Q I will be a freshman attending college this year and am looking for financial aid. I keep getting letters from companies saying that if I pay them upfront, they promise to find me money for college, or I get my money back. Are these letters and companies legitimate?
A With the cost of college outpacing inflation and crimping family budgets, students and their families are eager to find scholarships and other awards to help pay for higher education.
Better Business Bureau advises students and their parents to be wary of websites, seminars or other schemes that promise to find scholarships, grants or financial aid packages for an upfront fee.
Some companies promise a money-back guarantee, but set so many conditions that it can be almost impossible to get a refund. Others tell students they have been selected as finalists for a grant or scholarship but must pay a fee to be eligible for the award.
In some cases, for a fee, a company will agree to handle the paperwork that makes a student eligible for financial aid. However, the standard application process for financial aid is most often the Free Application for Federal Student Aid (www.fafsa.ed.gov), which students and their parents can complete themselves at no cost.
College financial aid offices require the FASFA to assess a student's eligibility for need-based aid. Most universities are willing to advise prospective students on how to apply for aid. They will also answer questions about financial aid packages offered when a student is accepted for admission.
BBB offers these tips for students looking for financial aid:
• Do not be pressured. Do not be rushed into paying for help at a seminar. Be cautious if a representative urges you to "pay now" to avoid losing the opportunity.
• Ask questions. Ask about fees associated with the service or process and if the company provides refunds. If a company is reluctant to answer any questions you have about the service or the process, walk away.
• Turn to a school counselor. Guidance counselors and college financial aid offices are a great resource and can help students search for information on scholarships.
• Get details in writing. Everything that was discussed, promised or included in the package should be clearly written out and explained.
• Research the company. Check the company's BBB Business Review at bbb.org.
Get answers to your questions each Friday from Jim Winsett, president and CEO of the Better Business Bureau Inc., which serves Southeast Tennessee and Northwest Georgia. Submit questions to his attention by writing to Business Editor Dave Flessner, Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN, 37401-1447, or by emailing him at dflessner@ timesfree press.com.