There's a timely update posted at the website of the Federal Trade Commission (www.ftc.gov) warning consumers about scholarship and financial aid scams targeting high school seniors and their parents. As high school graduation gets closer, students and their parents shift into high gear as they search for the money to cover the high cost of college tuition and housing. Confronted by the skyrocketing costs, they often become easy prey for scholarship scammers.

Everybody needs money for college and it's precisely this need that some less than scrupulous companies are exploiting. Companies like these often look for victims at free seminars, where smooth-talking pitchmen promise a guaranteed scholarship in exchange for an upfront fee. The FTC says the offers frequently come with a seemingly reassuring money-back guarantee, which in fact has so many strings attached that a refund is virtually impossible. Other scammers speak of "scholarship awards" requiring a fee or even checking account access in order to confirm a student's "eligibility".

No matter how smooth the con job, students and parents can look for a few common warning signs that signal a phony scholarship offer. Any mention of a guarantee, for example, should raise a red flag immediately. Any scholarship offer or "award" that requires students or parents to surrender money, or even their credit card or banking information, is almost certainly fraudulent.

The FTC does acknowledge the existence of legitimate companies that match students with real scholarship opportunities for a fee, but here, too, consumers should take care to ask the right questions. View exorbitant claims of success with the skepticism they deserve. Ask companies that make such claims for the names and addresses of people in your own neighborhood that can provide references about the quality of service and the results achieved. Last but not least, get any fee-for-service agreement in black and white.

Confronted with the challenge of funding an expensive college education, students and their parents sometimes can't see the forest for the trees and overlook the country's biggest source of student financial aid: Uncle Sam himself! Each year, the Department of Education distributes some 80 billion dollars in Federal student aid as grants, work-study programs and loans. The opportunities here aren't too good to be true, they're simply too good to be overlooked - and are guaranteed scam-free. Check out studentaid.ed.gov, the home of Federal Student Aid on the Web, for more free information!