By Devin Simmons
Arizona Daily Wildcat
September 2, 1997

FTC tries to inform students of private scholarship scams

The Federal Trade Commission is on the front-lines of a battle to inform students about scholarship scams. These scams come in many different shapes and sizes, but the goal is the same - to rip off students.

These scholarship scams are being traced back to private companies. One such example of this is a company called, Progressive Media, Inc., based in Seattle. According to a FTC report, the company was charged with misleading students by selling them employment and financial aid directories guaranteeing students jobs with free room, board, transportation and free financial aid from a "$6 billion pool of unclaimed aid."

The company's money-back guarantee is also alleged to be false.

Companies approach these scams in many different ways. Methods include setting up phony refund policies, obtaining credit card and bank account numbers and then debiting consumer accounts and lying about a foundation's validity.

The FTC has created a campaign to stop these scams. Project $cholar$cam is a task force designed to inform consumers, target alleged fraudulent scholarship search services and is responsible for the latest crackdown on Progressive Media.

In a court order, passed yesterday, agencies are now required to obtain written authorization before debiting consumer accounts, and are required to disclose all terms of the refund policy in a written agreement. Also, the court order enables the FTC to monitor agencies more intensely by requiring them to allow FTC access to all records.

According to Phyllis Bannister, director of Student Financial Aid, there is no apparent problem on the University of Arizona campus with scholarship scams.

Bannister encourages all students to do their own scholarship search. She cited the UA financial aid homepage which offers more than 5,000 scholarship opportunities for free.

"If you can do it yourself, do it, make it as easy as possible." she said, "Whenever parents call asking if they should pay for scholarship services we tell them 'no.' You shouldn't have to pay for free money."

"It's too bad that people are toying with students' education," said Mike Griffus, a Spanish senior.

Kristina Rivera, a sociology senior, said, "These companies are taking advantage of students who don't have any money."

Many students feel as if they are easy targets, due to the fact they need money for college.

"Everybody knows students want scholarship money," said Anna Guttuso, a political science senior. "It bothers me, but we're prime targets."

However, most students have learned what is safe when searching for a scholarship.

"Scholarships should stay free. When I have to pay for it, I don't go for that," said Michael Benveniste, a communication junior.

Tim Wagner, a math sophomore said, "If you have to pay for something to get a scholarship, then no way."

To check out the UA's financial aid homepage, log onto : http:\\w3.arizona.edu\~finaid\scholfin.html.

The FTC has sent out a brochure outlining six things to watch for when dealing with scholarship agencies.

• Watch out for scholarships that are guaranteed. Legitimate companies will never guarantee or promise scholarships or grants. Students should get refund policies in writing before paying.
• Check schools or libraries for free scholarship lists, first, instead of paying for one.
• Never give out credit card or bank account numbers without information in writing first.
• Students should apply for scholarships or grants themselves. Do not allow agencies to do it.
• Don't pay anything. Free money shouldn't cost a thing.
• Check out scholarship foundations before doing anything. Make sure they are legitimate.