College aid forms free; don't be fooled

AUSTIN (KXAN) - The cost of college keeps rising, and many students rely on financial aid to pay for their education.

Nearly $94 billion in grants and scholarships were available to students during the 2009-2010 school year. Parents and students have to apply for aid – and fill out the FAFSA , which is the Free Application for Federal Student Aid.

It’s free – says so in the name -- but some companies will charge a fee to help parents fill out the forms. Consumers have filed complaints, saying they were tricked into paying for something they did not know was free.

Shara Holt is learning first-hand about the high cost of higher education. Her son goes to Blinn College .

"His tuition is paid for, but the room and board, the food, the books, that's why we were trying to do this in the first place," Holt said.

The Holts decided to apply for financial aid. Her son picked up what he thought was the application form. But the forms were actually from College Financial Advisory , a California company that charges a fee to help them with the application process.

"The stipulation was if he's approved for financial aid then they will send the paper work, and if it's not we'll get the check back," she said. "Well, we never got the check back and we haven't heard anything."

Holt said her son has not received financial aid after nearly three months since applying, and the company still has her money.

"Anytime a service is telling you that you should pay to get the FAFSA filled out there should be a little bit of a pause in your mind," said Terry Martin, a financial aid advisor at the University of Texas .

Martin helps students and parents answer questions about applying for aid. He said the answers are there – for free.

“There are no secrets, if you fill out your FAFSA and respect all of the university deadlines, and state deadlines for filing your aid, you’re pretty much golden as far as it goes," he said.

"Us being first-time college parents, we didn't know we weren't supposed to send them any money," said Holt.

KXAN contacted the College Financial Advisory. The company said they had not received Holt’s complaint and sent a statement reading, in part:

" Most likely the student in question does not understand our process and has assumed the worst case scenario about our organization.

"Unfortunately, any organization that requires a fee in the financial aid circle is immediately categorized as a scam. This is not fair to our organization and we have to constantly educate and inform others about our legitimate and effective establishment."

Holt said that she did call the company, but has not received a response. Now she wants others to learn from her experience.

"No one requires money for financial aid. So that's just I want that to get that out there," Holt said.

The Better Business Bureau has received complaints about various companies that charge for financial aid forms. Lydia Hekman with the Austin BBB said consumers should watch out if a company promises that they’ll get you a big amount of aid.

"That isn’t something that a company can guarantee for you," Hekman said. "They’re going to have to look at your specific financial situation before giving you an estimate and even an estimate is not something you can guarantee, so that’s really a big red flag."

There is some free help available for parents and students:

• The BBB will be part of a community forum on college financial aid on Thursday night. It’s happening from 6:30 to 8:30 at the Reagan High School theatre.
• Saturday, the Austin Chamber of Commerce will host the latest in its series of Financial Aid Saturdays – this weekend, there are events at Akins, Connally, Stony Point, Reagan, and Georgetown High Schools.  There will be additional events at other schools in the area on March 5 and March 26.