If there's one sure way for parents to lose precious dollars needed for college, it's this: Biting on phony scholarship pitches.
This is the time of year when scam artists ramp up efforts to target families of high school seniors with scholarship awards, low-cost loans and other tuition incentives that offer more hype than hope.
Consumer complaints about scholarships and financial aid services more than doubled to 972 in 2009 from 467 in 2008, according to the latest data from the national Council of Better Business Bureaus.
Here are three variations of tuition scams, according to the website FinAid.org:
Scholarships for profit: This type of fake program draws thousands of applications for scholarships and charges fees of $5 to $35 for processing. The promoters actually pay out a scholarship or two and take a hefty profit on the rest of the money. Your odds of winning the lottery are better.
Eye on the prize: In this case, you're notified that you've won a scholarship worth thousands of dollars, but you're required to pay a disbursement fee or the taxes before the prize is released.
The match game: Be wary of scholarship matching services that guarantee you'll win money or they'll return your funds.
Not all the financial aid sales pitches are scams. Some simply disguise the services being offered, such as invitations to "free seminars" that are really nothing more than an attempt to entice you into buying products or services.
Though these "free" offers may be tempting, my advice is to run the paper through the shredder. Better to save your money and spend it on college tuition than handing it over to some sketchy service.