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The GW Hatchet


The GW Hatchet

Serving the GW Community since 1904

The GW Hatchet

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Scholarship fraud bill introduced in House

(U-WIRE) CARBONDALE, Ill. – A bill being presented to Congress aims to prevent incoming college students from losing millions of dollars to fraudulent scholarship scams.

The “College Scholarship Fraud Prevention Act of 1999” adds 10 years to prison sentences of people convicted of fraud if criminal activity involves education. The bill requires the Federal Trade Commission and Department of Education to maintain a Web site that contains information about legitimate college scholarships.

Sens. Spencer Abraham (R-Mich.) and Russell D. Feingold (D-Wis.) sponsored the legislation, which went before the Senate Judiciary Committee for a hearing a week ago.

Monica Brahler, public relations coordinator for the Financial Aid Office at Southern Illinois University at Carbondale, said students should be leery of unsolicited scholarship services that provide information through the mail or e-mail.

“A good rule of thumb is that if it sounds too good to be true, it probably is,” she said.

Brahler said the Better Business Bureau and the Attorney General’s office are good resources for checking the validity of a scholarship service’s claim. She said if students are curious about a company or service, they should not hesitate to look into the business’s past.

“If a business is not willing to give you references or work with you, I think red flags should be going up,” she said.

The first legal action against scholarship scams began in the fall of 1996 when the FTC launched project “Scholar Scam” and shut down five fraudulent companies. Mark Kantrowitz, publisher of the Web site, said scholarship scams have always existed.

“If you have to pay money to get money, it is probably a scam,” Kantrowitz said. “A scholarship is about gaining money – not giving money.”

The eight organizations that have since been shut down by the FTC defrauded more than 175,000 consumers of $22 million. Kantrowitz estimates total consumer losses from scholarship scams to number in the hundreds of millions of dollars.

“By the time I could assemble proof that an organization is fraudulent, the organization has already been in existence for well over a year,” Kantrowitz said. “By the time fraud is proven, they have changed their name and address.”

Along with a crackdown on fraud, the FTC launched programs to educate students about what types of scams are fraudulent.

“Educating consumers on how to recognize these types of scams will do more to thwart these scams than any law enforcement,” Kantrowitz said.

A type of scholarship fraud, known as guaranteed scholarship services, guarantees students will earn a designated amount of money but require students to pay for the services. Kantrowitz said the claims these services make are unreasonable.

Kantrowitz said there are several legitimate services on the Internet from which students can benefit.

Terri Williams, academic scholarship coordinator for New Student Admissions at SIUC, said students can find enough ways to earn scholarships at no cost.

“There are enough scholarship services out there that students can take advantage of without paying someone to do that for them,” she said.

-Rhonda Sciarra, Daily Egyptian (Southern Illinois U.)

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