Saving for college and avoiding scams

KANSAS CITY, Mo. - For a child born today, financial planners estimate the cost for in-state college tuition in 18 years will be $150,000. 

Legitimate help is available, though. Missouri state treasurer Clint Zweifel came to Kansas City Wednesday to read to children at Crown Center and promote the state's MOST 529 college savings plan. 

The 529 plans continue to grow in popularity in states across the country due to tax deferred growth and tax exempt withdrawals for qualified higher-education expenses.

"MOST is an important tool in the tool box for those families in helping them save," Zweifel said. "You can make it an automatic event, you make it that much easier for your family."

Unfortunately, for parents and students trying to land scholarships, there are many ways to be scammed.  Companies out there promise to do all the work for you. The FTC on its website warns to be aware of the following red flags when applying for help:

  • "The scholarship is guaranteed or your money back."
  • "You can't get this information anywhere else."
  • "I just need your credit card or bank account number to hold this scholarship."
  • "We'll do all the work. You just pay a processing fee."
  • "The scholarship will cost some money."
  • "You've been selected" by a "national foundation" to receive a scholarship – or "You're a finalist" in a contest you never entered.

The federal agency says legitimate companies never guarantee or promise scholarships or grants.

Click here to learn how to win $529 for your 529 savings plan on Friday.

Print this article Back to Top

Comments