this issue in the last 30 days? Legislators, as cynical as it sounds, care about two basic things - keeping their jobs and raising money for elections to keep their jobs. Citizens may lack the dollars needed to lobby legislators as special interests do, but citizens hold the final seal of approval for the voting process. If you find any proposal objectionable, recruit your fellow citizens and step up to advocate your position.

If you’re a Massachusetts student and you believe the income tax vote will adversely impact your financial aid, causing you to borrow more in student loans, then you need to step up and advocate against it.

Disclaimer: The Student Loan Network does not endorse any political position, party, or candidate. Any political opinions are mine alone.

Scholarship Special Update

As the economy gets tighter and more families are forced to make difficult choices, I would expect the number of scholarship and financial aid scams out there to increase, from fake scholarships to identity theft to paid consultants promising all kinds of help for all kinds of fees.

Let’s take a quick look, then, at some basic things to be aware of.

Scholarship scams. Here’s the golden rule of scholarships: money flows to the student, never the other way around. Any scholarship which requires even a penny out of your pocket is almost certainly a scam. Scholarship scams also exist in the form of identity theft - taking valuable information such as date of birth and social security numbers and selling them outright to identity theft groups around the world.

If it sounds too good to be true, it probably is.

For example, a scholarship site that has no visible contact information but makes all kinds of wild promises is probably a scam.

Contrast that with our $10,000 scholarship. Yes, it’s a super-easy application, and yes, it’s a lot of money, but it should be fairly obvious that we’re going to send you an ad about our student loan services, since the scholarship is sponsored by the Student Loan Network.

Another example is our completely free Scholarship Search Secrets eBook. Why do we give this away for free? It’s a trade, of sorts. We’re giving away information in the hopes that if you need student loan services down the road, you’ll remember us and choose to do business with us. Since it’s electronic, it costs nearly nothing to give away, and we hope it’s helpful to you.

Paid help. Most paid help for scholarships and financial aid isn’t helpful, or at least isn’t worth the money you pay. Any scholarship search service that guarantees a scholarship is almost certainly not legitimate, since no one can guarantee you’ll win a scholarship. Most paid scholarship search services have the same information that the biggest free scholarship search service has - Google. Most financial aid consultants who are offering FAFSA help aren’t adding a whole lot to your search for aid, especially with events like College Goal Sunday, which is free.

If you remember nothing else from this, remember the golden rule of scholarships, repeated over and over again:

Money flows to the student, never the other way around.

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