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Although there are a number of useful Web sites, helpful services, and legitimate tools that can help you and your parents find information about financial aid and scholarship opportunities, unfortunately scholarship scams remain a threat. It is estimated that more then 350,000 students and families lose a stag-gering $5 million to scholarship fraud every year.

However, you and your parents, along with counselors, finan-cial aid administrators, and others in the education community have resources to bring those who perpetrate scholarship scams to the attention of state and federal authorities, who in turn now have tougher measures of their own to go after companies who engage in scholarship fraud.

Recent Legislation
The College Scholarship Fraud Prevention Act of 2000 makes it easier for individuals and institutions to report scholarship fraud. The act gives the Department of Education, along with The Federal Trade Commission (FTC) and the Depart-ment of Justice the ability to change federal sentencing guide-lines to provide tougher penalties for those convicted of perpetrating scholarship fraud.

The act also established a Web site that allows individuals to report instances of alleged scholarship scams. At you can view a list of companies and individuals who have been convicted of scholarship fraud in federal court, file an electronic complaint form to report fraud to the Justice Department and visit the message board that posts reports of scams. The site also contains a number of consumer awareness documents that can be printed, posted and distributed to student, parents and counseling offices, or reposted on another Web site.

This site also contains links to U.S. Department of Education online publications, Student Guide and Funding Your Education. Both of these publication outline the procedures and eligibility requirements for obtaining federal, state, and institutional student financial aid.

Do Your Part
If you have been victimized by scholarship fraud, don’t let shame hold you back from report-ing the scam. You are not the only one who has been victimized; the FTC reported that over a two-year period eight deceptive scholarship providers had reaped in $22 million from unsuspecting students and their families. Especially vulnerable are “first-generation” students heading for college, who do not have their parents’ experiences with college financial aid to fall back on. Overburdened counselors, with greatly increased caseloads due to the swelling number of students going to college, sometimes do not have the time to detect frauds. The Internet also unknowingly allows companies that prey on students to sell their services by hiding such fraudulent providers in relative obscurity among the much larger community of legitimate service providers.

If you suspect that a scholarship provider is phony, visit or call toll-free 1-877-FTC-HELP (1-877-382-4357), to file a complaint. Your efforts could not only benefit yourself, but also potentially save other students from being victims of scholarship scams.

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