Federal Agencies Release Annual Report to Congress on Scholarship Fraud

For Your Information

The Federal Trade Commission, the Department of Justice, and the Department of Education have issued their annual report to Congress describing the agencies’ continued efforts to combat scholarship and financial aid fraud, as required by the College Scholarship Fraud Prevention Act of 2000.

Each year, millions of students seek help in financing their college education, and some fall prey to scholarship and financial aid scams that “guarantee” money for college in exchange for a fee.  This report provides an update of the agencies’ activities to prevent and prosecute financial aid fraud, including the FTC’s monitoring of the financial aid industry and enforcement actions, and its consumer education campaign to help students, parents, educators, and financial aid administrators identify and avoid financial aid scams.  An analysis of complaints in the FTC’s Consumer Sentinel database shows that:

  • Financial-aid related complaints as a percentage of total complaints received by the FTC have generally declined since 1996, and have remained flat over the last six years.
  • The focus of complaints about financial aid fraud has shifted over the years.  In the late 1990s and early 2000s, complaints centered on bogus search services for scholarship and grant opportunities.  In recent years, there has been an increase in complaints about suspect financial aid consulting and planning services that purport to maximize student eligibility.  Now, complaints about bogus scholarship and grant opportunities appear to be on the rise again.

The Commission vote authorizing staff to issue the report was 5-0.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them.  To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357).  The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad.  The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook and follow us on Twitter.

(FYI scholarship fraud report)
(FTC File No. P094803)

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