Beware bogus aid - college scholarship agencies

Black Enterprise, Nov, 1992 by Michelle Collison

Several state attorneys general and Better Business

Bureaus are investigating scholarship agencies that promise students scholarships ranging from $1,500 to $5,000 for a fee. They say students should be wary of such claims, because many are paying fees and ending up with nothing.

Each year, scholarship agencies promise to find anxious students and their parents thousands of dollars in scholarships for fees ranging from $45 to $200. Some telemarketing firms guarantee students up to $5,000 in scholarships if they call a 900-number or charge the fee for listings to a credit card,

College officials point out that students and their parents don't have to pay private companies for scholarship information. It is available free at counseling offices in high schools and colleges. In addition, many scholarships are not awarded because they are so restrictive.

"Unless you're a Lithuanian brown-eyed farmer from Albania, you can't get many of these scholarships," says Arthur Jackson, associate dean of student affairs at Eastern Connecticut State University.

Owners of scholarship search services argue that they are providing a valuable service. "There is a desperate need for money, and thousands of students are using scholarship services because they can't get help from guidance counselors," says Howard Maroz, president of Northridge, Calif,-based Money For College Inc.

The Wisconsin attorney general sued Money For College, accusing it of falsely telling students it had information about scholarships only the company could provide.

It is difficult to determine how much money is being made by scholarship search firms. But when the U.S. Postal Inspection Service obtained a restraining order two years ago against San Diego-based National Scholastic Resources Administration Inc., 10 days worth of the company's confiscated mail contained $2.3 million in checks.

Barbara Maze, an account executive for CH Health Technologies Inc., says she was burned for $200 by a Missouri company called Scholarships For You. After being guaranteed a $1,700 scholarship for her daughter, Maze says she received a list of 10 sources. Six of the deadlines had passed, two of the sources offered loans, and her daughter was ineligible for the other two awards. "They're just preying on people who have kids in college and need money," says Maze.