Students looking for money to fund their college education might fall prey to scholarship scams if they aren't careful, says a Purdue University financial aid expert.

As the pressure builds to lock in funding for the 2007-08 academic year, many students and their parents could be inviting targets for misleading offers for scholarship and grant programs, says Joyce Hall, director of the Division of Financial Aid at Purdue.

"Fees for private scholarship search services can range from $500 to more than $1,000," she says. "What many students and parents don't realize is that they often end up paying money for information they can get for free from a college financial aid office, state education agency, the Internet or the U.S. Department of Education. By simply filing the Free Application for Federal Student Aid, students will be considered for all federal and state-supported financial aid."

Students and parents should consider all free sources of financial aid - such as foundations, community organizations, employers, other organizations and free search services - before they pay any money for a search service, Hall says.

If students and parents do decide to work with a scholarship search service, she says they should watch out for red flags, including companies that ask for money up front, that say students are finalists in a contest, or request a credit card or bank account number to hold a scholarship.

"Often students and families who are the neediest are they ones who fall prey to these kinds of scams," Hall says. "Make sure to check the company's reputation with the Better Business Bureau or a school guidance counselor, ask about the company's refund policy and read all the fine print before committing to anything."

Many universities, including Purdue, require that students file the Free Application for Federal Student Aid by March 1 to be considered for federal, state and university-controlled financial aid. While students filing after that date may continue to receive federal grants and loans, Hall says state and institutional grant and scholarship funds are generally exhausted after awards are given to applicants who file by March 1.

Source: Purdue University