Education Department Cracks Down on Misleading Financial Aid Web Sites

Flint, Mich.
Financial aid officers nationwide are in an uproar over an Internet Web site that they say has confused and misled many families, and charges money for a service that students can easily get for free.
All students who apply for federal financial aid must fill out a form called the FAFSA, or Free Application for Federal Student Aid. If they visit the federal government's site <www.FAFSA.ed.gov>, they can complete forms for free. But many families are ending up at <www.FAFSA.com>, a for-profit company that charges for handling basic forms — $79 for first-time applicants and $49.99 for repeat customers.
The U.S. Department of Education takes issue with that Web site and says it is purposely using the "FAFSA" name to dupe unsuspecting financial aid applicants.
Education department attorneys sent a cease- and-desist letter in January to the proprietor of the www.FAFSA.com because its Web address is nearly identical to the free government site.
The letter requests that proprietor Michael Alexander of El Macero, Calif., shut down the site and transfer ownership of the FAFSA.com name to the education department's Office of Student Financial Assistance.
We "believe that the use of FAFSA.com domain name is calculated to, and does in fact deceive consumers," the letter states. Furthermore, the name "may violate federal law concerning the use of names to indicate U.S. government affiliation."
Alexander, a former director of financial aid at the University of Colorado, could not be reached for comment. A California telephone number assigned to his name was unlisted. Calls to telephone numbers listed on the Web site were not immediately returned.
According to the education department, more than two million college applicants used the government's FAFSA Web site to apply for financial aid last year, and next year that number is expected to increase to three million. If for-profit Web sites with similar names are able to attract just a fraction of the users looking for the free government site and convince families to pay, it could prove to be quite lucrative.
"We've been using the FAFSA acronym since 1973," says Karen Freeman, an education department spokeswoman. Companies are "trying to capitalize on our name."