UCLA students fall prey to scholarship scams

By Marcelle Richards
Daily Bruin Reporter

They lure you in with promises of free money, lists of
scholarship resources and guaranteed winnings, but in the end you
pay the price for failing to sniff out the scam.

Every year an estimated 350,000 students fall victim to the
allure of too-good-to-be true offers made by fraudulent scholarship
agencies that total $5 million in losses annually, according to the
National Association of Student Financial Aid Administrators.

“You need to have the most specific information, you need
to know you’re taking a risk if you can’t get a hold of
someone,” said Carol McKay, a 1999 UCLA alumna and assistant
director of communications for the National Fraud Information
Center. “I think it’s funny a lot of them offer a
guarantee.”

Upfront fees, requests to disclose credit card or bank account
information, and guaranteed scholarship awards are signs that a
scholarship may be illegitimate.

Checking the source through the Better Business Bureau is the
best way to screen questionable scholarships, according to
McKay.

“If it sounds too good to be true, it probably is,”
she said.

Many times, students hire someone to conduct the scholarship
search for them, finding information that can be obtained from
books, Web sites and campus scholarship facilities.

“There are lots of enterprising people out here who charge
a fee for something you could do yourself, but people pay it
because they don’t have the time,” said Gail Ishino,
assistant director of counseling for UCLA’s financial aid
office. “It’s very easy to fall victim to
scams.”

The problem seems to be tied to the climbing costs of college
tuition, which has risen 234 percent from 1980 to 1994, according
to a report released by the General Accounting Office. During that
time, average student loan amounts also rose 467 percent.

According to the Federal Trade Commission, the costs of college
are mobilizing students to seek more aid, often looking for an easy
way out through tempting, but often fraudulent, scholarship
offers.

Scam artists are often highly in tune with such trends and wait
for the chance to capitalize on a situation when opportunity
knocks, according to the FTC.

McKay had her own run-in with a scam that charged her $60 for a
list of nonexistent or void scholarships.

“It was a very long list and most of the deadlines had
past, most things I didn’t even qualify for such as
“˜Did I have a grandfather on a submarine?'” she
said. “I remember sending out letters but I didn’t hear
from any of them and many of my letters were returned. I think
it’s a pretty common scam.”

Confining searches to on-campus centers and sponsors tends to
reduce the risk, according to Ishino.

The Scholarship Resource Center, which has scholarships
primarily from outside agencies, provides students with a large
collection of books as well as a staff that works to help guide
students through the process.

The hunt for scholarships is most prevalent between October and
April, since most deadlines fall within this time frame, said
Beverly Rubin, programmer and analyst for the center.

“Our goal is to guide undergraduates through the funding
process,” Rubin said. “If we ever find anything that
looks iffy, it’s gone. We’re very proactive on that
end.”

Although UCLA has not had any significant problems with
scholarships through the center, Rubin said there have been a few
incidents over the past five years that were reported by students.
Nonetheless, she cautions students to look out for scam signs when
searching outside resources.

“For the most part, we try to screen our scholarships
pretty carefully,” she said. “We’re trying to be
as organized as possible.”

SRC specializes in merit-based scholarships, which differ from
the need-based awards given through the financial aid office.

Need-based awards come from donations made to the school, and
students may apply by checking off a list of scholarships they wish
to apply for on their freshmen application.

Other options for students on campus are departmental awards and
the College Library, which has an extensive collection of
scholarship resources in its collection.

Sponsors often make contributions specific to a department,
which also enables students to better narrow their search,
according to Ishino.

To filter through the broad range of awards, Amirra Elgamiel, a
fourth-year international economics student, said she checks the
source and inquires about application fees of her scholarships.

“I’ve not had a problem finding scholarships,”
Elgamiel said. “The career center and the academic
departments do a pretty good job advertising
scholarships.”

For more information on avoiding scholarship scams, go to
www.finaid.org or www.salliemae.com. To report a
fraudulent scholarship call the Federal Trade Commission at
1-877-FTC-HELP.

SCAM-PROOF YOUR FINANCIAL AID

Six red flag phrases to look out for in scholarship
offers.

"The scholarship is guaranteed or your money
back." "You can’t get this information anywhere
else." "May I have your account number to hold
this scholarship?" "We’ll do all the
work." "The scholarship will cost you some
money." "You’re a finalist," in a contest you
never entered. SOURCE: Federal Trade Commission Original
by ADAM BROWN/Daily Bruin Web Adaptation by REX LORENZO