Lead Generators: The Danger of Scholarship Sites


By: Ali Chauldry, Staff Reporter

Have you ever wondered what happens to your personal information after you send it to a scholarship website? You may think that it is only used to pick a winner at random, but instead your information is often sold to marketing partners, such as colleges and textbook companies. This can result in your getting emails and calls from these random companies and colleges. The type of term given to these types of sales are “lead generators.”

The Federal Trade Commission has been trying to raise the public’s attention to the lead generators for some time. According to an article from the  Hechinger Report, FTC attorney Brian Shull says they haven’t taken any action on lead generators but warns students and families that they must have full understanding what exactly these scholarship companies are collecting and to whom they will probably end up selling the information.

Experts say that there is nothing inherently wrong with “lead generation” according to a TIME report. since it has been used for decades in various industries. An example of this is how the  U.S. Postal Service makes money when you file a change of address and that this steers moving companies to new customers. This is not the end, though; actually, lead generators have grown significantly larger thanks to the internet. One example of this is when you  search on the internet, some of the results are just sites that collect information on you to get a commission from someone selling a type of service.

While lead generators are currently making money off freely shared student information, it is better than the past scholarship information services that charged a fee and couldn’t guarantee if a student would get a scholarship at all.

Most scholarships are not based on merit or financial needs but rather a simple drawing. Scholarships can be useful, but Ed Mierzwinski, federal consumer program director for the U.S. Public Interest Research Group,  recommends students to talk to counselors or look for scholarships in libraries in an Hechinger Report article.

Meanwhile, Jill Desjean, a policy analyst with the National Association of Student Financial Aid Administrators, says that chambers of commerce, churches, civic organizations and parents’ employers  can help with  scholarships.

For more information: www.politico.com/story/2014/05/student-data-privacy-market-106692