Gerri Willis Commentary:
Top Tips by Gerri Willis Column archive

Watch out for fake financial aid

Complaints about college financial aid scams are growing. Here's how to make sure you don't get burned.

By Gerri Willis, CNN

NEW YORK (CNNMoney.com) -- Parents beware - financial aid scams are growing. Complaints are up 60 percent last year, according to the Better Business Bureau. Here's what you need to watch out for.

1: Beware the seminar hoax

Parents from New York to California have contacted the BBB saying they paid a Utah-based company as much as $1,000 for help finding financial aid - and never heard from the firm again.

College cost finder
Enter school name
(or part of name)
OR
Choose a state

Parents say their college-bound child received an email from College Money Matters stating they'd "been accepted" to attend a free financial aid seminar. The seminar was essentially a sales pitch and, for a fee, the company would submit the student's Free Application for Federal Student Aid (FAFSA) form and find college scholarships and grants for the student.

As you can imagine, not only did they not receive the promised help for finding grants and scholarships, but many discovered that their child's FAFSA form was never even filed.

2: "Free!!" grant money

The BBB has received a number of complaints from consumers who say they've received offers for "Free Grant Money" as financial aid for debt relief or to help pay off college bills.

When victims received the grant in the form of a check, they were instructed to deposit the check and then wire a smaller amount of money back to cover processing fees. It took weeks to discover the checks were fake because they looked so professional.

3: Red flags

Here are some phrases that should signal a hoax:

"The scholarship is guaranteed or your money back." Scholarships are never guaranteed.

"We will do all the work." To make sure you get the best financial aid deal, you'll need to put some effort in. There's just no way around that.

"You have been selected by a national foundation to receive a scholarship." If you have not entered a competition sponsored by the foundation, this claim is highly unlikely.

"The scholarship will cost some money." Legitimate scholarship offers never require payment of any kind.

You should also be wary if there is no phone number. Ignore offers that have time pressure and remember, if you've legitimately won a scholarship, you'll be notified by mail - not over the phone.

4: Where to get help

You can search for different scholarship options at Collegeboard.com. You'll be able to get a list of the requirements, the deadline and where the scholarship can be applied. You can also check out the list of scholarships and databases at finaid.orgTop of page

Gerri's Mailbox: Got questions about your money? We want to hear them! Send e-mails to toptips@cnn.com or click here - each week, we'll answer questions on CNN, Headline News and CNNMoney.com.

Most lucrative college degrees

Going back to school and saving money

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.