Agencies push student-aid quest

Getting scholarships for college students has become a big business. And this sumer, with students beginning to think about college and tuition payments, the business is picking up.

Nowhere is this more apparent than at Scholarship Search, an organization that processes at least 25,000 applications from students who are hoping to top some of the 250,000 private scholarships worth $500 million stored in the company's data bank.

S. Robert Freede, president of Scholarship Search, says: "Business is booming. This is the prime time for juniors in high school who are becoming seniors to make a decision on where they are going to school. And both the kids and their parents are flabbergasted by the cost of college."

In fact, the cost of college education has been rising about in line with the inflation rate. This fall, costs at public four- year colleges will rise 8.5 percent, while increasing 10.6 percent at private colleges and universities. Mr. Freede says a college education in 1980, including room, board, and tuition, averaged about $4,000 at state schools, $6,000 at private schools, and $8,000 at prestige private schools.

Because of these escalating costs, parents -- even middle- class families -- are turning more and more to grants, scholarships, and other forms of financial aid.

According to some private estimates, about $4 billion in school loans and scholarships are given out each year. Major federal programs hand over $1.5 billion in grants, while private scholarships worth over $500 million are given out . States and colleges to a flat fee, depending on how much work is involved.

For example, Bill Serra, in Asbury Park, N.J., runs a company called College Athletic Placement Service. Mr. Serra says this year he placed about 700 clients in athletic scholarships ranging from field hockey for women and tennis for men and women to football for men. His clients are competing against some 5 million youngsters who play varsity high school sports and are looking for one of the 100,000 scholarships awarded for athletics every four years.

"We're thinking of going national with heavy computerization," he says, "because it's obvious there is a need for it." With the middle class deeply in debt, he continues, "and with their incomes too high to qualify for federal aid programs, they might be able to get some help if their kid is a fairly decent swimmer." Although most parents would like to get "the free ride," he says, only a few will end up with full scholarships.

The "free ride" can be worth a lot. At Boston University, for example a dull football scholarship is worth $8,200. BU gives out 50 to 60 of them, Mr. Serra says.

For women, the field is even larger, since colleges are under pressure to comply with federal laws regarding equality of scholarship dispersal. Thus, he has been successful at getting women scholarships in field hockey, tennis, fencing, and other sports.

In return for locating a scholarship, he gets 10 percent of the scholarship's value during the freshman year plus a $250 fee. For NCAA schools, he doesn't charge the 10 percent, since the NCAA has in effect declared him an "agent."

At Scholarship Search (Suite H627, 1775 Broadway, New York, NY 10019), the fee is a more modest $46.50, which includes a guarantee of a list of 25 scholarships the student can apply for although not necessarily receive. Scholarship Search sticks to private scholarships, such as those offered by religious, ethnic, fraternal, and union organizations.

Not only does the service provide a list, but also tells the student how to write a donor. "What we found," says Mary Ann Maxin, executive director of Scholarship Search, "was that students weren't following up. So we now send them a basic letter, showing them how to prepare a resume for the donor."

Not everyone waxes ethusiastic about the services. For example, Joe Case, director of program administration at the College Scholarship Service, a part of the College Board, a nonprofit organization, says he thinks "most of the time the student doing the investigation on his own and exploring the opportunities presented by guidance counselors will do as well as or better than relying on a search service, which is fairly expensive."

Mr. Case also says he views the scholarships offered by such services with some skepticism. "The College Board made a similar undertaking in trying to develop a data bank and found it unsatisfactory." Among the major problems was that about one-third of the sources had to be tracked down each year and updated for changes in their criteria or funding status. Currently, the College Board sells its own scholarship information services for prices ranging from $2.75 to

Mr. Case also criticizes the practices of Mr. Serra. "I think his practice of collecting a finder's fee is heinous, totally reprehensible," he states.

Mr. Case, in fact, asked the Department of Education to look into an advertisement which said that for $10, students could obtain information on how to apply for a Basic Grant from the government. The Education Department said the company was selling a government-produced booklet that students could obtain for free. A spokesman says the Education Department is investigating the possibility of pressing criminal charges, since the company had removed the front cover of the government document and replaced it with its own cover.

The Education Department says it finds nothing wrong with private enterprises , such as the Serra agency or Scholarship Search, providing a service. However, Stephen Blair, executive assistant to the deputy assistant secretary for student financial assistance, says he is wary about the claims of donors." Most of these , he comments, are for specific types of people, such as left-handed redheads.

The American Legion, notes Mr. Blair, puts together a comprehensive list of all scholarship aid available in a book, entittled "Need a Lift?" The 132 -directory sells for 50 cents.

If such a directory is available, why do people pay larger sums to organizations like Scholarship Search? Mr. Blair says, "I guess a lot of people will pay someone else to do their work for them."