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By Amanda Riddle
Arizona Daily Wildcat
September 17, 1996
The Federal Trade Commission recently received preliminary injunctions against three of the five scholarship search companies it is investigating for fraud, an attorney at the FTC said.Late last month, the FTC filed charges in federal district court against five companies that the government claims stole nearly $10 million from college-bound students and their families.
The agency then obtained temporary restraining orders against all five companies. A preliminary injunction is the next step after the temporary restraining order, which lasts 10 days. Hearings will be held this week and attorneys on the case are starting depositions, said Dana Lesemann, an attorney working on the scholarship case for the FTC.
Preliminary injunctions were filed against: Career Assistance Planning Inc., Atlanta, Ga.; Christopher Ebere Nwaigwe, who has various addresses in Washington, D.C. and Maryland; and Student Assistance Services Inc. of Fort Lauderdale, Fla.
Student Aid Incorporated of New York, N.Y.; and College Assistance Services Inc. of Sunrise, Fla. received extensions.
Lesemann warned about using scholarship search services.
"Get all your information in writing. No company can promise to get you a scholarship or grant," Lesemann said.
Lesemann advised students not to give credit card information over the phone unless they are ready to order. "A lot of companies want to pressure you over the phone," she said.
If a student would like to file a complaint against a company, Lesemann suggested calling the National Fraud Information Center. The center has a computerized database, and the FTC receives complaints over the fax the day after they are filed.
For more information or an update on the scholarship scams case, access the FTC home page at http://www.ftc.gov. This home page hyperlinks to the Financial Aid Information Page at http://www.finaid.org. The Web site is maintained by Mark Kantrowitz and has information on scholarship scams, in addition to posting available scholarships.
The UA Office of Student Financial Aid recommends that instead of investing money in a search, students should invest their own time at a public library.
"It's true that some scholarship funds go unclaimed," said Phyllis Bolt Bannister, director of student financial aid at the University of Arizona. But students are the best judges of what scholarships they can apply for, she said.
Bannister said students can also access Fund Finder software in Old Main to look up available scholarships. Fund Finder is a nationally-constructed database from the College Board, a private, nonprofit organization. The UA is a member of the College Board and purchases updates for the program, which it provides for free to students and prospective students.
A student transferring from Pima Community College was using the database on Friday to search for more money for college, and found 19 scholarships for which she could apply.
"I couldn't get anything (scholarships or grants) through the university. I was only offered loans," Shannon Gertsen said.
"I'm also going to go to the library," she said.
Two scholarship services that have advertised in the Arizona Daily Wildcat during the past week, Student Financial Services and Cash For College Aim, require fees for their services.
Student Financial Services charges a $69.95 fee. In return, students receive a directory of private scholarships and grants, a financial aid report, a financial aid Quick-Start cassette and a copy of the service's quarterly newsletter.
"Student Financial Services does not act as a matching service. It provides students with everything out there. It guarantees if they don't receive at least $300 after using the program for 90 days, they can return the fee for a refund," said David Okamoto, director of Media for Progressive Media Inc.
Student Financial Services is a subdivision of Media for Progressive Media.
Student Financial Services has about a 5 to 6 percent rate of return on its programs, Okamoto said.
Cash For College Aim charges a $96 processing fee. Students fill out an application, and the company tells students if they are eligible for any awards. The company also has a return policy.
Consumer information on both companies could not be obtained from the FTC or the Attorney General's Office because they cannot give out information on companies that do not have court charges filed against them.
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