Crowley Calls for Investigation of Companies Allegedly Cheating American Families Seeking Student Financial Aid

Feb 4, 2011 Issues: Education

Washington, D.C. — Today, Congressman Joe Crowley (D-Queens, the Bronx) called on the Federal Trade Commission (FTC) to investigate allegations of companies misleading families of students seeking assistance in securing financial aid, following a new report by the Better Business Bureau (BBB).  

“Financial aid is supposed to be a boon for American families, not a boondoggle,” wrote Crowley in a letter to FTC Chairman Jon Liebowitz.

This week, the Better Business Bureau (BBB) reported that it has received “complaints from parents who paid money upfront to a company that promised to find scholarships and grants for their child but ultimately did not deliver.” In addition, the BBB has heard reports of companies misleading families to believe that they are providing a unique service, when in reality they are charging money for information that is already widely available at no cost or for services that produce no results.

“The idea that companies are trying to make a buck off of American families who are doing nothing more but trying to manage the high price tag of a college education is appalling,” said Crowley. “These are tough economic times, and misleading families into believing they should pay for information that is already available at no cost is the ultimate cheat.  With student financial aid deadlines on the horizon, I urge the FTC to take urgent action and investigate this matter thoroughly.”

In addition to calling on the FTC, Crowley also plans to introduce legislation next week to ensure families are made aware of these abusive practices.

The full text of the letter sent to FTC Chairman Liebowitz is below:

February 4, 2011

Jon Liebowitz
Chairman, Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580

Chairman Liebowitz,
 
I want to express my serious concern and request action relating to a recent Better Business Bureau report exposing activities by companies allegedly taking advantage of families searching for financial aid for higher education.
 
On February 1st, the Better Business Bureau (BBB) reported that multiple companies may be hurting families of students applying to colleges and universities through misleading practices.  The BBB states that it has received “complaints from parents who paid money upfront to a company that promised to find scholarships and grants for their child but ultimately didn’t deliver.”  Companies have also been reported as leading families to believe that they are providing a unique service, when in reality they are charging money for simple information that is actually available for free elsewhere. The BBB further outlines the practices such companies use to solicit business. 
 
This new report is deeply disturbing.  At a time when our nation faces unprecedented economic challenges, students must able to fairly and transparently access the funds they need to give them a chance at success.  Financial aid is supposed to be a boon for American families, not a boondoggle.
 
I urge you to closely examine the claims made by the Better Business Bureau and take urgent steps to protect families from any misleading practices in the student financial aid industry, including options available under the terms of the College Scholarship Fraud Prevention Act.  I plan on introducing further legislation to help ensure that families receive the information they need about what may amount to abusive practices. 
 
This situation is urgent, with many students set to file their financial aid forms in the coming weeks.  I look forward to your timely response.
 
 
Sincerely,

Joseph Crowley
Member of Congress

Congressman Crowley is the seven-term representative from the 7th Congressional District of New York, which includes sections of Queens and the Bronx. He serves a Chief Deputy Whip in the House of Representatives and is a member of the powerful Ways and Means Committee.